Construction Law

How to Bond Off a Construction Lien in Michigan

Posted on August 20, 2019
The process for bonding off a construction lien in Michigan generally involves posting a surety bond for twice the lien amount with the county clerk where the property is located. Cash bonds are permitted, but not common. Once a bond is submitted, and no objections are received, the county clerk will issue a certificate vacating he lien which is then recorded with the register of deeds...

Michigan Legislature Renews Effort to Abolish Prevailing Wage

Posted on January 23, 2017
On January 18, 2017,  Senators Peter MacGregor, Dave Hildenbrand, and Arlan Meekhof, introduced S.B. 0003, which would repeal Michigan's Prevailing Wage statute (PA 166 of 1965; MCL 408.551, et seq) in its entirety. The proposed legislation also includes a nominal appropriation to make it more difficult to challenge the repeal if enacted...

New Skilled Trades Regulation Act Impacts Section 114 of Michigan Construction Lien Act

Posted on January 05, 2017
During the recent lame duck session in December, the Michigan Legislature passed a series of bills aimed at consolidating the licensing and regulation of skilled trades, including residential builders, electricians, plumbing and mechanical contractors...

FAR Amendments Designed to Speed Up Payment to Subcontractors

Posted on December 02, 2013
On November 25, 2013,  the DOD, GSA, and NASA issued a final rule amending the Federal Acquisition Regulations (FAR) to incorporate a new clause to provide accelerated payments to small business subcontractors.The new clause [FAR 52.232-40] requires prime contractors, upon receipt of accelerated payment from the Government, to make accelerated payment to small business subcontractors, to the maximum extent practicable, after receipt of a proper invoice and all proper documentation from small business subcontractors...

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Sixth Circuit Upholds Michigan Law Limiting Project Labor Agreements

Posted on September 15, 2013
On September 6, 2013, the Sixth Circuit Court of Appeals voted 2-1 to uphold the "Michigan Fair and Open Competition in Government Construction Act" (PA 98 of 2011).  The act prohibits a city, village, township or other governmental unit from awarding a public construction project, grant, tax abatement or tax credit based on whether or not a bidder, contractor or developer employs union or non-union labor...

New Law Expands Protection of Michigan's Anti-Indemnification Law

Posted on January 14, 2013
The final days of 2012 saw a flurry of activity by the Michigan Legislature. Among the new legislation passed during an historic lame duck session was a significant legislative victory for contractors and design professionals.  Public Act 468 of 2012, which was sponsored by Rep...

Federal Court Strikes Down Michigan Law Barring Project Labor Agreements, Finds that National Labor Relations Act Preempts State Law (UPDATED)

Posted on March 05, 2012
On February 29, 2012, U.S. District Judge Victoria Roberts issued an Order striking down the "Michigan Fair and Open Competition in Government Construction Act" (PA 98 of 2011) finding that its limits on project labor agreements (PLA) violated the National Labor Relations Act...

Test Wells Count as "Actual Physical Improvement" for Lien Priority, Michigan Court of Appeals Rules

Posted on February 29, 2012
Test wells installed by a potential buyer prior to closing constituted a physical improvement, allowing a construction lien to attach prior to buyer?s closing and giving the lien priority over a mortgage granted at closing. The Michigan Court of Appeals reached this conclusion in a recent unpublished case...

SB 77 Signed into Law by Governor Snyder

Posted on October 07, 2011
On October 4, 2011, Governor Rick Snyder signed SB 77 into law (now PA 162  of 2011).  As we noted here, the new law solves the problems created by the Michigan Supreme Court's 2006 Ostroth ruling. The new law restores the applicable limitation periods to their previous durations, and restores the long-established rules that govern them...

Statute of Limitations: Ostroth Overturned by SB 77, New Law Takes Effect January 1, 2012

Posted on September 23, 2011
By: Gary D. Quesada, EsqCavanaugh & Quesada, PLCOne of the most effective defenses to a lawsuit is the statute of limitations. Limitations periods created by statute are grounded in public policy considerations which include encouraging the prompt recovery of damages, penalizing plaintiffs who have not been industrious in pursuing their claims, affording defendants security against stale demands and prolonged fear of litigation, and prevention of fraudulent claims...

Federal Lawsuit Challenges Legality of Michigan's New PLA Legislation (PA 98)

Posted on August 22, 2011
Not unexpectedly, a federal lawsuit was filed on August 11, 2011 challenging the legality of the ?Fair and Open Competition in Governmental Construction Act? (PA 98 of 2011). As we reported last month (here), PA 98 prohibits most project labor agreements...

Michigan Supreme Court Decision Expands Liability Exposure for Contractors

Posted on August 01, 2011
By: Gary D. Quesada, Hon. Aff. AIA, J.D.Cavanaugh & Quesada, PLC On July 11, 2011, the Michigan Supreme Court decided the case of Miller-Davis v. Ahrens, __ Mich __ (2011), which held that Michigan?s special statute of repose, MCL 600.5839, does not apply to contract-based construction claims...

New Michigan Law Prohibits (Most) Project Labor Agreements

Posted on July 22, 2011
On July 19, 2011, Michigan Governor Rick Snyder signed SB 165 into law as the ?Fair and Open Competition in Governmental Construction Act? (PA 98 of 2011).The Act prohibits a city, village, township or other governmental unit from awarding a public construction project, grant, tax abatement or tax credit based on whether or not a bidder, contractor or developer employs union or non-union labor...

Davis Bacon Wage Determinations (Past and Present)

Posted on July 01, 2011
The U.S. Government Printing Office (GPO), in conjunction with the Department of Labor (DOL) and the NTIS, have collaborated to provide permanent public access to Davis Bacon Wage Determinations. The new site is called "Wage Determinations OnLine...

