Understanding Construction Liens

In large, complex construction projects, like wind farms, delayed payments or temporary disputes can sometimes arise. Liens are a tool that contractors and their subcontractors often use to ensure that there is a strong incentive to solve these issues.  In order to ensure that any liens filed during an Apex construction project are promptly removed, Apex requires that its contractors provide a bond upon the occurrence of any such dispute, so that the money is available in place of the property against which any lien is filed. In nearly all states, the placement of such a bond automatically removes any liens from property against which they were filed in that dispute. This is the case in North Dakota.

Unfortunately, at the time Apex’s Hoopeston Wind project was being constructed in Illinois, state law did not automatically remove liens from property upon placement of a bond. During the construction of Hoopeston Wind, several construction subcontractors filed liens against the project contractor, who was hired by Apex, relating to compensation disputes on the project. Because of the unique law existing in Illinois at the time, these liens were not immediately removed from property even though bonds were posted, and there was a period of time when the liens filed on this project’s properties remained in place. In this special case, Apex worked with its subcontractors to encourage swift resolution of their disputes and get all liens removed. Apex also worked closely with our landowners to mitigate any potential negative effects resulting from these liens.

It is important to note that in North Dakota the placement of a bond does force the immediate removal of any outstanding, related lien of record and provides full security for the underlying claim. It is also important to note that even in Illinois, the law that allowed liens to remain in place has been amended, and the state now operates in a manner consistent with other states.

If you have any questions related to liens, Hoopeston Wind, or Apex, please do not hesitate to contact us.