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How do I file a lien on a back charge?

We are a sub-contractor and multiple invoices are used for 1 project. We sent a NOI to a General Contractor regarding a project, for a specific invoice, and they paid in full. So that has been taken care of. However, the GC has sent us a back charge on that specific job as a whole. The back charge is not for any specific invoice. My question is what is our lien rights in a situation such as this? How do we move forward with a NOI/lien for that?

2 replies

Dec 14, 2018

First, I'm glad you got paid! But that's definitely a unique situation, and it's not one that the Michigan lien statute - or really any lien statute - specifically contemplates. However - looking to lien rights as a whole might provide a little clarity. Mechanics lien rights arise as a result of amounts owed and unpaid for construction work. When work is performed and payment is short of what the party performing work is owed, typically, lien rights will arise for amounts owed and unpaid. Now, when a contractor issues a back charge, that contractor is asserting that certain amounts are not due because of some issue with performance on the project. So, ultimately, the situation seems fairly similar to the ability to file a lien when workmanship is in dispute. If there's a valid basis for a contractor's back charge, a claim for payment that is missing due to such a charge might not be appropriate. If the back charge is made without bases and a contractor is simply trying to use a back charge as a way to withhold payment, then a claim could be appropriate. Without knowing more about the nature of the back charge, it's hard to know one way or the other - but even then, the validity of a potential claim would ultimately be up to a court (if the dispute got that far). But, as for what a lien based on a back charge would be filed against - a mechanics lien, regardless of the basis for the lien, will attach to the underlying property. If possible, it might be a good idea to try and clear the air with the contractor to discuss amounts unpaid and the reasons therefore before taking drastic action one way or the other.

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Sep 30, 2022

Fraudulent back charges working on a large project general contractor is way behind schedule and is struggling on project project manager is constantly saying he is going to back charge for tasks not included in work scope / contracts how do I combat that .

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