If you provide labor or materials for a home construction project, you are entitled to claim a lien against the property if you don’t get paid. A lien is a public record of payment you are owed. Under Michigan lien law, any contractor, subcontractor, supplier or laborer who works on a project is allowed to claim a lien. However, it must be done within 90 days after you last provided labor or materials on the project.
Michigan Property Lien Form
The Michigan Construction Lien Act provides the form to record a claim of lien. You must include the names of interested parties as well as a description of the labor or materials provided and the payment amount due and owed. The claim form must be filed in the register of deeds office in the county in which the property is located. You must also attach a Proof of service of a Notice of Furnishing to a lien claim if you are a subcontractor, supplier or laborer.
A Notice of Furnishing is a preliminary notice, securing a party's rights to a claim of lien. A Notice of Furnishing must be served either by personal delivery or certified mail within 20 days after first supplying labor or material. If you don't file a Notice of Furnishing within that time frame you still have a right to a claim of lien, but you may not be able to pursue payment for any work carried out before filing.
If requested, you must also provide the property owner (following a request in writing) with a statement of the amount of labor and material supplied up to the date of the statement, any amount remaining due and details of any contractual work still to be done.
Under the Michigan Construction Lien Act, a construction lien may not exceed the amount of your contract, less any payments already made.
Read More: How to File a Property Lien
Michigan Notice of Commencement
Under Michigan law, a property owner is required to record a Notice of Commencement in the office of the register of deeds before any actual work starts on the property. This must be displayed in a conspicuous place on the property, with a blank Notice of Furnishing attached, and any party with an interest in the property may ask for a copy of the Notice. If the property owner fails to record the Notice, any eligible lien claimants have an extended period of time to file a Notice of Furnishing. The owner of a residential property undergoing improvements only has to supply a Notice of Commencement in Michigan if a contractor, subcontractor, supplier or laborer requests it in writing.
Filing of Sworn Statement
Michigan law requires a contractor, upon completion of work on a property, to provide the property owner with a sworn statement detailing the parties who worked on the project and the amounts they are owed. After receiving the sworn statement, the property owner may withhold enough funds to pay all subcontractors, suppliers or laborers. No contractor is entitled to a payment or to file a claim of lien until the sworn statement is filed.
- The lien cannot contain wholly speculative amounts of money (request for compensation outside the realm of the original contract). If this is done, the lien will be considered invalid and unenforceable.
Claire is a qualified lawyer and specialized in family law before becoming a full-time writer. She has written for many digital publications, including The Washington Post, Forbes, Vice and HealthCentral.