Construction Frequently
Asked Questions.

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Preliminary Notice FAQ

A Michigan preliminary notice is a letter sent by a contractor, laborer or supplier to the property owner at the start of a construction project. In many states, a preliminary notice is required to be sent in order to secure the right to lien.

Michigan requires certain preliminary notices to be sent at different points of the construction period, namely Sworn Statement (for general contractors), which consists of a list of subcontractors and suppliers, and Notice of Furnishing (for subcontractors, suppliers and laborers).

A general contractor must send a Sworn Statement upon request from the property owner.

 

Subcontractors and suppliers must send a Notice of Furnishing to the owner and prime contractor within 20 days of first providing labor or materials. Laborers have 30 days after wages became due and were not paid to send this notice.

Since preliminary notices are a requirement, not sending them when you need to will invalidate your lien claim.

Intent To File FAQ

A Michigan notice of intent to lien is sent before the filing of a mechanics lien becomes necessary. Although only a number of states require that this notice be sent, many construction participants send a notice of intent to lien as an uncostly way to have payments for invoices settled.

Michigan does not require a notice of intent to lien to be sent before filing a mechanics lien. However, you may still choose to send this notice to the owner as a reminder that a payment is due.

You may send a Michigan notice of intent to lien at least 10 days before your intended date of lien filing to give the owner enough time to settle payment.

Since a notice of intent to lien is not required in Michigan, not sending it will have no effect on your claim.

Mechanics Lien FAQ

A Michigan mechanics lien is an effective tool that helps make sure you will be paid for the construction materials and/or labor you supplied. It is a legal claim that guarantees payment for contractors.

This means that if you file a valid mechanics lien on a project you worked on and weren’t paid for your work, you have the right to enforce the lien through a lawsuit. This enforcement action can either prompt the client to settle or force the sale of the property. The proceeds of the sale will be used to settle your unpaid bill.

With a valid Michigan mechanics lien, you have an interest in the improved property. When a mechanics lien is filed on the property you worked on, the property becomes collateral for uncollected payments.

In Michigan, contractors, subcontractors, suppliers, and laborers, regardless of their tier in a project, may file a mechanics lien.¹ 

Suppliers to subcontractors have lien rights, too, but suppliers to suppliers do not.

Only contractors and subcontractors who are licensed may file a mechanics lien if working on a residential project.

You must file your Michigan mechanics lien with the Registry of Deeds within 90 days of last providing materials or labor.²

You need to enforce your Michigan mechanics lien within 1 year of filing. It will expire after this period if no action to enforce is taken.³

A Michigan mechanics lien must contain the following information:

  • The claimant’s name and address
  • A legal description of the property subjected to the lien
  • The name of the owner of the property or its lessee
  • The date on which the claimant first provided labor or materials
  • The date on which the claimant last provided labor or materials

If you are a contractor, subcontractor or supplier, you need to include the following:

  • The contract amount, along with additional amounts
  • The amount paid to you
  • The claim’s amount

If you are a laborer, include the following:

  • Your hourly rate, along with fringe benefits and withholdings
  • The amount of your claim
  • Your sworn signature, or a sworn signature of your agent or attorney, with a notary acknowledgment

If you worked on a residential project in Michigan, you need to be licensed to file a mechanics lien. Unless you are a plumbing, electrical or mechanical subcontractor, you also need to be licensed as a residential builder or as a residential maintenance and alteration contractor to have lien rights.⁴

If you do not have a license under these conditions, your lien is not valid and you may even be charged with a felony or misdemeanor.

Michigan has legislatively designed lien waiver forms that are required to be used. Any lien waiver form that does conform to this design will be considered invalid.

As a claimant, you are required to cancel a Michigan mechanics lien upon the paying party’s satisfaction of the payment.

Pay if paid clauses are enforceable in Michigan if they contain “condition precedent” language.

Pay when paid clauses are enforceable if framed as requiring payment within a reasonable period.

References:

https://www.legislature.mi.gov/

Michigan Construction Lien Act

¹ Michigan Construction Lien Act Section 570.1107

² Michigan Construction Lien Act Section 570.1111

³ Michigan Construction Lien Act Section 570.1117

Michigan Construction Lien Act Section 570.1114

Handle.com provides answers to Frequently Asked Questions (FAQs) to contractors and others who are seeking information regarding preliminary notices, intent to file, mechanics lien, and other construction questions. These are provided for informational purposes only, and we cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.

Michigan documents

Mechanics Lien

Still chasing payments on a construction project? File a Mechanics Lien on the project to recoup unpaid labor and materials.

Notice of Commencement

Don't lose your lien rights. A Notice of Commencement informs parties that a project has officially began and will come in handy in case of delinquent payments.

Preliminary Notice

Secure rights to file a lien and notify parties you’re on the job. Not filing a preliminary notice may result in lost revenue in case of a delinquent client.

Release of Mechanics Lien

Finally got paid? Issue a release of mechanics lien to resolve the payment dispute with finality.

Waiver

Waivers release your right to file a mechanics lien in case of non-payment. Some have conditions so ensure you're sending the correct lien waiver type.