We have a property in Michigan where we performed water mitigation services. It is a leased space in part of an outdoor mall. Are we able to place a Claim of Lien on such a property?
May 21, 2019
That's a great question, and mechanics liens for tenant improvements can be a confusing topic. In Michigan, when work is authorized by a lessee, rather than by the owner of the property, the tenant's interest in the property is subject to lien. So, where a lessee contracts for work, that lessee's interest (the right to use the property, subject to the lease) will be subject to lien - not the underlying ownership interest. However, in some situations, depending on the relationship between the lessee and the owner, as well as the terms of their lease, work that is set out by the lessee might actually be considered "authorized" by the property owner.
Specifically, when the owner directs their lessee to make improvements, when the owner is aware of lessee improvements and has affirmed those improvements, or where the lease agreement between the owner and lessee requires the lessee to undertake certain improvements, the owner may be opened to lien claims against the underlying real estate (rather than just the lessee being affected by the lien claim).