Liens, Acts, Business Entities Flashcards
What is the purpose of filing a lien under the Construction Lien Act?
To secure payment on a property when contractors, subs, laborers, or suppliers aren’t paid, even if the owner already paid the general contractor.
What are the basic steps and documents required to file a lien?
1) Notice of Commencement, 2) Notice of Furnishing, 3) Proof of Notice of Furnishing, 4) Sworn Statement, 5) Waivers, 6) Claim of Lien, 7) Proof of Service of Claim of Lien.
It must be submitted within 10 days if requested, posted at the job site, and notarized.
What must be done with the Notice of Commencement?
It indicates partial payment has been made, but there are still outstanding payments.
What is a Partial Unconditional Waiver?
It signifies that payment has been made in full, and no further liens will be filed.
What is a Full Unconditional Waiver?
How long does a contractor have to file a claim of lien after completing work?
90 days from the last date of furnishing labor or materials.
What are some specific requirements under Michigan’s building code?
Single building code since 1987, stair rise/run of 8.25/9, and smoke and carbon monoxide detector requirements based on construction year.
Sales of goods or services over $25 to homeowners, allowing a 3-day cancellation period
What does the Home Solicitation Sales Act regulate?
What are the advantages of a Sole Proprietorship?
Easy to establish, minimal government regulations, and owner has control over profit usage.
What is the main tax difference between a Corporation and an S Corporation?
Corporations pay corporate taxes, whereas S Corporations are taxed like partnerships (income taxed at individual level).
What are the working hour restrictions for 14 and 15-year-olds?
They cannot work more than 48 hours a week, 6 days a week, or between 9 pm and 7 am.
What is the minimum number of employees for the ADA to apply to an employer?
15 employees, with requirements for reasonable accommodations.
How long must employers retain I-9 forms?
At least 3 years after hire date or 1 year after employment ends, whichever is later.
Construction Lien Act Basics
Lien Purpose: Allows property liens when unpaid for work, even if the owner paid the GC but the subcontractor wasn’t paid.
Eligibility: Liens apply to licensed GCs, subcontractors, laborers, and suppliers on both residential and commercial properties.
Contract Requirement: Written contract is mandatory for lien eligibility.
Filed within 10 days of request.
Identifies GC, subs, and job location.
Must be posted on-site near the permit.
Notice of Commencement:
Contractors: file within 20 days of providing services.
Laborers: file within 30 days of wages due.
Notice of Furnishing
Notify all parties within 15 days of filing lien claim
Proof of Service
What type of homes only need foundation inspections if pre-inspected.
Manufactured homes
Business Registration Steps
Verify name availability.
Obtain EIN.
File Articles of Incorporation or LLC documents.
Obtain builder’s license if necessary.
Open business bank account.
Lien & Legal Procedures
Initial Lien Documents: Notice of Commencement, Notice of Furnishing, and Proof of Furnishing.
Waivers: Used to indicate partial or full payment received.
Filing Deadlines:
Submit lien statement within 90 days of job completion.
Notify owner of lien within 15 days by certified mail.
Discharge of Lien: File ASAP after payment.
Used on high-end jobs to cover the time needed to put together a comprehensive bid.
Pre-Construction Agreement
According to the sample contract on page 27, when is the full payment of a change order due?
upon agreement and signing of the change order
What should a quality contract contain?
name and location of the project
drawings and specifications identified as “Project Number”
insurance requirements for owner and contractor
To protect yourself from potentially costly changes, what should you include in any contract to build a new house?
“per project number, last revised on,” then list specific page numbers and revision dates.
