lien process?

MichiganConstruction ContractLien Waivers

I hired a contractor to do concrete work on my home.The contractor was responsible for supplying the concrete. After completion, I paid the contractor and had him sign a full unconditional waiver for labor and materials.I am now being contacted by the concrete supplier that they did not receive payment for concrete delivered to my property. The contractor is not responding, what is the next step I should take?

4 replies

Nov 23, 2021

I'm sorry you find yourself in this predicament. There are a couple of things you can do now, even before the concrete supplier records a construction lien against your home. 

First, write a letter to your contractor demanding they provide proof of payment to their supplier. Detail the timeline of your payment to the contractor. Even if the contractor does not respond, you're making a record. 

Second, since you paid your contractor in full, you can rely on a provision in the Michigan Construction Lien Act designed to protect homeowners from paying twice.  

To set up this defense, you will need to prepare an affidavit setting forth the facts to establish that you've already paid your contractor the full amount of the contract. You should include proof of of the contract amount and proof of payment (i.e., canceled checks, lien waivers). 

Section 118a of the Act provides: 

"(1) A claim of construction lien does not attach to a residential structure, to the extent payments have been made, if the owner or lessee files an affidavit with the court stating that the owner or lessee has paid the contractor for the improvement to the residential structure according to the contract, indicating in the affidavit the amount of the payment. The owner or lessee shall attach to the affidavit copies of the contract, any change orders, and any
evidence of the payment that the owner or lessee has, including, but not limited to, a canceled check or a credit card or other receipt." 

Even if the conrete supplier has not filed a construction lien or a lawsuit, I would send a Section 118a affidavit to the supplier as a way to discourage them from pursuing a lien against your home.  

If LevelSet doesn't have a Section 118a Homeowner's Affidavit form, I can help you prepare one to send the concrete supplier.  

Nov 23, 2021
There are a number of issues upon which your question touches. One of the goals of the Construction Lien Act is to help contractors get paid for their work and materials. That is why they are allowed to file liens. Michigan also has the Builder's Trust Fund Act, whose primary goal is to prevent home owners from having to pay twice for the same improvement. For example, the money you paid the contractor, for the concrete, is considered "trust funds" to be held by the builder for the purpose of paying the supplier. If the builder spends the money on anything else, it is a violation of that trust and may even be a criminal act. A violation of the Trust Fund Act may also cause the builder to lose his license. So, there are a number of laws and policies which are intended to protect you. If you wish to take action, I recommend that you contact a business attorney to help you write the letters and push the right buttons to get this resolved quickly. Keep in mind, however, that all suppliers must file their liens within 90 days of the last time they provided materials or labor on the job. If they miss that deadline, they are barred from filing a lien. In other words, you are not required to take any action. If you do nothing and the cement supplier does nothing, the lien issue goes away in 90 days. In other words, you have a number of strategies available to you.
Nov 23, 2021
I agree with Attorneys Olsen and Cavanaugh... to a point.. a lien that is filed more than 90 days after the cement was delivered will attach but you have a defense.. e.g. late filing so it is void. I strongly suggest you contact the contractor IN WRITING with a demand that the concrete supplier get paid. Remind him of the full unconditional waiver for labor and materials.
Nov 23, 2021
Agree with all of the previous answers. When you write to the contractor also demand a "Contractors Sworn Statement" per §110 of the Construction Lien Act. I think he has to do that within 10 days. He will have to show ALL suppliers and workers who have not been paid-in-full. The above response is provided as a courtesy and does not establish an attorney-client relationship.

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