Michigan lien waiver requirements

Rules that change the workflow

1. Michigan regulates both timing and form

Section 115(1) prevents a person from requiring advance waiver of construction-lien rights as part of an improvement contract before work is performed. A contract-stage waiver is contrary to public policy and invalid except for labor and material already furnished and actually paid. A promissory note or other evidence of debt does not by itself waive lien rights.

This is not merely a prohibition on signing too early. The form’s scope must remain tied to furnished work. A future through date, a blanket contract clause, or a full form used before the contract facts stated in that form exist creates a different problem from coordinating a conditional signature with an imminent payment.

2. Four forms, with different data

Section 115(9) prescribes these forms:

1. Partial unconditional — subsection (9)(a): other contracting party, work, property, amount received/released, through date, and the claimant’s does/does-not election.
2. Partial conditional — subsection (9)(b): the same data and election, plus the condition that the amount shown above actually be paid.
3. Full unconditional — subsection (9)(c): other contracting party, work, property, full-payment recital, and complete release. The prescribed form has no amount or through date.
4. Full conditional — subsection (9)(d): the full form plus a condition on actual payment of a stated amount. It has no through date.

Every form includes the residential authenticity paragraph, claimant execution, signing date, address, telephone, and the warning DO NOT SIGN BLANK OR INCOMPLETE FORMS. RETAIN A COPY. The statutory pages contain no printed-name or title field and no witness, jurat, or notarial acknowledgment for an ordinary §115 waiver.

3. Payment determines more than the label

• A claimant receiving full contract payment shall provide a full unconditional waiver. Section 115 gives no separate number of days.
• After partial payment, the claimant shall provide a partial unconditional for the amount received if the owner, lessee, or designee requests it.
• A partial or full conditional waiver becomes effective upon payment of the amount indicated.
• Separately, §115(6) makes a waiver effective when someone makes payment relying on it unless that payer had written notice, when paying, that the waiver’s consideration had failed.
• Retainage dependent on an additional contractual event is not due merely because the improvement was furnished.

A defensible product record therefore separates execution, tender, claimant receipt/settlement, exact amount, reversal or dishonor, payer reliance, and written notice of failed consideration. A signed status alone answers only the first question.

4. Signature, electronic execution, authenticity, and agency

The §115 form calls for the lien claimant’s signature, date, address, and telephone but no notary or witness. Michigan UETA applies by party agreement, prevents denial of effect solely because a record or signature is electronic, requires retainable delivery and legally required formatting, and attributes an electronic signature when it is the person’s act. That supports an e-sign process; it does not excuse an incomplete prescribed form or decide signer authority.

For a statutory residential structure—an owner-occupied or intended-owner-occupied condominium unit or building with no more than two residential units—the recipient cannot rely on a waiver delivered by someone other than the named claimant in the circumstances stated in §115(7) until the recipient verifies authenticity with the claimant in writing, by telephone, or personally. Section 115(8) separately gives specified laborer notice/lien agents waiver authority unless the laborers send a written replacement notice; an individual laborer may also provide the waiver.

5. A real private draw uses more than a waiver

Under §110, a contractor supplies a sworn statement whenever owner payment is due/requested and on owner demand. A subcontractor supplies one to its contractor when payment is due/requested and to the owner on demand. The prescribed sworn statement lists lower tiers, suppliers, specified unpaid labor, contract amounts, amounts paid, current amounts owing, and other data; it is sworn before a notary. Notices of furnishing remain important exceptions to reliance on another party’s statement.

Section 119 makes the packet especially consequential for a construction mortgage. A mortgagee seeking priority for an advance collects the contractor’s sworn statement, disburses consistently with it, and obtains waivers from the contractor and notice-furnishing claimants. Once a claimant has furnished notice or recorded a lien, a later advance is subordinate unless the mortgagee first obtains the specified full unconditional or a partial unconditional for the full amount then due; the partial waiver’s through date must be within 30 days before the advance.

6. Public work and bond rights are separate

Act 213 requires performance and payment bonds before award of a covered public construction, alteration, or repair contract exceeding $50,000. The payment bond must be at least 25% of the contract and protects labor/material claimants. An unpaid claimant generally waits 90 days after last furnishing to sue; a claimant without a direct contract with the prime has first-furnishing and last-furnishing notice duties; a governmental unit must supply certified bond/contract copies on the statutory affidavit; and suit is barred more than one year after final payment to the prime.

The reviewed Act 213 text prescribes no statewide bond-waiver form and no express counterpart to §115(1)’s advance construction-lien-waiver rule. The §115 forms do not textually release bond rights. Agency and contract documents still matter: MDOT publishes four different Payment/Lien Bond releases and requires acknowledgments. Act 213 also contains state-highway and Drain Code interactions, so “public” is not a sufficient final routing value; the governmental unit and contract regime must be recorded.

Private lien bonds are another branch. Section 116 can move a recorded lien from the property to a bond. Section 127, rather than §115, governs the paid discharge of an already-recorded lien and requires a witnessed and acknowledged certificate.

7. Practical qualified GC workflow

1. Classify before selecting a form. Record private/public ownership, governmental unit and agency, statutory residential status, claimant tier and actual customer, whether a lien or lis pendens is recorded, and whether any §116 or public payment bond applies.
2. Assemble the draw ledger. Collect the current contractor/subcontractor §110 sworn statements, notices of commencement/furnishing, contract and change data, prior waivers, retainage, disputed balances, and direct-payment records.
3. Reconcile claimant by claimant. Match the sworn statement and notices to the pay application. Resolve mismatched legal names, actual contracting party, scope, property description, through date, cumulative election, and lower-tier amount before sending.
4. Choose the payment-stage form. Use conditional when the exact stated payment has not occurred. Use unconditional only after the customer has reliable source records for the payment facts. Do not use any form for unperformed future work.
5. Complete the prescribed face. Populate every applicable blank, obtain the claimant’s partial-form election, and place the claimant’s signature and date in the execution area. Do not let address, phone, property, scope, or election remain unresolved.
6. Coordinate exact payment. Tie the waiver to the exact amount and instrument/transfer. Preserve tender, settlement, recipient, reversal/dishonor, payer, reliance, and any written failed-consideration notice without claiming SubLien determined legal effect.
7. Collect the post-payment form. After full contract payment, obtain the full unconditional. After partial payment, request the partial unconditional when desired and reconcile it to the amount actually received.
8. Handle lender draws separately. For §119, preserve the mortgagee, advance, sworn statement, all required waivers, amount then due, and the 30-day through-date test.
9. Close the correct remedy. Use the applicable public/agency bond release for public work, the §116 bond path for a bonded-off lien, and a §127 witnessed/acknowledged recorded discharge when an existing lien was paid.