Construction liens, builders and seller disclosure in Michigan

Under MCL 570.1114, a contractor does not have a right to a construction lien on an owner's interest in a residential structure unless the work was done under a written contract between the owner and the contractor, with any amendments or additions also in writing. The written contract must contain statements about contractor licensing.

The contract must include, in type no smaller than the body of the contract, a statement that a residential builder or residential maintenance and alteration contractor must be licensed under article 24 of the Occupational Code, and similar statements for electricians, plumbing contractors, and mechanical contractors, along with the contractor's license number if a license is required for the work. MCL 570.1302(1) also says the Construction Lien Act is remedial, is liberally construed, and that substantial compliance is sufficient for the validity of liens, so how a court treats a paperwork defect depends on the facts. Subcontractors and suppliers have their own requirements, including notices of furnishing. If you receive a claim of lien and there was no written contract, MCL 570.1118a also gives you a way to challenge attachment by affidavit if you paid.

Authority: MCL 570.1114; MCL 570.1118a; MCL 570.1302. Reviewed Oct. 2026.

A contractor's lien right ends unless a claim of lien is recorded within 90 days after the claimant last furnished labor or material. The claimant must serve a copy within 15 days after recording, and must start a foreclosure action within 1 year after recording the claim of lien. The action must be accompanied by a notice of lis pendens.

MCL 570.1111(1) sets the 90-day recording deadline, measured from the lien claimant's last furnishing of labor or material for the improvement under its contract. A claim of lien is valid only for the real property described in it and located in the county where it is recorded. MCL 570.1111(5) requires service of a copy of the claim of lien, with proof of service of any notice of furnishing, on the designee or owner within 15 days after recording. MCL 570.1117(1) bars enforcement proceedings brought later than 1 year after the claim of lien was recorded, and MCL 570.1117(2) requires recording a lis pendens when the foreclosure action is filed. Everyone with an interest that would be divested must be made a party. Separately, a subcontractor or supplier must serve a notice of furnishing within 20 days after first furnishing labor or material (MCL 570.1109(1)), and a late notice can limit that claimant's lien to the extent the owner paid in reliance on a sworn statement or lien waiver (MCL 570.1109(6)). If a lien has been recorded against your home, calendar the recording date and watch for a lawsuit, because an unenforced lien can expire.

Authority: MCL 570.1111; MCL 570.1117; MCL 570.1109. Reviewed Oct. 2026.

Not necessarily. Under MCL 570.1118a, a claim of lien does not attach to a residential structure to the extent the owner paid the contractor under the contract, if the owner files an affidavit with the court stating the payment and attaches the contract, change orders, and evidence of payment such as canceled checks.

If there is no written contract as required by MCL 570.1114, filing the affidavit creates a rebuttable presumption that the owner paid, and the presumption may be overcome only by clear and convincing evidence to the contrary. Sworn statements also protect owners. Under MCL 570.1110, a contractor must give the owner a sworn statement when payment is due or on demand, listing subcontractors, suppliers, and laborers. The owner may withhold from the contractor amounts due to those people as shown by the sworn statement, or due to claimants who gave notices of furnishing, and may pay them directly. For a residential structure, the owner must also give notice of receipt of a sworn statement to subcontractors, suppliers, and laborers who gave notices of furnishing. Keep every payment record and contract document. Do not make the final payment without a sworn statement and lien waivers, and talk to a lawyer if a lien appears.

Authority: MCL 570.1118a; MCL 570.1110. Reviewed Oct. 2026.

Not any longer. Michigan's homeowner construction lien recovery fund was repealed by 2010 PA 147, and MCL 570.1201 and the related sections now show as repealed. In its place, 2010 PA 147 added MCL 570.1118a, the owner affidavit procedure under which a lien does not attach to a residential structure to the extent the owner has paid the contractor.

Older articles and some contractor materials still refer to the fund, so it is worth knowing it is gone. Without the fund, the owner's protection comes from the Construction Lien Act itself: the written contract requirement in MCL 570.1114, the sworn statement provisions in MCL 570.1110, the owner's ability to withhold amounts from the contractor and pay claimants directly, and the affidavit in MCL 570.1118a. Waivers of lien and careful payment sequencing also matter. If a contractor was unlicensed, MCL 339.2412 bars the contractor from suing for compensation or imposing a lien. If a contractor took money for work not done, other remedies may exist, such as a contract or fraud claim, subject to the limitation periods that apply. A useful start is collecting the contract, payments, texts and emails, any sworn statements, and every notice from subcontractors.

Authority: MCL 570.1201; MCL 570.1118a; MCL 339.2412. Reviewed Oct. 2026.

Usually, for paid work on a house. MCL 339.2401 defines a residential builder and a residential maintenance and alteration contractor, and MCL 339.2403 lists exemptions, including owners working on their own home and a single project with an aggregate contract price under $600. Licensed electrical, plumbing, and mechanical contractors are licensed under other statutes for their own trades.

