Under Michigan lien law, a contractor must provide a Notice of Commencement for projects exceeding:
Correct Answer
D) $100,000
Michigan Construction Lien Act 497 requires a Notice of Commencement to be recorded for construction projects with an improvement value exceeding $100,000.
Why This Is the Correct Answer
Michigan's Construction Lien Act (Act 497 of 1980) requires that a Notice of Commencement be recorded for construction projects with an improvement value exceeding $100,000. This notice initiates the formal lien-rights framework, putting all potential lien claimants, owners, and lenders on constructive notice that a project has begun.
Why the Other Options Are Wrong
Option A: $25,000
$25,000 is well below the Michigan threshold. This figure might be associated with small-project exemptions or thresholds in other states' lien laws, but Michigan Act 497 sets the Notice of Commencement trigger at $100,000.
Option B: $50,000
$50,000 is also below Michigan's statutory threshold. This amount may be confused with other construction-law dollar triggers (such as bid bond requirements or certain public project thresholds) but does not match the Notice of Commencement requirement.
Option C: $75,000
$75,000 is closer to the correct answer but still falls short of the $100,000 statutory threshold. The three lower amounts ($25K, $50K, $75K) form a progression that tests whether candidates know the specific number rather than just knowing it is 'a large amount.'
Memory Technique
Michigan = '100K Notice': the Great Lakes State draws the line at exactly $100,000 for the Notice of Commencement. Picture Michigan's Lower Peninsula shaped like a mitten holding a sign that reads '$100,000 — File Notice Here.'
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