Michigan State Lien Law Summary

Contractor, sub, supplier, or laborer. There is no apparent limit to the tier of subcontractor that may claim a lien, thus a supplier to any tier of sub may ap­parently claim a lien. A supplier to a supplier may NOT claim a lien. It is unclear whether employee benefit trust funds have lien rights. An unpublished opinion that was subsequently vacated said that they do not. The statute provides, however, that a laborer can recover unpaid fringe benefits or items contractually withheld from wages but not paid. Only LICENSED contractors and subcontractors can bring an action to collect on an unpaid contract, or record liens on residential property, and contractors and subs (except plumbing, electrical and mechanical subs) are required to be licensed as a residential builder or a residential maintenance and alteration contractor. NOTE that where a contractor’s or sub’s license lapses or is suspended or revoked, the contractor or sub is considered unlicensed or unregistered. If they are unlicensed, they will be liable to the owner for all actual damages, costs, and attorney’s fees resulting from the wrongly filed lien, and may be guilty of a misdemeanor or felony. On residential struc­tures of two units or less, a contractor is only entitled to a lien if the contract and any amendments to it are in writing, and the contractor has provided the required notices (Please contact Levy von Beck & Associates for more information.). (A supplier is not required to have a written contract in order to assert a lien claim, however.) Note that where a residence is built with the intention of renting it or selling it rather than the owner actually living in it, it may be considered a commercial project. [570­.1106, 570.1109, 570.­1114, 339.601, 339.2412; 84 Lumber Co., L.P. v. Pagel & Frey, L.L.C., Not Reported in N.W.2d, 2007 WL 1228629 (Mich.App., 2007); Trustees of Detroit Carpenters’ Health & Welfare Fund v. Unified Carpentry Constrs., Inc., 1999 U.S. Dist. LEXIS 14453 (E.D. Mich. unpublished opinion), vacated at 2000 WL 33968886; Southeastern Tile LLC v. Pierce, Not Reported in N.W.2d, 2011 WL 1565458 (Mich.App.2011)] The court of appeals has held that the contracting owner’s or lessee’s intent to reside in a structure is a prerequisite to determining that a structure is residential under the Construction Lien Act, even where the structure is a single-family dwelling. Karaus v. Bank of New York Mellon, Not Reported in N.W.2d, 300 Mich.App. 9, 2012 WL 6633984 (Mich.App.,2012) citing Titanus Cement Wall Co., Inc. v. Watson, 405 NW2d 132 (1987)]

Subs and material suppliers to contractor or first-tier sub, or laborer. [129.201, 129.206]

A case has allowed pension funds to a claim unpaid benefits against a payment bond, and the claims were not preempted by ERISA. Note, though, that a subsequent unpublished opinion has held that the ERISA does preempt construction lien claims on private projects. [Trustees for Michigan Laborers’ Health Care Fund v. Warranty Builders, Inc., 921 F.Supp. 471 (E.D. Mich. 1996); Schor at §23.02[D]]

ALL PROJECTS OTHER THAN CONDOMINIUMS:

Interest of owner or lessee contracting for work. Lien limited to claimant’s contract amount less payments made on contract, unless the claimant has timely given a Notice of Furnishing. If contracting party had no le­gal inter­est in the prop­erty, then lien is against improvement it­self. [570.1107; Steelcon, Inc. v. Bennett & Wright Group, Inc., 257 F.Supp.2d 895 (E.D.Mich.2003)]

A subcontractor, but NOT a supplier, may obtain lien against the contract funds. To do so, the subcontractor must provide separate form, a Sworn Statement (Please contact Levy von Beck and Associates for form information). Apparently this form alone will not cause the owner to withhold funds, unless contractor demands the owner do so, in writing. In any event, this sworn statement must be served before a subcontractor can file suit. If the owner or lessor does withhold the funds, and elects to pay the subs, etc. directly, before doing so the owner/lessor must give the general contractor 5 business days’ notice. [570.1110, 570.1117]

CONDOMINIUM PROJECTS:

(1) If construction is done to a single unit or a limited common area, than a lien only attaches to the condominium unit to which the improvement was furnished.

(2) If the project was authorized by the developer and performed on common areas, the lien will only attach to the condominium units owned by the developer at the time the lien is RECORDED.