A residential builder, under MCL 339.2401, is a person who for compensation other than wages for personal labor only builds, repairs, alters, or improves a residential structure, and a maintenance and alteration contractor is one who does repairs, alterations, a garage, or concrete on residential property. Residential structure means a detached one or two family dwelling and its appurtenant facilities, or a townhouse of not more than three stories with a separate means of egress. MCL 339.2403 exempts, among others, an owner working on a structure for the owner's own use and occupancy, an owner maintaining rental property, and a person on one project with an aggregate price under $600, but not if the work is part of a larger operation or split into small contracts to evade the act. A license under MCL 339.2404 requires an examination and lasts 3 years. The contract for work on a residential structure must state licensing information and the license number if one is required, because MCL 570.1114 requires that for a contractor to have a lien. The license number should be requested first and checked to confirm it covers the work.

Authority: MCL 339.2401; MCL 339.2403; MCL 339.2404; MCL 570.1114. Reviewed Oct. 2026.

No, if a license was required. MCL 339.2412 bars a residential builder or residential maintenance and alteration contractor from bringing or maintaining a court action to collect compensation without alleging and proving licensure during the work. Subsection (3) also bars imposing a lien on real property unless licensed during the work.

The Michigan Supreme Court read this statute in Epps v 4 Quarters Restoration as a bar to the builder's claims, including counterclaims and cross-claims, to collect compensation. It does not prevent an unlicensed builder from defending against a homeowner's claim. The statute also lets a prosecuting attorney or the Attorney General seek a civil fine of $5,000 to $25,000 against an unlicensed person who has violated MCL 339.601(1) or (2), aside from damages or restitution. In practice, the licensure question is one of the first things to check in a contractor dispute, along with the written contract, the work performed, and the payments made. If a lien has been recorded by an unlicensed contractor, MCL 339.2412(3) can be raised in seeking to discharge it.

Authority: MCL 339.2412; Epps v 4 Quarters Restoration LLC, 498 Mich 518 (2015). Reviewed Oct. 2026.

Usually not, if the work required a residential builder or residential maintenance and alteration contractor license. MCL 339.2412(1) bars an unlicensed person from bringing an action to collect compensation for work that required a license. In Stokes v Millen Roofing, the Michigan Supreme Court refused to let an unlicensed roofer use equity to get around the statute. The bar does not stop an unlicensed builder from defending a homeowner's lawsuit (Epps).

MCL 339.2412(1) says that a person, or the qualifying officer or member of a residential builder or residential maintenance and alteration contractor, shall not bring or maintain a court action to collect compensation for an act or contract for which a license is required unless he or she alleges and proves being licensed during the performance. Subsection (3) bars a lien on real property for an unlicensed person.

In Stokes, an unlicensed roofer filed a lien and counterclaimed for breach of contract and quantum meruit after the homeowners refused to pay. The trial court granted equitable relief. The Supreme Court reversed, held the lien invalid and the statute a bar to the roofer's claim for compensation under the contract, and said courts must be careful not to usurp the Legislature's role under the guise of equity. The practical result is that calling the claim unjust enrichment or quantum meruit does not avoid the statute.

Two limits matter. First, whether a license was required for your particular work is a separate question under the licensing article, and this answer does not address it. Second, Epps held the statute bars an unlicensed builder from bringing an action for compensation, not from defending an action a homeowner brings. The statute also lets prosecutors and the attorney general seek civil fines under subsection (4) of $5,000 to $25,000 against an unlicensed person who violated section 601(1) or (2).

If you were paid in part, or were licensed during only part of the work, bring the dates and your license record.

Authority: MCL 339.2412; Stokes v Millen Roofing Co, 466 Mich 660, 671-672 (2002); Epps v 4 Quarters Restoration LLC, 498 Mich 518, 530-531 (2015). Reviewed Oct. 27, 2026.

Not under that statute alone. In Epps v 4 Quarters Restoration, the Michigan Supreme Court held that MCL 339.2412(1) does not create a private cause of action for a homeowner against an unlicensed builder. It also held that a contract between an innocent homeowner and an unlicensed builder is voidable by the homeowner rather than void, so the contract is not automatically a nullity.

The Court said the statute imposes a burden on the unlicensed builder by restricting the builder's lawsuits to collect compensation, and its express enforcement mechanism is the civil action by a prosecutor or the Attorney General. The Court also held that the statute does not stop an unlicensed builder from defending on the merits against a homeowner's claim to recover sums already paid. That means a homeowner who sues for a refund must usually rely on other theories, such as breach of contract, negligence, fraud, or a statutory consumer claim, and must prove them. Limitation periods vary, including 6 years for most contract claims under MCL 600.5807(9) and 3 years for injury to property under MCL 600.5805(2). Licensing status remains important evidence and can stop the builder's own claim for payment. Useful documents include the contract, proof of payment, photographs, and any inspection reports, gathered before deciding how to frame the claim.

Authority: Epps v 4 Quarters Restoration LLC, 498 Mich 518 (2015); MCL 339.2412; MCL 600.5807; MCL 600.5805. Reviewed Oct. 2026.

