If you are in the construction business, you will know that non-paying clients have become a common sight in this line of business. The best weapon to deal with such clients is a mechanic’s lien. This legal document helps you recover any payment that is due from your non-paying client. It is important for you to understand that filing a mechanic’s lien helps you to limit the market value of a property by simply warning possible buyers and different financiers about the various outstanding debts related to the said property. This forces the property owners to clear off the debts and get rid of the lien.
Who Can File a Mechanic’s Lien in Michigan?
In a majority of the cases, most of the parties that are associated with the construction or improvement of a property have the legal authority to file a mechanic’s lien in the state of Michigan. These include general contractors, material suppliers, sub-contractors, and laborers.
It is important for you to understand that some additional qualifications may be needed for those parties who are associated with a residential property. If you are a general contractor, who is working on a residential property with a maximum of 2 units, you need to have a written contract with the property owner or the lessee before you can go ahead to file a lien. It is also important for you to be licensed under the Michigan occupational code.
Pre-Lien Notices
Before filing a mechanic’s lien in Michigan, you need to provide some notices to the owner. It is important for you to know that there are two pre-lien notices in the state of Michigan that you need to serve. This depends upon the role of the said project. The two pre-lien notices are Notice of Furnishing and the Sworn Statement.
Notice of Furnishing
In order to file a valid and a genuine mechanic’s lien in the state of Michigan, a Notice of Furnishing will be needed from all the parties who lack a direct contractual relationship with the owner of the property. This notice basically informs the owner of the property of your contribution to the construction project and also warns them about the possibility of having to pay twice.
The Notice of Furnishing needs to be served within a period of 20 days from the first day of work. This notice also needs to be sent to the owner of the property through wither a certified or registered mail or personal delivery.
Sworn Statement
The Sworn Statement is another pre-lien notice that may be needed from both general contractors and sub-contractors. It is basically needed for all general contractors, sub-contractors, and also the raw material suppliers who are associated with a residential construction project. In case of a non-residential project, the Sworn Statement may be needed upon request from the owner of the property or even the general contractor.
This notice lists all the names of the sub-contractors who were working for you in the project. This notice is sent to let the owner know about the parties who are taking part in a construction project.
