Friday, January 30, 2009

New Bill Would Allow Construction Liens on Public Property

On January 29, 2009, Sen. Dennis Olshove (D. Warren) introduced S.B. 140, which would allow construction liens to be recorded against government (public) property.

Specifically, S.B. 140 would amend Section 107 of the Construction Lien Act (MCL 570.1107) by adding a new Subsection (7):
(7) Real property owned or leased by a government entity or as to which a government entity contracts for an improvement is subject to a construction lien under this Act to the same extent as other real property.
That a constructions lien may not attach to public property is a well established principal under Michigan law. S.B 140 would be a significant departure from long-established precedent. See e.g., Kammer Asphalt v East China Twp, 443 Mich 176, 181, n. 10 (1993). ("materialmen and contractors may not obtain a mechanics' lien on a public building") (citing Knapp v Swaney, 56 Mich 345, 347; 23 NW 162 (1885) ("Public property cannot be the subject of a [Builders'] lien unless the statute shall expressly so provide; it is by implication excepted from lien statutes, as much as from general tax laws, and for the same reasons.") and Ford v State Bd of Ed, 166 Mich 658, 660; 132 NW 467 (1911) ("These creditors have no lien upon this public building.").

To track the progress of S.B. 140, click here.

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