If contractors and suppliers aren’t paid on a construction project in Michigan, they can file a mechanics lien to secure payment. A mechanics lien gives the unpaid party a legal security interest in the property. Working with Michigan construction attorneys is crucial to navigating the lien process successfully and protecting your right to be paid.
At CRM Lien Services, we specialize in ensuring you get paid quickly and reliably. We can prepare and file mechanics liens for you, taking into account Michigan Mechanics Lien and state-specific rules and regulations.
This page details the rules, requirements, and deadlines for filing a Michigan mechanics lien.
Key Takeaways
- Contractors, subcontractors, suppliers, and laborers who improve real property in Michigan have strong lien rights. This includes subcontractors at any tier and design professionals like architects and engineers. However, suppliers to suppliers do not have lien rights.
- Only licensed contractors and subcontractors have lien rights for residential projects. They must be licensed as a “residential builder” or “residential maintenance and alteration contractor.” Unlicensed contractors cannot file a valid lien and may face legal consequences.
- In Michigan, the deadline to file a mechanics lien is 90 days after the last date of furnishing labor or materials to the project. Warranty work does not extend this deadline, making it crucial to file on time to protect lien rights.
- Serving pre-lien notices, such as the Notice of Furnishing and the Sworn Statement, is essential to protecting lien rights. Failing to serve these notices can limit the amount of money that can be recovered through a mechanic’s lien and may prevent enforcement of the lien.
Who Can File a Michigan Mechanics Lien?
In Michigan, contractors, subcontractors, suppliers, laborers, and other lien claimants who improve real property are allowed to file a mechanics lien. There is no tier limit for subcontractors, and suppliers to any tier of subcontractor also have mechanics lien protection.
Note: For residential projects, a general contractor can only file a lien if there is a written contract with the property owner.
In 2018, Michigan expanded lien rights to include design professionals, such as architects, engineers, and professional surveyors.
However, suppliers to suppliers are not permitted to claim a mechanics lien in Michigan.
Can an Unlicensed Contractor File a Michigan Mechanics Lien?
For commercial projects in Michigan, a contractor’s license is not required to file a mechanics lien.
However, for residential projects, only licensed contractors and subcontractors have lien rights. Specifically, contractors or subcontractors (excluding plumbing, electrical, and mechanical subs) must be licensed as a “residential builder” or “residential maintenance and alteration contractor.”
If a lien claimant is unlicensed or their license has lapsed, the lien will not be valid. Additionally, the claimant may be liable to the property owner for damages and could be guilty of a misdemeanor or felony.
Both the entity and the individual entering into the contract must be licensed.
When Is the Deadline to File a Michigan Mechanics Lien?
The deadline to file a mechanics lien Michigan is within 90 days after the claimant last provided labor and materials to the project. Additionally, Michigan courts have ruled that warranty work will not extend this filing deadline.
What Information Should Be Included in a Michigan Mechanics Lien?
A Michigan Claim of Lien must follow the form outlined in M.C.L. §570.1111 and include the following information. It is crucial to use the correct Michigan mechanics lien form to ensure all necessary details are accurately recorded:
- Claimant’s name and address
- Legal property description
- Owner or lessor’s name
- Last date of furnishing labor and materials
- Total contract amount
- Amount of payment received
- Lien amount
- Proof of service of Notice of Furnishing (if required) attached
- For wage laborer claims: hourly rate and amount due
Can I File a Michigan Mechanics Lien on a Condominium Project?
Yes, a mechanics lien can be filed against a condominium project, provided the claimant has valid mechanics lien rights.
However, the following limitations apply:
- A construction lien for an improvement to a condominium unit or a limited common element will only attach to the specific unit where the improvements were made.
- A construction lien for an improvement authorized by the developer and performed on the common elements will only attach to condominium units owned by the developer at the time the lien is recorded.
- A construction lien for an improvement authorized by the association of co-owners will attach to each unit only to the proportional extent that each co-owner is required to contribute to the expenses.
- A construction lien will not attach to a condominium unit for work performed on the common elements if the work was not contracted by the developer or the association of co-owners.
Who Cancels the Michigan Mechanics Lien When I Get Paid?
Michigan law states that when a claim of lien has been fully paid, the lien claimant must provide a certificate to the owner, lessee, or payer. This certificate witnessed and acknowledged similarly to a mortgage discharge, confirms that the claim has been paid and is now discharged.
If a foreclosure action to enforce the construction lien is pending, the lien claimant must also, upon request, provide the necessary documents to discontinue or dismiss the action and discharge any notice of lis pendens associated with it.
Why Send a Notice of Furnishing?
To protect your right to file a mechanics lien, sending a preliminary notice is essential. In Michigan, this notice is called a Notice of Furnishing. Without sending this notice, you cannot file a claim of lien.
Who Must Send Preliminary Notice in Michigan and to Whom?
According to the Michigan Construction Lien Act, general contractors must provide a list of all subcontractors and suppliers upon request. Any party without a direct contract with the property owner (or the owner’s agent) must provide a Notice of Furnishing. For residential construction projects, a Sworn Statement must be given to the owner by the general contractor and to the general contractor by subcontractors before final payment or progress payments are made.
What Should Be Included in the Michigan Notice of Furnishing?
Michigan offers a preferred preliminary notice form.
In your NOF, you’ll need to include the following information:
- Name of the designee from the notice of commencement
- Address from the notice of commencement
- Name and address of the other contracting party
- Name of the county
- Description of the type of work
- Name and address of the lien claimant (you)
- Name and address of the party signing for the lien claimant
- Address of the party signing
5 Essential Things to Know About Michigan Mechanics Liens
1. Strong Lien Rights for Contractors & Suppliers Contractors and suppliers have strong lien rights in Michigan. If unpaid on a Michigan job, they can file a lien to expedite payment and protect themselves. However, specific requirements and rules must be followed.
