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Can we lien labor associated with IT installations?

I work for a factoring company and we have a new client that is based out of Texas, but has done some work in Michigan. His invoices are for the installation/testing of IT equipment in hardware stores. We are trying to figure out if our client has the option to file liens on these invoices.

5 replies

Sep 13, 2019

Hmmm. Interesting question. Generally, construction lien rights in Michigan arise from improvements to real property. Section 107 of the lien statute provides in relevant part that “Each contractor, subcontractor, supplier, or laborer who provides an improvement to real property shall have a construction lien upon the interest of the owner or lessee who contracted for the improvement to the real property.”

A contractor is a “person who, pursuant to a contract with the owner or lessee of real property, provides an improvement to real property.”
Supplier means “a person who, pursuant to a contract with a contractor or a subcontractor, leases, rents, or in any other manner provides material or equipment which is used in the improvement of real property.”
Laborer means “an individual who, pursuant to a contract with a contractor or subcontractor, provides an improvement to real property through the individual's personal labor.”

So, the answer to your question would turn initially on whether the installation and testing of IT equipment is an improvement to real property. If by IT equipment you mean computers or POS cash registers, I would say No, your client (either a contractor or supplier under the statutory definitions) isn't improving the real property. They're installing or testing personal property. If by IT equipment you mean a data center or a computer room or something that is affixed or integrated with the real property, rack-mounted servers, etc., there would be a stronger argument that your client is making an improvement to real property. But without knowing more of the facts, that's my best answer to your question. Hope it helps.

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Mar 13, 2020

I just wanted to follow-up and confirm your company recovered the invoices factored for your new Texas client. If I can further assist your company with any unpaid invoices, please feel free to call or email. My firm can collect for you even when lien rights have expired or were never pursued. Mike Ross Miller, Ross & Goldman mross@mrgpartners.com (512)275-6412 Direct https://www.mrgpartners.com/levelset

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