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Michigan Claim of Lien - Corporation or LLC

Lien Of Claim Meaning

Category:

Liens - Construction - Mechanics

State:

Michigan

Control #:

MI-07A-09

Format:

Instant download

Description

Within ninety (90) days after a corporate or LLC lien claimant's last furnishing of labor or material for the improvement pursuant to the lien claimant's contract, a Claim of Lien must be recorded in the office of the register of deeds for each county where the real property to which the improvement was made is located.

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FAQ

Liens and claims refer to the rights that creditors have to take possession of a debtor's property until a financial obligation is met. The meaning of liens and claims is vital in the legal and financial landscape as it protects lenders' interests. To navigate this landscape effectively, platforms like USLegalForms can provide vital resources and documentation tailored to your needs.

Another term for liens is security interests. When someone holds a lien on a property, they possess a legal right to keep possession until a debt owed by the property owner is satisfied. This is crucial for understanding the lien of claim meaning, as it illustrates the necessity of securing a debt against property.

In simple terms, a lien is a legal right that allows a lender to take possession of a debtor's property if they don’t fulfill their payment obligations. It serves as a form of security for the lender, ensuring they can recoup losses. Understanding the lien of claim meaning can help both lenders and borrowers understand their responsibilities and protect their interests.

Another word for lien is 'claim'. This term captures the essence of what a lien entails, as it signifies a right or legal interest that one party has in the property of another. Grasping the lien of claim meaning is essential for comprehending your rights regarding property and debts.

A lien is a legal right or interest that a lender has in another person’s property, granted until the obligation owed by that person is satisfied. It serves as a security for a debt, ensuring the lender can claim ownership if the debt remains unpaid. Grasping the lien of claim meaning is crucial for protecting your assets and understanding your financial obligations. This knowledge empowers you to manage your financial affairs more successfully.

To remove a lien on your account, you typically need to satisfy the debt that caused the lien. This might involve paying the owed amount or negotiating a settlement with the creditor. After the payment, obtain a lien release form, which establishes that the lien is lifted. Knowing the lien of claim meaning is vital, as it informs you of your rights and the process for lien removal.

A lien release form is an official document that indicates a lien has been satisfied and the lienholder relinquishes their claim on the property. Once this form is filed, it clears the title, allowing property owners to sell or transfer ownership without hindrance. Understanding the lien of claim meaning can assist you in necessary processes like lien releases, ensuring you manage your property rights effectively.

Legally, a lien refers to a right that one party has to possess an asset belonging to another party until an outstanding obligation is fulfilled. It acts as a formal way to enforce debt repayment, often involving real estate or other significant assets. By exploring the lien of claim meaning, you grasp the importance of these legal claims in financial arrangements.

When we say a lien exists, it means that there is a valid legal claim on the property or asset in question, indicating that the property serves as collateral for a debt. This can affect the property’s title and the owner's ability to sell or transfer it until the debt is settled. Thus, understanding the lien of claim meaning is critical for anyone dealing with secured transactions.

A lien is a legal claim against an asset that allows the lienholder to retain possession of the asset until a debt is repaid. The lien serves as a security measure, ensuring that creditors have a way to recover funds owed to them. Grasping the lien of claim meaning is essential for both creditors and debtors in maintaining clear financial relations.

Interesting Questions

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Claim of Lien - Corporation or LLC

Note: This summary is not intended to be an all-inclusive discussion of Michigan's construction or mechanic's lien laws, but does include basic provisions.

What is a construction or mechanic's lien?

Every state permits a person who supplies labor or materials for a construction project to claim a lien against the improved property. While some states differ in their definition of improvements and some states limit lien claims to buildings or structures, most permit the filing of a document with the local court that puts parties interested in the property on notice that the party asserting the lien has a claim. States differ widely in the method and time within which a party may act on their lien. Also varying widely are the requirements of written notices between property owners, contractors, subcontractors and laborers, and in some cases lending institutions. As a general rule, these statutes serve to prevent unpleasant surprises by compelling parties who wish to assert their legal rights to put all parties who might be interested in the property on notice of a claim or the possibility of a claim. This by no means constitutes a complete discussion of construction lien law and should not be interpreted as such. Parties seeking to know more about construction laws in their state should always consult their state statutes directly.

Who can file a lien in this state?

Michigan law permits any contractor, subcontractor, supplier, or laborer, who provides an improvement to real property to claim a lien. The value of the lien may not exceed the amount of the claimant's contract less payments made on the contract. M.S.A. Â§ 570.1107.

How long does a party have to file a lien?

A contractor, subcontractor, laborer, or supplier, must file a Claim of Lien form in the register of deeds office within ninety (90) days after the lien claimant's last furnishing of labor or material. M.S.A. Â§ 570.1111.

By what method is a lien filed in this state?