(3) If the improvement is authorized by the co-owners association, then it attaches to each unit only in the proportion that the co-owner is required to contribute to the expenses of administration, according to the condominium documents.

(4) A lien will not attach to a condominium unit for work performed on the common areas, if the work was not contracted for by the developer or by the association of the co-owners of the condominium units. [570.1126; 559.232]

Payment bond of the general contractor. [129.201]

NOTICE OF FURNISHING:

Sub, supplier or laborer; anyone not contracting directly with owner.   NOTE that when the Notice of Furnishing is not timely given, then the claimant’s lien is limited to the amount the owner owes to the general contractor for the claimant’s work as of the time the Notice of Furnishing is given. Thus if the owner has not yet paid the contractor for the claimant’s work performed prior to receiving the (late) Notice of Furnishing, then the claimant can recover those funds as well. If the Notice of Furnishing is timely given, then the claimant has a full price lien, even if the owner has paid the contractor in reliance on a sworn statement and lien waivers. [570.1109; Steelcon, Inc. v. Bennett & Wright Group, Inc., 257 F.Supp.2d 895 (E.D.Mich.2003)] A claimant CANNOT rely on the contractor’s listing the claimant on its sworn statement – the claimant should ALWAYS give its own Notice of Furnishing. [MPC Cashway Lumber Co. v. Hull, 238 Mich. App. 441, 606 N.W.2d 392 (1999)] NOTE that where the owner has specifically met the subcontractor, and the subcontractor orally provides all the information the Notice of Furnishing would include, the subcontractor may be excused from giving the preliminary notice and from attaching proof of service of the notice to the lien, HOWEVER this practice is NOT recommended. [Thompson-McCully Co. v. Storage Oasis, L.L.C., Not Reported in NW2d, 2006 WL 335688 (Mich.App. Feb 14, 2006)]

SWORN STATEMENT:

Contractor or subcontractor. NOTE that suppliers and laborers are not required to give this notice. [570.1110; Schor at §23.03[C]]

WRITTEN CONTRACT:

NOTE that a general contractor on a residential structure, in order to protect its lien rights, must have a written contract with the owner, and that contract must contain specific information Please contact Levy von Beck and Associates for form information. [570.1114]

All claimants who don’t have a contract with the general contractor. [129.207]

Note that case law has held that where the provisions of the bond itself provide for less stringent notice provisions than the statute, the court MAY allow the claim to stand where the claimant complies with the bond requirements but not the statutory requirements. Recommend following the statutory requirements anyway. [Trustees for Michigan Laborers’ Health Care Fund v. Warranty Builders, Inc., 921 F.Supp. 471 (E.D. Mich. 1996)]

(No preliminary notice is required on highway projects.)

NOTICE OF FURNISHING:

To the person designated by the owner in the Notice of Commencement, and to the general contractor. If there is no designee, than to the owner or lessee set out in the Notice of Commencement. [570.1109]

SWORN STATEMENT:

General contractor gives it to owner or lessee; subcontractor gives it to general contractor. Subcontractor will be required to give it to the owner or lessee if either one demands it. NOTE that, on a project involving an improvement to a residential structure, once the owner, lessee or designee has received the Sworn Statement, they must notify all subs, suppliers and laborers who have provided a Notice of Furnishing that they have received the Sworn Statement. The notification must be either in writing, by telephone or in person. If the Notice of Furnishing is excused, then the owner, lessee or designee must so notify each sub, supplier and laborer named in the Sworn Statement. If a sub, supplier or laborer who provided a Notice of Furnishing or who is named in the Sworn Statement requests it, the owner, lessee or designee must provide a copy of the Sworn Statement within ten business days after receiving the request. [570.1110; Schor at §23.03[C]]

WRITTEN CONTRACT:

To owner. [570.1114]

General contractor. [129.207]

NOTICE OF FURNISHING:

Before or within 20 days after first furnishing mater­ials, or for laborer, within 30 days after wages were due. If service is made by certified mail, then service is complete upon mailing. The sooner it is sent or delivered the better, however, because if the notice is given later, it will cov­er materials sup­plied af­ter the notice is giv­en, but it will only cover materials sup­plied earlier if the owner has not yet paid the contractor for those mate­rials based on the contractor’s sworn sta­tement, or lien waivers. Also, if No­tice of Com­me­nce­ment is not re­cord­ed or provided upon written re­quest, then with­in 20 days after notice is ac­tually recorded or pro­vided. For laborers, failing to timely give this notice defeats the claimant’s claim. [570.­110­8, 570.­1109 570.1110; Schor at §23.03[C]]

