Michigan Construction Liens Now Available to Architects, Surveyors, or Engineers
A Michigan construction lien is a powerful tool. It allows a lien to be placed upon a project. This lien can be foreclosed upon by a lawsuit filed within one year of lien. If successful, the lienholder can force the property to be sold to pay for the lien and also recover attorney fees—quite the powerful remedy! The lien also often has the practical effect of inhibiting or delaying financing for a project.
To date, a Michigan construction lien has only been available to those who perform an actual physical improvement to the property. The lien’s availability is limited to a “contractor, subcontractor, supplier, or laborer.” MCL 570.1107(3). Those individuals or companies must provide actual physical improvement, which is defined as “actual physical change in, or alteration of, real property as a result of labor provided, pursuant to a contract, by a contractor, subcontractor, or laborer which is readily visible and of a kind that would alert a person upon reasonable inspection of the existence of an improvement.” MCL 570.1103(1). The act specifically excluded liens arising from “surveying, soil boring and testing, architectural or engineering planning, or the preparation of other plans or drawings of any kind or nature.” MCL 570.1103(1). Thus, surveyors, engineers and architects could not place valid liens on projects under the current version of the Michigan Construction Lien Act.
A new law passed on December 12, 2018 changed the text of the Michigan Construction Lien Act to specifically allow surveyors, engineers, and architects to place liens. As summarized by the House Fiscal Agency (while it was still a senate bill):
Senate Bill 465 would establish a construction lien for design professionals whose professional services related to the improvement of the property are often provided during the planning stages of a project, and whose work and services might e rendered in full before there is any actual physical improvement to the property at all.
Design professional would mean a licensed or registered architect, professional engineer, or professional surveyor or a corporation, partnership, or other legal entity that is authorized under the Occupational Code to engage in the practice of any of those professions.
Professional services would mean services customarily performed by or under the supervision of a design professional, such as, for instance, planning, programming, design, preparation of drawings and specifications, site investigation, surveying, and construction administration services.
As with workers who provide actual physical improvement, there are requirements for notice and other deadlines under the Act. These requirement must be followed if the professional wishes to place and enforce a lien.
If you are a construction company seeking to place a lien, or an owner seeking to defend a lien, please contact me with your questions.