What are the requirements to file a lien as a subcontractor?
Full Question:
Answer:
Michigan allows unpaid contractors, subcontractors, laborers or material suppliers who have provided an improvement to real property to file a construction lien against the property. This right applies to private projects only, and requires the claimant to meet certain notice and filing requirements. Special requirements apply for improvements to residential structures that are not detailed in this summary.
Before any actual physical improvements to the property are begun, the owner or lessee contracting for the improvements is required to file in each county where the real property is located a form known as a Notice of Commencement. A copy of the notice must be conspicuously posted at the property, and must also be provided, along with a blank notice of furnishing form, to a subcontractor supplier or labor within 10 days of their mailing of a written request by certified mail. The notice of commencement must contain a legal description of the property; the name, address and capacity of the owner or lessee of the property; the name and address of the owner's or lessee's designee; the name and address of the general contractor, if any; statutory language summarizing how to protect lien rights; the name and address of the person preparing the notice; and, an affidavit of the owner, lessee or agent verifying the notice.
A subcontractor or supplier who contracts to provide an improvement to real property must provide a notice of furnishing to the designee and the general contractor at the address shown in the notice of commencement, either personally or by certified mail, within 20 days after furnishing the first labor or material.; A laborer must supply the notice within thirty days after wages were contractually due but not paid, or, in the case of fringe benefits or withholdings, by the fifth day of the second month following the month in which fringe benefits or withholdings from wages were contractually due but were not paid. Note that a contractor, i.e., a person or entity with a direct contract with the owner/lessee/tenant, is not required to provide a notice of furnishing. A written Proof of Service of the Notice of Furnishing should be prepared and kept by the subcontractor, supplier or laborer for filing with any subsequent Claim of Lien. Note that even if this deadline is missed, it is not necessarily fatal to one's lien rights. In such circumstances the Notice of Furnishing should be served as soon as possible.
A contractor must provide a sworn statement to the owner or lessee when payment is due or requested, or when a demand for the sworn statement has been made by or on behalf of the owner or lessee. Similarly, a subcontractor must provide a sworn statement to the contractor when payment is due or requested, and to the owner or lessee when a demand has been made by or on behalf of the owner or lessee. The sworn statement must list each subcontractor and supplier with whom the person issuing the sworn statement has contracted relative to the improvement to the real property, and also list laborers with whom the person issuing the sworn statement has contracted and for whom payment of wages or fringe benefits and withholdings are due but not paid. The contractor or subcontractor completing the sworn statement must swear that he has not procured material from or subcontracted with any person other than those listed and that he owes no money for the improvement other than those sums listed. The contractor or subcontractor is not required to lists material furnished out of his own inventory that was not purchased specifically for performing the contract at issue. A contractor or subcontractor may not file an action to enforce a construction lien until the sworn statement has been provided.
A contractor, subcontractor, labor or supplier must record a claim of lien within 90 days after last furnishing of labor or material for the improvement, pursuant to the lien claimant's contract. A claim of lien by a subcontractor, supplier or laborer must have attached a proof of service of the Notice of Furnishing. Within 15 days after the date of the recording, a copy of the claim of Lien and a copy of any proof of service recorded with it must be served on the designee either personally or by certified mail. A Proof of Service form should be completed and must be attached to any complaint filed to enforce a construction lien.
An action to enforce a construction lien must be brought not later than one year after the date the claim of lien was recorded.