SWORN STATEMENT:

Whenever payment is due from owner, lessee or contractor; whenever seeking payment from owner, lessee or contractor; or whenever requested by owner, lessee or general contractor. In any event, it must be given before filing suit. It is effective upon receipt. [570.1110]

WRITTEN CONTRACT:

It must be in the written contract between the owner and the contractor, thus presumably it must be received at the outset of the project. [570.1114]

Notice must be sent by certified mail within 30 days after first furnishing labor or materi­als. Proof of mailing is required; proof of receipt is not. [129.207; Wyandotte Elec. Supply v. Electrical Technology Systems, Inc., Not Reported in N.W.2d, 2014 WL 3529430 (Mich.App. 2014); Schor at §23.02[D]]

NOTICE OF FURNISHING:

Please contact Levy von Beck and Associates for form information. [­570.1109] NOTE ALSO that you need proof of service of the Notice of Furnishing to attach to your lien. [570.­1111]

SWORN STATEMENT:

Please contact Levy von Beck and Associates for form information.   The statute states that the contractor or subcontractor gives the sworn statement. (This is different from the statute pertaining to the claim of lien, which explicitly allows the claimant’s agent or attorney to sign it.) Apparently no one other than the claimant is allowed to sign it. In addition, based on the language and the required contents of the sworn statement, the claimant, not a representative, should sign it. NOTE that if the statement otherwise conforms to the statutory requirements, but is not notarized, it MAY be honored, but this is STRONGLY discouraged. While one case has allowed it, another has held that the failure to timely provide a sworn statement will invalidate the claim. [570.1110; Big L Corp. v. Courtland Const. Co., 750 N.W.2d 628, (Mich.App.,2008), 757 N.W.2d 852 (Mich. 2008); Apache Carpet & Floor Covering, L.L.C. v. Banah Corp., Not Reported in N.W.2d, 2013 WL 1748587 (Mich.App. 2013)]

WRITTEN CONTRACT:

Please contact Levy von Beck and Associates for form information. [570.1114]

-Nature of the labor or ma­terials furnished or to be furnished

-Name of the person to whom labor or materials were furnished

-Identity of the jobsite.

Neither the statute nor the case law discuss who should sign the form, thus recommend having claimant sign it. [129.207]

NOTICE OF FURNISHING:

Personally or by certified mail. If done by certified mail, service is complete upon mailing. [570.1109]

SWORN STATEMENT:

No specific method. It is best to ensure delivery. [570.1110]

WRITTEN CONTRACT:

It must be included in the written contract. [570.1114]

Certified mail, though actual delivery may be proved instead. Recommend ensuring actual delivery, though a court has determined that mailing is sufficient. [129.207; Wyandotte Elec. Supply v. Electrical Technology Systems, Inc., Not Reported in N.W.2d, 2014 WL 3529430 (Mich.App. 2014)]

An interim notice is not required.

An interim notice is not required.

All claimants. [570.1111]

All claimants who don’t have a contractual relation­ship with the general con­tractor. [129.207] Note that case law has held that where the provisions of the bond itself provide for less stringent notice provisions than the statute, the court MAY allow the claim to stand where the claimant complies with the bond requirements but not the statutory requirements. Recommend following the statutory requirements anyway. [Trustees for Michigan Laborers’ Health Care Fund v. Warranty Builders, Inc., 921 F.Supp. 471 (E.D. Mich. 1996)]

(On highway projects: All subcontractors and suppliers must give notice. [570.102; Schor at §23.02[D]])

Register of Deeds and desi­gnee (or owner or lessor, if no designee named). [570.1111]

General contractor and the governmental unit involved. [129.­207]

(On highway projects: In duplicate, to the board of officers or agents contracting on behalf of the public body. [570.102; Schor at §23.02[D]])

TO REGISTER OF DEEDS:

Recorded with­in 90 days after claimant last fur­nishes labor or material under contract. (Note that apparently where there are several contracts comprising a single project, the 90-day deadline begins tolling when the project, not each individual contract, is completed. It may be wisest to play it safe, however, and give notice within 90 days of each project, however, until stronger precedent is set. [First Community Bank v. Mountainaire, L.L.C, Not Reported in N.W.2d, 2010 WL 4137525 (Mich.App. 2010)]

