A construction lien is a great tool for companies looking
to collect on a bill that a property owner has not paid, whether it is because
they don’t have the money or are in bankruptcy.
But there are some extremely important parts of the
Michigan Construction Lien Act that must be followed to the letter of the law
to make sure you get paid through the lien process.
The first is the “Notice of Commencement.” You should
always request this notice from the time you start on a new project if you
don’t have a contract directly with the owner. The owner or the person asking
for the property improvement prepares this notice, which includes information
like the property’s legal description, the general contractor’s name and who
should receive notices if there is a need for a lien down the road.
The owner or lessee must give this Notice of Commencement
to any subcontractor, supplier or laborer within 10 days of receiving a written
request for one. Any request for a Notice of Commencement must be made via
certified mail to follow the Act’s strict requirements. So a trip to the post
office is an important first step.
The Act requires that a property owner or its
representative record the Notice of Commencement with the Register of Deeds in
the county in which the property is located and physically post a copy on the
property as well.
Get this paperwork in place before you put a shovel in
the ground. If you need to file a lien, you’ll need to know the right person to
send the paperwork. Without having this Notice of Commencement, you’ll be
searching in the dark and payment may not come.
Another form the Act requires is called a “Notice of Furnishing.”
No, this has nothing to do with furniture or interior design. Think of it as an
alert to the owner about what you’re supplying – labor or materials – to the
job.
In other words, it is a piece of paperwork that clearly
outlines what you are furnishing or providing on the project in terms of labor
or material. This labor and material is connected to the improvements you’re
making to the project or real property.
A Notice of Furnishing also alerts the owner that a
particular subcontractor, supplier or laborer is involved and will expect to be
paid. The owner then can track the project, especially when it comes to payment
issues.
Let there be no doubt about it – you must have this
required form and it must have the names of the people you are providing the
materials to as well as the labor and the materials you’ve provided. Think of
it as a way of making sure everyone’s on the same page when it comes to the
project at hand.
Who should send a Notice of Furnishing? All of your
subcontractors, suppliers and laborers. Making sure everyone is clear on what
is being provided will be key if you need to file a lien down the road.
The Notice includes the person or party you have a
contract with and briefly describes the work in general terms. For example, you
might say plumbing, heating or brick laying as the work you’re providing on the
job site. In terms of supplies, you would say lumber, equipment or building
materials. The more specific you can be the better.
The Notice should be signed with your company name and
your title, or your role within the company as president, partner, owner or the
like. You should send it to the owner or lessee via certified mail with a
return receipt. Make sure to keep a copy for your records as well.
The Notice of Furnishing must take place within 20 days
of your first date of working on this particular job. If you do not file this
Notice within that time range, it may affect your ability within the courts to
get your payment on the work you’ve done. If you are a laborer, you have 30
days after your wages were due to send your Notice of Furnishing. This Notice
of Furnishing should be clearly posted at the job site.
If you want to make use of the Michigan Construction Lien
Act, contact the experienced, trustworthy attorneys at The Lien Company to file
the appropriate lien and related papers. We will make it easy to put a lien in
motion and follow through on it to make sure you are paid for the work you have
done.