For residential property with 1 to 4 dwelling units, the seller must deliver a written seller's disclosure statement before signing a binding purchase agreement. The Seller Disclosure Act, MCL 565.951 and following, covers sales, installment land contracts, and lease-options. The seller completes a standard form that reports conditions the seller actually knows about.

MCL 565.952 applies the disclosure requirements to transfers of real estate with not less than 1 or more than 4 residential dwelling units, whether by sale, exchange, installment land contract, lease with an option to purchase, or other option to purchase. MCL 565.954(1) requires delivery to the buyer or the buyer's agent before the seller executes a binding purchase agreement, or, for an installment contract with no purchase agreement, before the contract is signed. The form in MCL 565.957 says the statement is not a warranty and is not a substitute for inspections, and that the information is a disclosure only and not part of the contract. It also warns that failing to give a purchaser a signed statement lets the purchaser terminate an otherwise binding purchase agreement. The act lists exempt transfers in MCL 565.953, such as court-ordered transfers and foreclosure transfers. A seller is not liable for an error or omission in the statement that was not within the seller's personal knowledge (MCL 565.955(1)), and the Court of Appeals held in Roberts v Saffell that innocent misrepresentation is not a theory of liability under the act. A seller who knew of a problem and did not disclose it honestly can still face a fraud claim. Read the form carefully and order your own inspections.

Authority: MCL 565.952; MCL 565.954; Roberts v Saffell, 280 Mich App 397 (2008), aff'd 483 Mich 1089 (2009); MCL 565.953; MCL 565.957; MCL 565.955. Reviewed Oct. 2026.

Under MCL 565.954(3), if the disclosure or an amendment is delivered after a binding purchase agreement is signed, the buyer may terminate the agreement by written notice delivered within 72 hours after the statement was delivered in person, or within 120 hours after it was delivered by registered mail. The right to terminate ends when the property is transferred.

The deadlines are short and are measured from delivery of the statement, not from when you read it. The statute gives windows only for in-person delivery and delivery by registered mail and does not say what applies to other methods such as email, so treating 72 hours as the deadline is the safe course. The notice of termination must be in writing and delivered to the seller or the seller's agent. Under MCL 565.954(4), the right to terminate expires on the transfer of the property by deed or installment sales contract, so a buyer who closes loses the termination right. The statute covers late disclosures and late amendments. A statement delivered before the binding agreement does not trigger a termination window. If no statement is ever delivered, the form in MCL 565.957 warns that the purchaser may terminate an otherwise binding agreement, but the written windows above apply once a statement or amendment arrives late. If you get a statement or an amendment after signing, mark the delivery date and time, and talk to a lawyer the same day before the window closes.

Authority: MCL 565.954. Reviewed Oct. 2026.

Not automatically. MCL 565.955(1) says a seller is not liable for an error, inaccuracy, or omission that was not within the seller's personal knowledge, and a seller does not violate the act by failing to disclose what could be learned only by inspecting inaccessible areas or by someone with specialized training. If the seller knew and answered falsely, fraud claims may be available.

The act requires disclosures to be made in good faith, which MCL 565.960 defines as honesty in fact in the conduct of the transaction. In Roberts v Saffell, the Court of Appeals held that a claim for innocent misrepresentation is not viable under the act, because a seller is not liable for errors outside personal knowledge, and the Supreme Court affirmed in 2009. Roberts also explains that Michigan recognizes common-law fraud and silent fraud as exceptions to the common-law rule of caveat emptor. So the key facts are what the seller actually knew, when the seller learned it, and what the seller said or did. Repair invoices, earlier inspection reports, neighbor statements, text messages with the listing agent, and photographs of past water damage can all matter. Keep the statement, the inspection report, and the damage photographs, and document the repair estimates.

Authority: MCL 565.955; MCL 565.960; Roberts v Saffell, 280 Mich App 397 (2008), aff'd 483 Mich 1089 (2009). Reviewed Oct. 2026.

No. Caveat emptor is the common-law rule for real estate sales, but Michigan recognizes exceptions. The Court of Appeals in Roberts v Saffell identified common-law fraud, silent fraud, and, outside the Seller Disclosure Act context, innocent misrepresentation as exceptions to caveat emptor in real estate transactions.

Roberts explains that at common law a land vendor who gives up title, possession, and control shifts responsibility for the land's condition to the buyer. The court noted two exceptions in negligence cases from Christy v Prestige Builders: a duty to disclose a concealed condition known to the seller that involves an unreasonable danger, and liability to those outside the land for a dangerous condition until the buyer discovers it. Beyond those, fraud theories apply. Each fraud theory has its own elements, including a false representation, and the buyer must prove them. Fraud claims are generally subject to the 6-year period in MCL 600.5813, and MCL 600.5855 gives 2 years from the date the claim was or should have been discovered when a liable person fraudulently concealed the claim. A buyer's own inspection and what the buyer knew or could have seen affect these cases. Keep everything from the transaction file.

Authority: Roberts v Saffell, 280 Mich App 397 (2008), aff'd 483 Mich 1089 (2009); MCL 600.5813; MCL 600.5855. Reviewed Oct. 2026.