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Can a General Contractor withhold project information to a sub/supplier if they have a Non-Disclosure Agreement with the property owner?

MichiganNotice of Commencement

Can a General Contractor withhold project information (i.e. Property Owner contact information, etc) from a sub/supplier if the GC has a Non-Disclosure Agreement with the property owner? This is information we've tried to gather for a preliminary notice but they state they can't provide because of the NDA.

7 replies

Sep 3, 2019

Short Answer: No. A subcontractor or material supplier is entitled to know the name of the Owner or Lessee who is contracting for the improvement. The contract amount itself might be confidential, but the name of the Owner or Lessee is not. Property ownership information is a matter of public record. Call the local tax assessor or check with local register of deeds (online information varies by county). Request a Notice of Commencement from the Owner or Lessee and the General Contractor. Make this request by certified mail. The Owner or Lessee has 10 days from the request to furnish a Notice of Commencement. Thereafter, you need to prepare and serve a Notice of Furnishing within 20 days of furnishing the first labor or material. Long Answer: Section 108(1) of the Michigan Construction Lien Act requires that "Before the commencement of any actual physical improvements to real property, the owner or lessee contracting for the improvements shall record in the office of the register of deeds for each county in which the real property to be improved is located a notice of commencement, in the form set forth in this section. If all improvements relate to a single project only 1 notice of commencement need be recorded. A subsequent notice of commencement need not be recorded for an improvement to any real property which currently has a notice of commencement recorded in the office of the register of deeds if that recorded notice of commencement contains the same information as the subsequent notice of commencement." The Notice of Commencement shall contain the following information: (a) The legal description of the real property on which the improvement is to be made. (b) The name, address, and capacity of the owner or lessee of the real property contracting for the improvement. (c) 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. (d) The name and address of the owner's or lessee's designee. (e) The name and address of the general contractor, if any. (f) The 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. "A person 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.” (g) The name and address of the person preparing the notice. (h) An affidavit of the owner or lessee or the agent of the owner or lessee which verifies the notice.

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Sep 6, 2019

So this is Michigan Lien Law, what about Indiana? We are in Michigan, but our contract is with a company in Indiana.

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Sep 6, 2019

Hmmm... I don't practice in Indiana and don't know all the nuances of their lien statute. But where is the project itself? Michigan or Indiana? If it's in Michigan, then Michigan's lien statute would apply.

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Sep 6, 2019

Agree with all of the responses provided by Peter here. I'll just add to his last comment about which law applies. It's very common for many parties to come together in construction from many different states. Material suppliers, equipment providers, contractors, developers, lenders, sureties, etc., are all typically located and headquartered all over the place. This can create some confusion about what law applies. This gets even more confusing when companies have contracts between one another, because those contracts typically have provisions about which law will apply in the event of a contractual dispute. However, for most issues like this that arise on a construction project, the laws that will apply are the laws where the project is actually located. In this case, based on the question criteria, it looks like the project is located in Michigan. Therefore, notice of commencement rules, prelim notice rules, lien waiver rules, mechanics lien and bond claim rules, prompt payment requirements, retainage restrictions, construction trust fund statutes, etc., etc., all of this stuff is dictated by the Michigan laws...regardless of where the companies are located, and regardless of whether the parties have a contract that chooses some other state as the law that applies to the contract. So, let's say in this case that you have a contract with an Indiana company, and that you are even an Indiana company. Your contract has a NDA within it. The contract says that the terms of the contract will be governed by Indiana law. Even with all of this, if the project is in Michigan, the notice of commencement requirements and the Michigan Construction Lien Act will control.

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Sep 6, 2019

Here are a few more specifics, my customer (from Indiana) drops a piece of equipment to our location that we work on (in Michigan). My customer (located in Indiana) picks up the equipment then takes the equipment....somewhere? They would not disclose final customer or location because they said they said they had an NDA and could not reveal their final customer. Does that make sense?

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Sep 9, 2019

I don't know all the facts in your situation, but what you're now describing may not involve a construction lien. If you are receiving, repairing and returning equipment to a customer, I don't think that such repairs qualify as an "improvement to real estate" and don't fall within the scope of the Michigan Construction Lien Act. However, Michigan has an "artistan's lien" statute that may offer protection where someone repairs a piece of equipment. The lien, in that case, is perfected by possession. That is, you hold onto the repaired equipment until it is paid for. Relinquishing possession destroys lien.

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Sep 9, 2019

Thank you for your time and responses.

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