A subcontractor provided $25,000 in materials and labor but was paid only $18,000. Filing fees are $175 and attorney costs are $2,500. What is the maximum lien amount under Michigan law?
Correct Answer
D) $9,675
Michigan allows liens for the unpaid balance ($7,000) plus costs of filing ($175) and reasonable attorney fees ($2,500), totaling $9,675.
Why This Is the Correct Answer
Option D ($9,675) is correct. The unpaid balance is $25,000 − $18,000 = $7,000. Michigan's Construction Lien Act allows the lien claimant to add the cost of filing ($175) and reasonable attorney fees ($2,500) to that unpaid balance: $7,000 + $175 + $2,500 = $9,675.
Why the Other Options Are Wrong
Option A: $7,175
Option A ($7,175) omits attorney fees. It only adds the filing fee to the unpaid balance ($7,000 + $175), ignoring the $2,500 in attorney costs that Michigan law permits.
Option B: $9,500
Option B ($9,500) adds attorney fees but ignores the filing fee ($7,000 + $2,500 = $9,500). Both the filing fee and attorney fees are recoverable; neither can be omitted.
Option C: $7,000
Option C ($7,000) is the bare unpaid balance only. It neglects both the $175 filing fee and the $2,500 attorney fees that Michigan's Construction Lien Act explicitly allows to be added to a lien claim.
Memory Technique
Think of the lien total as three layers: Unpaid Balance + Filing Fee + Attorney Fees. Use the acronym UFA — Unpaid, Filing, Attorney — so you remember all three components every time.
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Under Michigan law, how many days after completion of work does a contractor have to file a construction lien?
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