Many construction contracts are entered into for improvements to property not owned by the party seeking the construction services. While lessees who contract for improvements to the leasehold have many reasons for doing so, most do so for their own profitable use of the property. Michigan treats a lessee as though it is an owner when dealing with any subsequent liens.
When a lessee contracts for improvements to real property, a construction lien attaches to the lessee’s entire interest. If the lessee acquires additional interests in the real property after the construction lien is filed, the lien will attach to the additional real property interests. Therefore, if a tenant in a strip mall contracts for improvements to its store, any liens that are filed attach to that tenant’s leasehold interest in the strip mall. If the tenant acquires additional space at the mall, the construction lien will attach to this expanded interest, since it is covered by the same legal description. This expansion of the lien attachment continues should the tenant later purchase the entire strip mall.
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