By Ben Hammond
Thinking of recording your own construction lien? If so, make sure you consider the following five tips that go beyond the basics you may have learned in the past.
1. Double check the legal description. More and more individuals are recording documents without professional assistance, and frequently legal descriptions are inadvertently miscopied from one document to another. The legal description will rule the day and recording a lien on another’s property without a legal right could be considered a slander on that other person’s title. Follow these tips to keep you out of hot water:
- Avoid abbreviations. Several register of deeds offices throughout the state, but not all, require that the legal description be “spelled out” instead of using abbreviations. In legal descriptions there are significant differences between “west” and “westerly,” for example. If you were to shorten one or the other to “W” in a legal description, it may not accurately describe the property.
- Be careful copying. You may need to re-type the legal description so that it can be attached in the proper form to your lien. Always double check the description when you do this to make sure it was accurately transposed.
- Watch out for tax descriptions and parcel numbers. Tax descriptions and parcel numbers are NOT the same thing as a legal description and should not be relied upon in your lien.
- Don’t strictly rely on the NOC. While the notice of commencement may be the best place to start your search for the proper legal description, you should not assume that you can strictly rely on that description when recording your lien in every circumstance. For example, what if the notice of commencement contained an inaccurate legal description? What if you provide improvements to property in addition to or beyond what is legally described? If you find yourself in these or similar situations, you should consult a construction lawyer to explore your rights and options. Any time the scope of your project expands to another property you should ensure that you have the correct legal description in case you need to record a lien later on.
2. Make sure the lien is in “recordable form”. Ever wonder what this phrase means? It simply refers to technical compliance with a list of rules. These rules are identified in Michigan statute MCL 565.201, are typically listed on the website for each county register of deeds, and require the following:
- Signatures must be original and names must be typed, stamped or printed beneath all written signatures.
- No discrepancy can exist between names printed in the notary acknowledgment and as printed beneath signatures.
- The name and address of the person who drafted the document must appear on document.
- The document must be notarized.
- The document must be legible.
- The document must have a margin of unprinted space at least 2 ½ inches at the top of the first page and at least ½ inch on all remaining sides of each page.
- The document must have a title on the first line on the first page, which is typically “Claim of Lien”.
- The document must be printed with black ink in at least 10-point font.
- The paper on which the document is printed must be white and not less than 20-pound weight.
- The size of the document and any attachments must be at least 8 ½ inches by 11 inches; at most 8 ½ inches by 14 inches.
3. Don’t wait until the last minute. While you have 90 days to record your lien, what happens if you send it in on the 87th day, only to have it rejected and returned on the 91st day? Do you get a pass because you tried in good faith to get it right before the deadline and got tripped up by a technicality like one outlined above? Generally speaking the answer is no. The Michigan Construction Lien Act requires “strict compliance” when it comes to the deadline to record a lien.
4. Attach a copy of the proof of service of your notice of furnishing. If you are required by the Michigan Construction Lien Act to serve a notice of furnishing (i.e., you do not have a contract directly with the owner), you will need to attach a copy of the “proof” that you served the notice of furnishing on the appropriate parties called a “proof of service”. The lien should reference the fact that you are attaching the proof of service of the notice of furnishing so that it doesn’t get lost in the shuffle.
5. Send in the correct amount of money for the recording fee. While this may sound simple, the fee to record a lien depends on how many pages are included in your lien and where the lien is filed. You will need to count the pages of the particular lien you are recording as it may not be the same number of pages in every lien you record. For example, a lien could include more pages if it attached a proof of service of a notice of furnishing or if it attached a long legal description.
In most counties in Michigan, the fee is $14.00 for the first page and $3.00 for each additional page. However, the Michigan statute allows individual counties to pass ordinances increasing the filing fees in that particular county. For example, the filing fee in Wayne County is $15.00 for the first page and $3.00 for each additional page. Be sure to double check the fees required in the county where you will be recording your lien (which, by the way, should be the county where the project is located) .
Since your lien could be returned if you do not submit the correct fee amount, it is important to properly calculate the fee. This is particularly true when you are near the end of your 90 days to record the lien.
Samples of all of the lien forms you will need are on our website, hilgerhammond.com, and do not hesitate to give us a call if you need any help along the way.