In 2016, bad things happened to the lien rights of subcontractors and suppliers in Missouri because of a bad court decision. Then in 2019, American Subcontractors Association (ASA) and its industry partners made good things happen in the legislature with the passage of a favorable law to overcome the bad court decision. The problem started when the Supreme Court of Missouri unexpectedly ruled that a subcontractor had neither a bond claim nor a mechanic’s lien claim against the real estate owned by a county but leased by it to a private entity to be used by that entity as its corporate headquarters.
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The Illinois Supreme Court rendered a very important decision on December 28th impacting the real estate and construction industry. In Sienna Court v. Champion Aluminum, the Court determined that the purchaser of a newly constructed home may NOT assert a claim for breach of an implied warranty of habitability against a subcontractor who took part in the construction of the home, where the subcontractor had no contractual relationship with the purchaser.
An Illinois appellate court has held that buyers of residential property may maintain an action against subcontractors who provided labor in the construction of their home, if there is a defect in their home that makes it not suitable for its intended purpose as a residence. Sienna Court Condominium Ass'n v. Roszak/ADC, LLC, No. 122022, 1st Dist. This court found that homeowners may bring an action against the subcontractors, if the general contractor is insolvent, even if the GC maintained a warranty fund.
Subcontractors are accustomed to believing their payments are secured by either a mechanic’s lien or a payment bond, sometimes both. For example, when the public utility, AmerenUE, convinced the Missouri Court of Appeals that due to its quasi-governmental status, it should be immune from mechanic’s liens, the court went on to say that AmerenUE would be required to have its prime contractors post payment bonds for the protection of subcontractors.
Beginning with the Little Leagues, everyone knows about “home field advantage”, where friendly fans abound, the field is familiar, and grueling travel is absent. While certainly no guarantee of victory, these are intangible factors leading to the best opportunity to win.