FOUR THINGS EVERY CONSTRUCTION CONTRACTOR SHOULD KNOW ABOUT THE MICHIGAN CONSTRUCTION LIEN ACT
Posted by Dominic Silvestri on Jul 22, 2015 in Articles | 1 comment FOUR THINGS EVERY CONSTRUCTION CONTRACTOR SHOULD KNOW ABOUT THE MICHIGAN CONSTRUCTION LIEN ACT Construction contractors are often some of the hardest working individuals I’ve ever met. And this time of year is no different. Unfortunately, many contractors are so focused on cranking out the work (which is to be expected and not a bad thing), that they often don’t have time to devote to other parts of their business. One important yet overlooked, part is understanding the Michigan Construction Lien Act and how it can protect their hard work in the event of non-payment. To simplify, I’ve summarized 4 things that every construction contractor should know about the Michigan Construction Lien Act: Notice of Commencement The Notice of Commencement is something that should be requested the minute the contract is signed with the general contractor. This document is important for a number of reasons. But mainly because it identifies some major information about any construction project: specifically, it identifies the owner of the property, the general contractor and the legal description of the property. This information is crucial to making sure your rights are protected. For example, lets say you are the roofer who just found out your bid was accepted. You’ve been dealing with a general contractor, but do you know who the owner is? If not, the Notice of Commencement will give you that information. This is important because if you don’t get paid by the general contractor, and file a lien on the property, the owner may be able to defeat your lien if they had no clue who you were or what you provided. In order to file your lien if you don’t get paid, you’ll need the legal description of the property – again, this is provided in the Notice of Commencement. Ask for the Notice of Commencement at the same time you get the contract. Notice of Furnishing Like the Notice of Commencement, the Notice of Furnishing is a document the MCLA requires so that parties involved with a project, in this case the owners lenders and subcontractors, can protect themselves. Parties who supply labor or material and who do not have a DIRECT contract with the owner MUST provide a notice of furnishing to the owner or lessee and to the general contractor within 20 days after furnishing the first labor or material. See MCL 570.1109(1). Failure to provide this form does...read more