Construction Lien Act

Question 1

Construction Lien Act

Answer 1

An ACT to establish, protect, and enforce by lien the rights of persons
performing labor or providing material or equipment for the
improvement of real property; to provide for defenses to construction
liens; to provide remedies and prescribe penalties; and to repeal acts
and parts of acts

Question 2

Is there a construction lien fund?

Answer 2

No

Question 3

A Construction lien can be placed on…

Answer 3

residential and commercial property

Question 4

Who can place liens on properties?

Answer 4

General Contractors, Sub-Contractors, Laborers, and Suppliers can place Liens on properties.

Question 5

What must be in place for a project to be lienable?

Answer 5

There must be a written contract in place by a Contractor for the lienable project.

Question 6

Is a contractor required to be licensed for a lien?

Answer 6

The Contractor must be licensed if required to be so by the state licensing laws. Some trades, Laborers & Suppliers are not required to be licensed.

Question 7

What is the maximum amount a lien can be?

Answer 7

Liens cannot exceed the allowed contract dollar amount or limitations.

Question 8

State approved lien documents that must be used during the lien process:

Answer 8

i. Notice of Commencement
ii. Notice of furnishing
iii. Proof of notice of furnishing
iv. Sworn statement
v. Waivers
vi. Claim of lien
vii. Proof of service for claim of lien
viii. Discharge of claim of lien

Question 9

Notice of Commencement must be supplied when?

Answer 9

Supplied by owner, General Contractor, Sub-Contractor, or Supplier within 10 days of being asked for a copy by anyone entitled to a copy.

Question 10

What must be attached to notice of commencement?

Answer 10

A blank notice of furnishing must be attached to the notice of commencement.

Question 11

What format must notice of commencement follow?

Answer 11

c. Must follow printed format as shown in the construction lien act.

Question 12

What does notice of commencement indicate?

Answer 12

A. Indicates legal property description.
B. Indicates owners name & address.
C. Indicates General Contractors name & address.

Question 13

Notice of Furnishing:

Answer 13

Provides proof that a Contractor, Sub-Contractor, Laborer or Supplier has provided labor and or materials to a project.

Question 14

What does Notice of Furnishing indicate?

Answer 14

A. Indicates owners name and information.

B. Indicates General Contractors name and information

C. Indicates the name and information of the Contractor, Laborer or Supplier who has provided labor and or materials for a project.

D. Indicates what was provided for the project

Question 15

What does a Notice of Furnishing provide?

Answer 15

Provides the project site legal description

Question 16

When must Notice of Furnishing be submitted?

Answer 16

A. Contractors and Suppliers summit form within 20 days of
providing goods and services.
B. Laborers summit form within 30 days after wages are due.

Question 17

Proof of Service of Notice of Furnishing:

Answer 17

Indicates a notarized form that verifies that a notice of furnishing was mailed or hand delivered to the responsible party.

Question 18

What does proof of Service of Furnishing help?

Answer 18

to establish lien rights

Question 19

What must a copy of Proof of Service of Notice of Furnishing be attached to?

Answer 19

A copy must be attached to a claim of lien

Question 20

Sworn Statement:

Answer 20

An official notarized list of individuals who have provided labor and or materials to a project who are owed money.

Question 21

When shall Sworn Statement be provided and to whom?

Answer 21

A copy must be given to a party who has a right to a copy within 10 days of request.

Usually provided with a payment request

Question 22

False statements on Sworn Statement:

Answer 22

False statements are subject to fines & penalties including imprisonment.

Question 23

What does a waiver do?

Answer 23

Becomes a receipt for payment in reference to labor and or materials

Question 24

Types of waiver:

Answer 24

A. Full unconditional waiver: indicates full payment received and there is no claim of lien.

B. Full conditional waiver: indicates that as soon as full payment or some condition is met, there will be no claim of lien.

C. Partial unconditional waiver: indicates a receipt for partial payment of a stated contract in which the work is on-going.

Question 25

Claim of Lien:

Answer 25

Places a “hold” on the legal description of the property at the county register of deeds office.

Question 26

When must a Claim of Lien be filed?

Answer 26

Must be filed within 90 days of furnishing labor or materials for a project.

Question 27

What must be attached to Claim of Lien?

Answer 27

Attach any & all copies of proof of service of a notice of furnishing.

Question 28

Proof of service of a claim of lien:

Answer 28

Proves that the responsible party or parties have been notified by mail or in person

Question 29

When should proof of service of claim of lien be presented?

Answer 29

Must present a copy of claim of lien to the responsible party or parties within 15 days

Question 30

When must Foreclosure commence?

Answer 30

Proceedings to foreclose must take place within 1 year of the date the claim lien was recorded

Question 31

Who has jurisdiction of foreclosure?

Answer 31

The circuit court of the recorded county will have jurisdiction

Question 32

Foreclosure Redemption period?

Answer 32

Redemption periods shall not exceed 4 months.

Question 33

Failure to comply to Foreclosure within X amount of time will void all lien rights.

Answer 33

Failure to comply within the 1 year will void all lien rights.

Question 34

When must discharge of lien be delivered and how?

Answer 34

As soon as possible by certified mail.