Construction Liens
A construction lien attaches the debt to the property itself. It is the most effective collection tool in the industry, and it is governed by deadlines that do not forgive.
Michigan's Construction Lien Act allows contractors, subcontractors, suppliers and laborers who improve real property to record a claim against that property for what they are owed. Because the lien clouds title, it stops a sale or a refinance, which is precisely why it produces payment when invoices do not.
The Act is also strictly construed and highly technical. It requires specific documents, delivered to specific people, within specific windows measured from specific events. Miss one and the lien rights are gone, regardless of how clearly the money is owed. The underlying contract claim may survive, but the leverage does not.
If you are approaching a deadline to record a lien, or you have been served with a lien foreclosure complaint, call rather than using the form. This is the area of the practice where waiting a week most often decides the outcome.
Perfecting a lien
The sequence differs depending on whether you contracted directly with the owner or you are further down the chain. Parties without a direct contract with the owner carry the heaviest notice burden, and it is the step most often missed.
| Step | What it does |
|---|---|
| Notice of commencement | Recorded and posted for the project. It tells everyone on the job who the owner is and where notices must be sent. Subcontractors need a copy to protect themselves. |
| Notice of furnishing | Served by parties who did not contract directly with the owner, within a short window measured from when they first furnished labor or material. Missing it generally defeats the lien. |
| Claim of lien | Recorded with the register of deeds within the statutory period measured from the last day labor or material was actually furnished, and served on the owner. |
| Sworn statements and waivers | Exchanged with payment applications. They tell the owner who is owed what, and they are how an owner avoids paying twice. |
| Foreclosure action | Filed within the statutory period after recording. If the deadline passes without filing, the lien expires and cannot be revived. |
Two details cause most failures. The clock generally runs from the last date of actual work, and returning to the site to perform warranty or punch list items usually does not restart it. And the lien amount must be accurate, because inflating a claim can expose the claimant to liability rather than simply reducing the recovery.
When a lien is recorded against your property
Owners frequently discover a lien from a subcontractor they never hired and may never have heard of, sometimes after having paid the general contractor in full. That is unwelcome and it is how the Act operates, which is why the sworn statement and waiver process exists.
- Whether the notice requirements were actually met, which is the most common defect
- Whether the claim of lien was recorded within the period and correctly served
- Whether the foreclosure action was filed before the lien expired
- Whether the amount claimed is accurate and supported by work actually performed
- Whether the legal description and the parties named are correct
- Whether payments already made, with proper waivers, reduce or defeat the claim
- Whether the work qualifies as an improvement to the property at all
Where a lien is invalid it can be challenged and discharged. Where a project needs to close despite a disputed lien, it may be possible to bond around it, substituting security for the property so the transaction can proceed while the dispute continues.
How a lien matter runs
- Dates firstFirst and last furnishing, notice dates, recording date. Everything else is secondary to whether the deadlines were met.
- The paper trailContract, notice of commencement, notices of furnishing, payment applications, sworn statements, waivers and proof of what was paid.
- Validity assessedWhether the lien is enforceable, and whether the amount is supportable. Both sides need this answered before spending on the fight.
- Foreclosure, discharge or resolutionFiling to foreclose before expiry, moving to discharge an invalid lien, bonding around one to permit a closing, or negotiating payout.
Questions about liens
I already paid my contractor in full and a subcontractor filed a lien. Do I have to pay twice?
Not necessarily, and this is exactly what the sworn statement and waiver process is designed to prevent. Whether you are protected depends on what documentation you obtained with each payment and whether the subcontractor met its own notice obligations. Bring the payment records and any waivers you received.
How long do I have to record a lien?
A limited period measured from the last day you actually furnished labor or material to the project. Do not measure from your invoice date, and do not assume a return visit for punch list or warranty work restarts it. If you are close, treat it as urgent.
Does recording the lien get me paid?
Recording preserves the right. It frequently produces payment on its own, because the owner cannot sell or refinance over it. But the lien expires unless a foreclosure action is filed within the statutory period, and claimants lose real money by recording and then waiting.
Can I sell my house with a lien on it?
Practically, no. A title company will require it resolved, paid or bonded around before closing. If a closing date is approaching and a lien is on the property, that is a call rather than a form submission.
Lien deadlines do not extend for any reason.
[PHONE]Matters with a lien deadline, a filing deadline or a hearing already on the calendar are handled by phone.