Without a Notice of Commencement in Michigan, it can be hard to remember exactly when the construction project started. It’s a lot like this: Have you ever walked into a room and forgotten why you went in there? Have you ever told yourself “I’ll remember that! I don’t need to write it down…” and then forgotten?
Of course you have. You’re human.
On a construction project, a similar phenomenon occurs with the start of a job. Construction jobs go on for months and months (and potentially years and years). When a project gets rolling, it’s incredibly easy to forget exactly when a job began. That is, it’s easy to forget that date without a Notice of Commencement. Michigan is one of the very few states where a Notice of Commencement is mandatory on all projects. Let’s look at the nuts and bolts of the notice and how it applies to lien law your lien rights.
Who Files the Notice of Commencement in Michigan?
In the State of Michigan, the real property owner (or lessee) needs to file the Notice of Commencement.
Where Do Owners File a Notice of Commencement?
Property owners file Notices of Commencement with the register of deeds for the county where the real property is located. The property owner must also post a copy of this notice on the job site in a conspicuous place. This allows any potential mechanics lien claimant can find it. With that in mind, you shouldn’t have that much trouble locating a copy of the Notice of Commencement.
When Do Owners File a Notice of Commencement?
The property owner must file the NOC at the start of the project. If for some reason they don’t file the notice at the beginning, they must file it just after any contractor or supplier furnishes labor/materials to the project.
What’s in a Notice of Commencement in Michigan?
Notices of Commencement in Michigan should have the following information:
- The legal description of the real property
- The basic information and address of the owner (or lessee)
- The name and address of the fee owner of the real property, if the person contracting for the improvement is a land contract vendee or lessee.
- The name and address of the owner or lessee’s designee
- The basic information address of the general contractor
- Notices of Commencement in Michigan should also contain this following statement:
“To lien claimants and subsequent purchasers:
Take notice that work is about to commence on an improvement to the real property described in this instrument. A person having a construction lien may preserve the lien by providing a notice of furnishing to the above named designee and the general contractor, if any, and by timely recording a claim of lien, in accordance with law.
People having a construction lien arising by virtue of work performed on this improvement should refer to the name of the owner or lessee and the legal description appearing in this notice. A person subsequently acquiring an interest in the land described is not required to be named in a claim of lien.
A copy of this notice with an attached form for notice of furnishing may be obtained upon making a written request by certified mail to the above named owner or lessee; the designee; or the person with whom you have contracted.”
Is this Information that Important?
Oh yeah. For instance, subcontractors working on Michigan construction jobs need to file a Notice of Furnishing to the owner and prime contractor within 20 days of first furnishing labor and/or materials to a job.
Plus, you’ll notice that there is a lot of overlap between the mandatory information on Michigan’s Notice of Commencement and on a Michigan lien claim. For lien claimants, gathering this information can be a virtual nightmare. But a Notice of Commencement wraps it up with a neat little bow.
Preliminary Notice Extended
Finally, and this may be the most important point: If the Notice of Commencement isn’t filed, the time to provide preliminary notice is extended. Under Michigan law, a Notice of Furnishing is generally required within 20 days of first furnishing labor or materials to the project. But under Sec. 108(10) of the lien statute, if an owner doesn’t file a Notice of Commencement, you don’t need to send that Notice of Furnishing “until 20 days after the notice of commencement has been recorded.”
Now, let’s not forget about best practices. You should still send the notice at the start of the project, and it’s a bad idea to try and use a (potentially) missing Notice of Commencement as an excuse to not send notice. But if you forget to send a Notice of Furnishing and the owner didn’t file a Notice of Commencement, you might be in luck.