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How does one contest a lien - commercial project?

I'm the property owner. What if the lien filed is inaccurate? What recourse do I have? Builder went beyond documented budget max. Builder kept 'spending' after I cut off funds (at budget max). I spent $96k on vendors beyond the max budge on items that were inside scope of work. Lien filing was signed and notarized on 11th of month with reference to work that was done on 14th - 3 days after notarization. Funds stopped flowing in December 2019, builder filed lien September 2020 - about 7 months after last task was done (in Feb). I can't afford lawyer support because i'm so upside down over 2 years after start on what should have been a 4-5 month project. And most tasks are still incomplete. Seems unfair to me. Detroit, MI metro area.

1 reply

Feb 24, 2021

In Michigan, a Claim of Lien is invalid if it is filed more than 90 days after labor or materials are delivered to the project. In this instance, it sounds as though the Claim of Lien should not have been recorded and should be voluntarily discharged by the contractor after they have been notified of the invalid lien. If that still does not work, it may make sense to delay a lawsuit to have the lien removed because the lien will legally "lapse" if the contractor does not file suit to foreclose it within one year of the date the lien was recorded. So, if the contractor does not file suit to foreclose the lien within one year, you can follow a process under Michigan law which allows the lien to be legally "discharged" by the county clerk / register of deeds. The law in Michigan which requires a lien foreclosure lawsuit to be filed within one year can be found at MCL 570.1117(1). Specifically, the statute provides: "Proceedings for the enforcement of a construction lien and the foreclosure of any interests subject to the construction lien shall not be brought later than 1 year after the date the claim of lien was recorded." If the contractor files a lawsuit to foreclose the lien after one year, you have two arguments. First, it sounds like the Claim of Lien was recorded late. Second, even if the Claim of Lien was recorded on time (within 90 days of the last date of providing labor or materials to the project), the contractor's opportunity to foreclose the lien is permanently barred -- there is no gray area here -- if the lawsuit is filed more than one year after the date the Claim of Lien was recorded at the office of the register of deeds. Your best (and least expensive) course of action right now might be to simply send a letter asking the contractor to voluntarily record a Discharge of Claim of Lien since it seems like it was recorded late (more than 90 days after the last day of providing labor or materials to your project). If they refuse, and file a lawsuit before the 1 year deadline, it sounds like you might have a strong defense related to their untimely filing.

Bruce A. Inosencio, Jr.
Inosencio & Fisk, PLLC
740 West Michigan Avenue
Jackson, MI 49201
Office: (517) 796-1444
Fax: (800) 981-5130
www.inosenciofisk.com

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