Michigan law allows a contractor who makes an improvement to real property to record a construction lien against the owner of the property to secure repayment. Once the lien is recorded, it is then served on the property owner. This unnerves most homeowners who don’t know what a lien means. But, unless the homeowner is in the process of selling or refinancing the property, there is no reason to panic.
Having a construction lien recorded is not as serious as it sounds. In and of itself, the lien does nothing except create a temporary cloud on title. The recording of a construction lien creates starts a one year clock running. A contractor has one year from the date a lien is recorded to file a lawsuit to foreclose the lien. Nothing happens unless and until the contractor follows up and files a lawsuit.
There are two basic ways to remove a construction lien. First, if no lawsuit is filed within a year, the homeowner can obtain a certificate from the circuit court clerk confirming that no lawsuit has been filed and the lien is removed by recording the clerk certificate with the register of deeds. The second way is through a bonding-off process. This allows a bond to be purchased which replaces the lien as security.
Another reason why a lien may not be a big deal is that there are many strict requirements that a contractor must meet in order for the lien to be enforceable. Frankly, it is a rare contractor who perfectly complies with the requirements of the Michigan Construction Lien Act.
So, what should a homeowner do when served with a lien? If you have no need to refinance or sell, it might be best to simply wait and see if the lien expires in a year if the contractor does not file suit. Otherwise, contact an experienced construction lien attorney. It is relatively simple for an experienced construction lien attorney to determine whether the lien is likely enforceable and to present the homeowner with options. A paid consultation lasting approximately an hour is usually sufficient.
Attorney W. Jay Brown has vast experience defending and enforcing construction liens and regularly provides consultations to homeowners regarding construction liens and contractor issues.
Midland Michigan business, real estate, construction and commercial lawyer W. Jay Brown provides experienced representation of businesses and individuals throughout Mid- Michigan. Brown Law PLC – 414 Townsend, Suite 201 – Midland Michigan 48640 – (989) 486-3676 – firstname.lastname@example.org – www.brownlawplc.com
Disclaimer: The foregoing is not intended to be specific legal advice on any particular set of facts or circumstances nor to establish any attorney-client relationship. Such materials are for informational purposes only. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal issues or problems.