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CHANGES TO THE MICHIGAN CONSTRUCTION LIEN ACT

March 6, 2019

CHANGES TO THE MICHIGAN CONSTRUCTION LIEN ACT

On Dec. 12, 2018, The Michigan Legislature made a significant change to the Michigan Construction Lien Act, which will take immediate effect, to allow for design professionals, defined as architects, professional engineers, servers, and their subcontractors, to now record liens for design services performed prior to the first physical improvement made to a property.

  1. Design professional or its subcontractor must record a “Notice of Contract” after executing a contract for its services, but before the first physical improvement to the property.
  2. The design services performed must have been authorized in writing by the owner.
  3. The Notice of Contract is effective from the date it was recorded and the lien it establishes takes priority over any subsequently recorded mortgage (as long as no physical improvement is made).

Design professionals may have a lien for preconstruction services they perform, regardless of whether a physical improvement to the property ever occurs. This change does not, however afford the same right to construction managers, trade contractors or suppliers who perform the same task.

Whether you are a contractor design professional, a subcontractor, or a contractor; it is important to know your rights before, during, and after a construction project.

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