TO DESIGNEE:

Personally served or mailed within 15 days after recording. [570.1111]

NOTE that where the project involves several units (e.g., of a condominium) and the customer identifies the purchases to the different units, the deadlines for filing liens are based on the last date of furnishing materials, etc. to EACH individual unit. If, however, at the time the claimant’s lien arose, the contractor was not working on a condominium unit and the owner had not yet recorded the master deed designating the project as a condo project, the contractor will not be subject to the ‘individual lien filing deadlines for each unit’ requirement. [Stock Building Supply, L.L.C. v. Department of Energy, Not Reported in N.W.2d, 2011 WL 1816510 (Mich.App. 2011)] NOTE that warranty work will not extend the deadline for filing the lien. [Stock Bldg. Supply, L.L.C. v. Parsley Homes of Mazuchet Harbor, L.L.C., 804 N.W.2d 898 (Mich.App. 2011); C.D. Barnes Associates, Inc. v. Star Heaven, LLC, (Mich.App.2013)]

It must be received within 90 days after claimant last furnishes labor or mater­ials. [129.­207]

(On highway projects: Received within 60 days after last performance or delivery. [570.102; Schor at §23.02[D]])

-Recorded in office of Reg­ister of Deeds

-Personal service or cer­tified mail return receipt requested. If served by certified mail, service is complete upon mailing. [570.1111]

Certified mail, though actual delivery may be proved instead. The consequences of refusal of delivery of notice are not clear, thus recommend ensuring actual delivery. [129.­207; 570.102]

Please contact Levy von Beck and Associates for further information.  Also at­tach proof of service of notice of fur­nishing. Also, make a proof of service of claim of lien as well, as it will be needed when filing suit. Per statutory form, claimant or claimant’s agent or attorney can sign the lien claim. NOTE that lien amount is ultimately limited to the amount of the claimant’s contract, less payments made on that contract. [570.­1111]

NOTE that the lien amount will be limited where the Notice of Furnishing is not timely given. In that case, the subcontractor or supplier claimant’s lien is ultimately limited to the amount the owner owes to the general contractor for the claimant’s work as of the time the Notice of Furnishing is given. Thus if the owner has not yet paid the contractor for the claimant’s work performed prior to receiving the (late) Notice of Furnishing, then the claimant can recover those funds as well. If the Notice of Furnishing is timely given, then the claimant has a full price lien, even if the owner has paid the contractor in reliance on a sworn statement and lien waivers. [570.1109]

ON ALL PROJECTS EXCEPT HIGHWAY PROJECTS:

-Amount claimed

-Name of party for whom la­bor or materials were fur­nished.

Neither the statute nor the case law discuss who should sign the form, thus recommend having claimant sign it. [129.­207]

ON HIGHWAY PROJECTS:

-Identify project

-Identify claimant’s work or goods;

PLUS:

(a)Where claimant is a subcontractor:

-Statement that claimant is a subcontractor for the doing of some part of the work, and specify the part of the work

-Statement that claimant relies on the security of the bond given by the general contractor.

(b) All others, except laborers:

-Statement that the contractor or subcontractor is indebted to the claimant in a specific amount or for the furnishing of certain specified materials or supplies on account of the contract. [570.102; Schor at §23.02[D]])

Within one year of record­ing lien. For a claim against a lien discharge bond, however, a recent case holds that suit must be brought within six years of recording the lien. [570.1117; E.R. Zeiler Excavating, Inc. v. Valenti Trobec Chandler Inc.,
270 Mich.App. 639, 717 N.W.2d 370 (Mich.App.,2006)] NOTE, HOWEVER, that a contractor or subcontractor cannot file a suit, or counterclaim, etc. unless it has filed the sworn statement(s) set out above. [570.1110] NOTE that the lien will not attach to a residential structure to the extent that payments have been made, if the owner files an affidavit with the court stating that the owner or lessee has paid the contractor according to the contract. The owner must also attach copies of the contract, change orders, and evidence that payment has been made. [570.1118a]

More than 90 days after last delivery, but less than one year after final payment was to be made to general contractor. [129.­207, 129.209]

(On highway projects: within 1 year of completion AND ACCEPTANCE of project. [570.104; Schor at §23.02[D]])