A contractor receives a Notice of Intent to Lien for $15,000. They dispute the amount and believe only $8,000 is owed. Under Michigan law, what should the contractor do to protect their interests?
Correct Answer
D) Respond in writing within the required timeframe
The contractor should respond in writing within the required timeframe to dispute the lien amount and protect their legal position under Michigan's Construction Lien Act.
Why This Is the Correct Answer
Under Michigan's Construction Lien Act, when a contractor receives a Notice of Intent to Lien and disputes the amount, the proper protective action is to respond in writing within the required statutory timeframe. This formal response preserves the contractor's legal position and documents the dispute.
Why the Other Options Are Wrong
Option A: File a counter-lien
A 'counter-lien' is not a recognized legal mechanism in Michigan's Construction Lien Act for this scenario. Contractors do not respond to lien notices by filing counter-liens — that concept does not exist in this context.
Option B: Pay the full $15,000 under protest
Paying the full disputed amount under protest does not protect the contractor's interests and would likely be seen as acceptance of the $15,000 claim. It also unnecessarily pays $7,000 more than the contractor believes is owed.
Option C: Ignore the notice since they dispute the amount
Ignoring a Notice of Intent to Lien is one of the worst actions a contractor can take. Failure to respond can result in a valid lien being filed and could complicate the contractor's ability to challenge the amount later.
Memory Technique
When in doubt, respond in writing and on time. Think 'WWT' — Write Within Time. For any lien dispute in Michigan, a timely written response is your shield. Silence = consent in lien law.
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