A Michigan contractor completes $85,000 worth of work but has not been paid. Under the Construction Lien Act 497, what is the maximum lien amount that can be claimed?
Correct Answer
A) $85,000
Under Michigan's Construction Lien Act 497, a contractor can claim a lien for the full amount of unpaid work performed, which is $85,000 in this case.
Why This Is the Correct Answer
Under Michigan's Construction Lien Act 497, a contractor may claim a lien for the full amount of the unpaid, lienable work performed. Since the contractor completed $85,000 of work and has not been paid, the maximum lien is $85,000 — the exact value of the unpaid work. The Act does not permit inflating the lien with penalties, interest multipliers, or contingency adjustments.
Why the Other Options Are Wrong
Option B: $93,500
$93,500 represents $85,000 plus a 10% addition, which has no basis in Michigan's Construction Lien Act. Contractors cannot add a percentage premium to the value of unpaid work when filing a lien.
Option C: $76,500
$76,500 represents $85,000 minus 10%, perhaps suggesting a reduction for retainage or a defect deduction. However, the question states the full $85,000 was completed work that was not paid, so no reduction applies.
Option D: $68,000
$68,000 is $85,000 reduced by 20%, which also has no statutory basis for this scenario. Michigan liens cover the lienable value of completed, unpaid work — not a discounted portion.
Memory Technique
Think of a lien as a 'mirror of the debt.' The lien reflects exactly what is owed — no inflating, no deflating. If the debt is $85,000, the lien mirror shows exactly $85,000.
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