Michigan statutes provide a form with which a lien claimant may record a Claim of Lien in M.S.A. Â§ 570.1111. The required form sets out names or interested parties as well as the labor or material provided and the amount due and owed. Proof of service of a Notice of Furnishing is required to be attached to a lien claim filed by a subcontractor, supplier, or laborer. M.S.A. Â§ 570.1111

How long is a lien good for?

Proceedings for the enforcement of a construction lien may not be brought later than one (1) year after the date the claim of lien was recorded. M.S.A. Â§ 570.1117

Are liens assignable?

Yes. A lien may be assigned to another party who shall have the same power to enforce the lien and shall be subject to the same obligations. M.S.A. Â§ 570.1125.

Does this state require or provide for a notice from subcontractors and laborers to property owners?

Yes. Michigan law requires a subcontractor or supplier who provides improvements to real property to issue a Notice of Furnishing to the designee and the general contractor, if any, named in the Notice of Commencement. Service must be made by personal delivery or certified mail within twenty (20) days after furnishing the first labor or material. While failure to file a Notice of Furnishing timely does not defeat a lien claimant's right to a lien, it may affect a lien claimant's right to pursue payment for work done prior to the filing of the notice. The form used must be substantially similar to the one set out in M.S.A. Â§ 570.1109.

Also, a lien claimant must provide to the property owner who requests in writing, a statement of the amount of labor and material furnished to the date of the statement, any amount remaining due, and the contractual work remaining to be done. (Please see MI-13-09, MI-15-09). M.S.A. Â§ 570.1113(2).

Does this state require or provide for a notice from the property owner to the contractor, subcontractor, or laborers?

Yes. Michigan law requires a property owner to provide a copy of the contract between the contractor and the owner, as well as a statement of the amount due and unpaid on that contract to any lien claimant who makes a written request for same. (Please see MI-12-09, MI-14-09). M.S.A. Â§ 570.1113(1).

Does this state require a notice prior to starting work, or after work has been completed?

Yes. Michigan law requires the property owner to record a Notice of Commencement in the office of the register of deeds prior to the commencement of any actual physical improvements to real property. The Notice must be posted in a conspicuous place on the property. Any party with an interest in the property may request that the owner, contractor, or subcontractor, provide them with a copy of the Notice. Failure to do so will result in the party failing to honor the request being held liable for any damages that result from the failure. Failing to record the Notice as required will extend the time under which individual lien claimants can file their Notice of Furnishing. Please note that these requirements do not apply to improvements to a residential structure. M.S.A. Â§ 570.1108.

An owner of a residential structure being improved need only supply a Notice of Commencement if a contractor, subcontractor, supplier, or laborer has made a written request. Michigan law sets out the form that must be used in M.S.A. Â§ 570.1108a.

Every Notice of Commencement should have a blank Notice of Furnishing attached. M.S.A. Â§ 570.1108a.

At the completion of work, when payment is due, the contractor is required to provide the owner with a Sworn statement which details the parties who worked on the project and how much they are still owed. Michigan statutes require the sworn statement to be substantially in the same form as provided in M.S.A. Â§ 570.1110. The property owner, after receiving the sworn statement, may withhold on his own initiative, or at the request of the contractor, an amount sufficient to pay all sums which are due to subcontractors, suppliers, or laborers. A contractor is not entitled to any payment or to file a suit to enforce his lien until the statement is filed. M.S.A. Â§ 570.1110(6)-(8).

Does this state permit a person with an interest in property to deny responsibility for improvements?

No. Michigan does not appear to have a Notice of Non Responsibility provision as in some other states.

Is a notice attesting to the satisfaction of a lien provided for or required?

Yes. Michigan statutes contain several versions of a waiver form. These forms are used by a contractor and delivered to the property owner as payments on the construction project are received, and in that way act as a receipt of payment. There are four waiver forms provided: Partial Unconditional, Partial Conditional, Full Unconditional, Full Conditional. All forms permit a contractor to attest in writing that either part or all of a contractor's lien claim is being waived. Further, the contractor can use the partial forms to only release part of his claim in response to a partial payment and may use the conditional forms to only waive part or all of a claim conditional upon a payment being made. M.S.A. Â§ 570.1115.

By what method does the law of this state permit the release of a lien?

Michigan statutes state that when any claim of lien has been fully paid, the lien claimant shall deliver to the owner or his representative a certificate, witnessed and acknowledged in the same manner as a discharge of mortgage, that the claim has been paid and is now discharged. M.S.A. Â§ 570.1127(1).

Also, if the time within which to enforce a lien has elapsed, any party with an interest in the property may make an affidavit to the county clerk attesting to the fact that time has elapsed. If the affidavit is on order, the clerk should issue a certificate to that effect that may be recorded rendering the lien ineffective. M.S.A. Â§ 570.1128.

Does this state permit the use of a bond to release a lien?

Yes. Michigan statutes permit a lien to be vacated and discharged if a bond in the amount of twice the lien amount is filed with the county clerk and a copy provided to the lien claimant. The bond may be either in cash or surety form. M.S.A. Â§ 570.1116.