Getting Paid Starts Here: Understanding Michigan Construction Lien Rights
Can You File the Wrong Lien?
Watch what Sid Woryn says about one of the biggest mistakes contractors can make when it comes to construction liens.
"You don't want to put a lien on somebody's house if they have paid everything... That would be a false lien."
It may sound surprising, but not every unpaid invoice gives you the right to place a lien on a property.
As Sid explains, if the homeowner has already paid the general contractor in full, filing a lien against that homeowner could create serious legal problems. Understanding who owes the money, who has been paid, and when lien rights actually exist is just as important as knowing how to file a lien in the first place.
The good news is that Michigan's Construction Lien Act provides a clear process for protecting your right to payment. The key is understanding the required notices, deadlines, and documentation before a payment dispute ever happens.
When Can You Actually File a Construction Lien?
A construction lien is designed to protect contractors, subcontractors, suppliers, and laborers who have not been paid for work they performed or materials they supplied. However, lien rights depend on several factors, including your role on the project, whether required notices were properly served, and whether the property owner has already fulfilled their payment obligations under Michigan law.
That's why understanding the process matters. Filing a lien without meeting the legal requirements can create unnecessary disputes, while missing an important deadline could mean losing your right to payment altogether.
Let's look at how the process works.
What Is a Construction Lien?
A construction lien (sometimes called a mechanic's lien) is a legal claim against a property by someone who provided labor, materials, or professional services to improve that property but was not paid.
The lien does not guarantee immediate payment.
Instead, it gives the unpaid party a legal interest in the property that may eventually be enforced through the courts if payment is not made.
Michigan law allows many different parties to claim lien rights, including:
- General contractors
- Subcontractors
- Material suppliers
- Laborers
- Equipment suppliers (in some situations)
- Certain design professionals
The Notice of Commencement
One of the first documents involved in many Michigan construction projects is the Notice of Commencement (NOC).
This document is prepared by the property owner before construction begins.
Its purpose is to identify:
- The property owner
- The legal description of the property
- The general contractor
- The owner's designee (if one has been appointed)
The Notice of Commencement serves as the roadmap for everyone involved in the project.
For subcontractors and suppliers, it tells you exactly where important legal notices must be sent.
Why Does the Notice of Commencement Matter?
If you're working directly for the owner, the Notice of Commencement may not significantly affect your lien rights.
However, if you're a:
- Subcontractor
- Material supplier
- Trade contractor
…it becomes extremely important because you'll likely need information from the Notice of Commencement when sending your Notice of Furnishing.
Always request a copy before beginning work if one is not provided.
What Is a Notice of Furnishing?
A Notice of Furnishing (NOF) tells the property owner and general contractor that you are supplying labor or materials to the project.
Think of it as introducing yourself to everyone responsible for payment.
It does not mean there is a payment problem.
It simply preserves important lien rights if payment issues arise later.
Who Must Send a Notice of Furnishing?
Generally speaking:
General Contractors
If you have a direct contract with the owner, you typically do not need to send a Notice of Furnishing to preserve your lien rights.
Subcontractors and Suppliers
If you work under another contractor rather than directly for the owner, you generally must send a Notice of Furnishing to preserve your construction lien rights.
Missing this step could significantly affect your ability to enforce a lien later.
When Must a Notice of Furnishing Be Sent?
Michigan gives subcontractors and suppliers a limited amount of time after first providing labor or materials to serve the Notice of Furnishing.
Serving it promptly is always the safest approach.
Waiting too long can reduce or even eliminate lien protection for work already performed.
The 90-Day Rule Every Contractor Should Know
One of the most important deadlines under Michigan's Construction Lien Act is the 90-day filing deadline.
If you are not paid, your Claim of Lien must generally be recorded within 90 days after your last furnishing of labor or materials to the project.
Notice what starts the clock:
Your last day of work or last delivery of materials—not the date the project is completed.
Many contractors mistakenly believe the deadline starts after final completion of the entire project.
It doesn't.
If your company finishes work weeks before everyone else, your 90-day countdown starts when your work ends, not when the building is finished.
Missing the Deadline Can Cost You
Construction lien rights are created by statute, meaning the deadlines are strictly enforced.
If the filing deadline passes, you may lose the ability to enforce your lien rights altogether.
Even if everyone agrees you completed quality work, courts generally expect lien claimants to follow the statutory deadlines.
Simple Example
Imagine this timeline:
- June 1: Electrician begins work.
- June 15: Final wiring is completed.
- July 30: Owner still has not paid.
- September 13: 90 days have passed since June 15.
If the electrician has not properly recorded a Claim of Lien before the deadline expires, important payment protections may be lost.
Best Practices to Protect Your Right to Payment
Michigan's lien laws can seem complicated, but following a few habits can make a big difference.
Keep Detailed Records
Maintain copies of:
- Contracts
- Change orders
- Invoices
- Delivery tickets
- Daily job logs
- Payment history
Documentation often becomes critical if a payment dispute develops.
Know Your Last Day on the Job
Record your final date of labor or material delivery.
That single date may determine your filing deadline.
Send Required Notices Promptly
Don't wait until payment problems begin.
Required notices are designed to preserve your rights before disputes occur.
Monitor Payment Closely
If invoices become overdue, don't assume payment is "coming soon."
Review your lien deadlines before valuable legal rights expire.
Seek Legal Advice When Necessary
Construction lien laws contain detailed procedural requirements.
If significant money is involved, consulting an attorney experienced in Michigan construction law can help protect your interests.
Why Every Michigan Builder Should Understand Lien Rights
Even if you never intend to file a lien, understanding the process helps you:
- Protect your business from unpaid work
- Better manage subcontractors and suppliers
- Reduce payment disputes
- Improve project documentation
- Operate more professionally
Knowledge of Michigan's Construction Lien Act is just one of many legal topics successful contractors should understand as they build their careers.
Stay Current on Michigan Construction Laws
Michigan's construction laws are designed to protect everyone involved in a project, but they only work if you understand your rights and responsibilities. Whether you're managing projects, hiring subcontractors, or supplying materials, staying informed about topics like construction liens can help you avoid costly mistakes and better protect your business.
At Michigan Builders License, our Michigan Continuing Competency (CC) courses go beyond helping you renew your license. They keep you up to date on important legal, business, and safety topics that affect contractors every day. From changes in construction law to best practices that help you operate more confidently and professionally, our courses are designed to provide practical knowledge you can apply on every job.
Complete your required Continuing Competency hours online, on your schedule, and continue building the knowledge that helps protect your business long after you've earned your license.
