Illinois Gov. Bruce Rauner signed HB-2635 into law on July 29, 2015. The law adds Section 38.1 to the Mechanics Lien Act, allowing a lien bond to be substituted for real property subject to a lien claim. Illinois is the last state to add these provisions for contractors and subcontractors to their construction laws. The new law goes into effect on January 1, 2016.
Project owners must submit a petition to substitute the surety bond in place of property within 5 months after a mechanics lien claim is filed. The bond must be equal to 175% of the value of the lien. If the lien claimant does not submit an objection to the petition and the court has determined the bond is eligible, the surety bond will be substituted for property.
The Insider covered the proposal on the blog in July before it was signed into law. Check out the previous post for more details on Section 38.1, including the bond provisions and petition requirements.