2. Subcontractors of Any Tier Have Mechanics Lien Rights. On commercial projects, general contractors, subcontractors (of any tier), material suppliers, and laborers can file a mechanics lien if they contribute to property improvement. Material suppliers to other material suppliers do not have mechanics lien rights. On residential projects, only licensed contractors and subcontractors have lien rights if they are licensed as a “residential builder” or “residential maintenance and alteration contractor.” Plumbing, electrical, and mechanical subcontractors are excluded from this licensing requirement. For residential projects with 2 or fewer units, a general contractor only has lien rights if there is a written contract with the property owner.
3. Fixed 90-Day Deadline to File a Michigan Mechanics Lien. The deadline to file a mechanics lien in Michigan is 90 days after the last date of furnishing labor or materials to the project.
4. Notice of Furnishing or Sworn Statement Requirements. Participants without direct contact with the property owner (or the owner’s agent) must deliver a Notice of Furnishing within 20 days of first furnishing labor or materials. General contractors on residential projects must deliver a Sworn Statement to the property owner, and subcontractors must deliver it to the general contractor. The Sworn Statement lists all subcontractors, material suppliers, and laborers contracted with, along with the amounts unpaid.
5. Licensing Requirements for Contract Participants. Ensure you are licensed as a “residential builder” or “residential maintenance and alteration contractor” on residential projects if required. If unlicensed or with an expired license, the lien will be invalid, and you may be liable to the property owner for damages and potentially guilty of a misdemeanor or felony. Both the individual and the contracting entity must be licensed.
6. Legal Property Description Required in Claim of Lien Unlike many states that allow a general property description, Michigan requires the Claim of Lien to include the legal property description.
How to File a Mechanics Lien in Michigan?
If you’re having trouble collecting payment for work or materials provided on a construction job in Michigan, filing a mechanics lien can help. A mechanics lien is a powerful tool to ensure construction businesses get paid for their work.
This guide provides a comprehensive explanation of how to file a Michigan mechanics lien. Follow these steps carefully to get your claim filed correctly and secure your payment. Be cautious: mistakes can invalidate the entire document, leaving you unprotected.
Do You Have the Right to File a Lien in Michigan?
Michigan’s mechanics lien laws allow almost everyone on a project to file a lien to protect their payment, with a few exceptions. Certain steps must be taken to retain the ability to file a lien and ensure it is valid.
Before filing an enforceable mechanics lien, ensure you’ve met the state’s preliminary notice requirements. While parties with direct contracts with the property owner do not need to send specific notice before filing a lien, all other project participants must send a Notice of Furnishing to the property owner (or its designee) to retain lien rights.
Subcontractors and material suppliers must send a Notice of Furnishing within 20 days of first furnishing labor or materials. Laborers have 30 days to send the notice. Failure to give timely notice may reduce the lien amount or invalidate the lien.
4 Steps to File a Michigan Mechanics Lien
Once the preliminary notice requirement is met, you can file your lien.
Here’s how:
Step 1: Prepare Your Mechanics Lien Form. Ensure you use the correct mechanic’s lien form. It must contain the right information and be properly formatted. Incorrect forms can invalidate your lien claim.
Step 2: Fill Out the Lien Form. Your Michigan mechanics lien must include:
- Your name & address: Identify yourself correctly using your legal name.
- Legal description of the property: Include the legal property description, which can be found in the Notice of Commencement.
- Name of the property owner or lessee: Identify the property owner correctly, using information from the Notice of Commencement.
- Dates of furnishing: State the first and last dates you provided labor or materials.
- Contract amount or hourly rate: Provide the total contract amount, including extras or hourly rate for laborers.
- Lien amount: State the amount owed, excluding attorney fees, interest, or other amounts.
- Sign the lien and have it notarized: The lien must be signed by the claimant, the claimant’s attorney, or an agent and notarized.
Step 3: Record Your Lien Claim: File your completed lien document in the appropriate county recording office within 90 days of the last date of furnishing labor or materials. Filing can be done electronically, in person, or by mail. Ensure you meet the deadline and include the correct filing fees.
Step 4: Serve a Copy of Your Lien: Within 15 days of recording, serve a copy of the lien on the property owner’s designee or the owner if no designee is named. Service can be done personally or by certified mail.
After Filing a Construction Lien in Michigan
Your mechanics lien must be enforced within one year from the filing date. If you haven’t been paid and the deadline is approaching, you may need to file a lawsuit to enforce the lien. If you’ve been paid, you will need to release the lien.
- Enforce your lien: Filing a lawsuit to foreclose on the property ensures the lien remains effective during the legal process.
- Release (or cancel) the lien: If the claim is paid or invalid, file a lien release in the same office where the lien was recorded.
By following these steps, you can protect your payment rights on construction projects in Michigan.
Get in Touch
Filing a mechanics lien in Michigan is a powerful way for contractors, subcontractors, suppliers, and laborers to secure payment for their work on a construction project. This legal tool provides a security interest in the property, ensuring that unpaid parties have the means to collect what they are owed.
To file a mechanics lien in Michigan, it is essential to understand and follow the specific rules, requirements, and deadlines. These include sending a Notice of Furnishing, ensuring proper licensing, and meeting the 90-day filing deadline. Additionally, accurate and complete information must be included in the lien form to avoid any potential invalidation.
At CRM Lien Services, we have been serving customers across the country with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.
We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.
We would love to work with you and help you lower your risk and get paid fast!
