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Why is a unlicensed contractor able to file a lien on my property

I live in Michigan. A contractor filed a lien on my home residence. He is trying to charge us $1800 for a door that only cost $600 so we withheld his final payment of $1100 for labor. He has since filed a mechanics lien on our home through your website levelset. He is not licensed and it expired in May of 2019. In Michigan, you must be licensed in order to file a mechanics lien on a residential property. How was he able to do this through the levelset website.

7 replies

Jul 8, 2020

I can't speak for LevelSet, but an unlicensed builder can record a construction lien in Michigan because the Register of Deeds doesn't check, and isn't obligated to verify, whether or not the person recording the lien is properly licensed. But an unlicensed builder cannot enforce its construction lien in court because, under Section 114a(3) of the Construction Lien Act, the builder is required to plead (allege) and prove it is properly licensed under article 24 of the Michigan Occupational Code (Residential Builders). If you suffer damages because of this builder's invalid lien, section 114a of the Construction Lien Act provides a remedy for homeowners. The remedy is a suit to remove the lien and recover damages. The lien amount in this case ($1,100) is rather small and it may be better to let the lien expire than spend money on a lawsuit. Construction liens in Michigan cease to be effective (expire) after one year unless the lien claimant files suit to enforce the lien, which they can't do in this case because they're unlicensed. I hope this answers your question.

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Mar 24, 2021

I would add that there are several other things to consider. For example, if you agreed to the price of $1800 for an installed door, and he installed the door, it makes no difference how much the door cost. You have a contract for $1800. Also, consider that all persons are not required to be licensed. Commercial construction contractors, for example, need no license. Finally, consider that the cost of hiring an attorney and fighting this claim, in court, will likely greatly exceed the $1200 still being claimed by this contractor. The chances are very good that you are better off settling this claim.

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Mar 25, 2021

If any part of the project is commercial, then the requirement of licensing does not apply. If they sue you to foreclose the lien, then you can consider both a counterclaim for slander of title (one year statute of limitations) and seek to discharge the lien by asking the court to quiet title (discharge the invalid lien). Your problem (and theirs) is that the amount won't support the assistance of an attorney.

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Jun 24, 2021

In Response to both Attorney Olson and Passenger: The question clearly states its a residential property (e.g. "on my home residence") thus a residential builders license should be required. Further a construction liens allow the collection of attorneys fees for enforcing the lien if successful and many appeals court cases have held that attorneys fees can vastly exceed the underlying claim. I forget if attorneys fees are collectable for defending a lien successfully but I suspect they are.

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Jun 29, 2021

Yes, fees are collectible for the successful defense, but the standard is high. Plus, you typically are required to front the fees on hope of later collection. "The court may allow reasonable attorneys' fees to a lien claimant who is the prevailing party. The court also may allow reasonable attorneys' fees to a prevailing defendant if the court determines the lien claimant's action to enforce a construction lien under this section was vexatious." Odds of winning and getting the lien discharged are high under the Stokes case doctrine. I only made the clarification on residential/commercial because just living there does not mean it is necessarily commercial. I hope they found success.

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Jun 30, 2021

Can I require my own lien waiver in addition to the statutory Michigan lien waiver form. My form gives up more than the right to claim a mechanic's lien.

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Aug 7, 2022

To the original questioner: Why did you agree to $1800 if you thought only $100 for labor was fair? (You KNOW the cost was $600 and you're withholding $1100... math.) To Levelset: So, you KNOW FOR A FACT that Michigan doesn't require you to prove licensure so you don't check (or actually, you probably did but you just don't care) and you go ahead and make your money by doing the lien and then telling the victim to sue? Dick move. (Not that this douchebag questioner is a victim, but he could've been... you didn't know.

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