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  • Writer's pictureYasmin Whitmer

Can the subcontractor file a lien if not paid?

What if a property owner has paid the amount owed on the contract but the subcontractor has NOT been paid, may the subcontractor file a lien?

No, actually.

There is an interesting case in Michigan: DLF Trucking, Inc v Bach, 268 Mich App 306. In this case, the subcontractor filed a construction lien when they became worried a general contractor would not pay the remaining balance for the work performed. On the same day, sneakily, the contractor gave the mortgage company a waiver of lien, which states the subcontractor was paid and waived lien rights on the property. However, the waiver was forged from a previous waiver of lien executed by the same subcontractor.

Relying on the forged waiver, the mortgage company disbursed its final draw to the contractor on behalf of the owners. When the subcontractor sought to enforce its lien, the court found that because the owners had met Michigan’s statutory requirements for liens, including filing an affidavit of full payment, the subcontractor’s construction lien didn’t attach.

This is a legal mechanism is for protection of both the property owner and lien claimants. The subcontractor's action is not with the owner, but with the general contractor.

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