In Michigan, all construction lien interests from projects are grouped together for priority, and the group’s priority is the date of the “first actual physical improvement”
OR,
when a notice is recorded.
Mortgages that are perfected (recorded) beforehand take priority over lien claims; those perfected after first improvement are subordinate to the liens. Therefore, the date which the first improvement occurred can make the difference between liens that have value and those that may be worth nothing because of previously perfected mortgage interests. An earlier mortgage filing often leaves remaining proceeds unavailable to lower-priority claimants. So, if you are a lender, make sure no activity could be deemed “actual physical improvement” before recording the mortgage.
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