New Legislation Bans Resale, Capital Recovery Fees for Residential, Commercial Real Estate in Michigan

Posted on May 27, 2011
Following the collapse of the real estate market a few years ago, a growing number of developers and home builders have been adding "resale fee" provisions to their sales agreements that allow the developer to collect 1 percent of the sales price from the seller every time the property changes hands ? for the next 99 years...

AGC Legal Brief Highlights Cedroni Decision, Other Recent Michigan Cases

Posted on March 02, 2011
The February, 2011 issue of the AGC Legal Brief highlights a number of recent court decisions affecting design professionals, contractors, subcontractors and lien claimants in Michigan.This issue of the Legal Brief was written by Aileen M. Leipprandt, a construction  attorney with the Hilger Hammond firm in Grand Rapids, and includes the following articles:Contractor Gets a Shot at Proving Architect Improperly Interfered with Bid Award [reporting on the November 2010 Michigan Court of Appeals deicsion in Cedroni Associates, Inc v Tomblinson, Harburn Associates, Mich Ct App No...

Court of Appeals finds Contract, Airport Authority Bound by Accepted Bid

Posted on January 14, 2011
By: Matthew C. Norris, EsqMatthew C. Norris, PLCOccasionally, a contractor will successfully submit a low bid to a government entity and have the low bid accepted, only to have the public body refuse to formally enter into the contract. The Michigan Court of Appeals recently decided a case in favor of a general contractor...

Municipal Codes Online

Posted on September 13, 2010
Municipal codes are not the sexiest part of the law, but occasionally there are issues that require you track down a local ordinance. I recently had to track down the procurement ordinance for Wayne County (Michigan). I got no where calling the Purchasing Department, but found what I was looking in short order through Municode...

Public-Private Partnership Legislation May Be Limited to DRIC Bridge Project

Posted on September 08, 2010
Legislation to authorize public-private partnerships (P3) in Michigan (first reported here) may be limited to the Detroit River International Crossing (DRIC) project, according to a report in Crain?s Detroit Business.

Negligent Building Design, Expert Testimony Required to Establish

Posted on July 31, 2010
The Michigan Court of Appeals recently affirmed the rule that expert testimony  is required to establish negligent building design. This rule was outlined in Lawrenchuk v Riverside Arena, Inc, 214 Mich App 431; 542 NW2d 612 (1995): ?In the absence of expert testimony providing standards for evaluating the relevant risks and advantages of [a particular] design, a jury would be denied an objective framework by which to evaluate [the] plaintiff?s claim, thus precluding any genuine determination whether the design was unreasonable...

Bill to Abolish Michigan Homeowner Construction Lien Recovery Fund Passes House

Posted on June 19, 2010
On June 16, 2010, H.B. 5830, and a series of companion bills that would abolish the Homeowner Construction Lien Recovery Fund, was passed by the Michigan House of Representatives by a 94-9 vote. The bill has been referred to the Senate Appropriations Committee...

Legislation Creating Public Private Partnerships, to Enable the DRIC Advances

Posted on June 02, 2010
Legislation to enable the Detroit River International Crossing (DRIC) project, through the creation of Public Private Partnerships (P3) has been moving forward under two other bills, H.B. 4961 and H.B. 6128.   H.B. 4961 was approved by the Michigan House on May 26, 2010...

LEED Legislation Profiled

Posted on May 24, 2010
The Hilger Hammond firm has posted an article (here) profiling S.B. 1111-1114 (2010), which were introduced in the Michigan Senate earlier this year. This legislation would  amend the Commercial Redevelopment Act (PA 255 of 1978), and would provide financial incentives for construction and renovation projects achieving LEED certification...

Legislation Introduced to Prohibit Pay-When-Paid Clauses on Michigan Public Projects

Posted on May 10, 2010
On May 6, 2010, Senators Michael Switalski (D. Roseville)  and Dennis Olshove (D. Warren) introduced S.B. 1319, which would prohibit a surety?s reliance on a ?pay-when-paid? clause in defense of payment bond claim.  Specifically, S.B. 1319 would amend Section 3 of the Public works bond statute (MCL 129...

Personal Liability under the Michigan Builder?s Trust Fund Act, Michigan Court of Appeals Affirms

Posted on May 03, 2010
Proof that a corporate officer personally misappropriated contract proceeds ?is not necessary to find an officer liable? for a violation of the Michigan Builder?s Trust Fund Act (MCL 570.151, et seq).  ?[A] reasonable inference of appropriation arises from the payment of  construction funds to a contractor and the subsequent failure of the contractor to pay laborers, subcontractors, materialmen, or other entitled to payment...

ARRA Money Creates Pitfall for Contractors Bidding on Detroit Public Schools Construction Program

Posted on April 23, 2010
Following voter approval last November, the Detroit Public Schools (DPS) is currently embarking on an ambitious program to construct 8 new high schools and renovate another 10 schools over the next three years. Approximately half of the money raised by the Detroit Public Schools for its new $500 million school construction and renovation program is coming through the federal Qualified School Construction Bond (QSCB) Program...

New Bill Would Abolish Michigan Homeowner Construction Lien Recovery Fund

Posted on February 19, 2010
Just a few months ago, we reported that the Michigan Homeowner Construction Lien Recovery Fund was almost out of money and had no means to replenish its depleted coffers without action by the Michigan Legislature. I expected something to happen, but not this...

AGC of Michigan Contruction Law, Upcoming Seminars

Posted on January 27, 2010
In addition to its upcoming Construction Law Webinar Series, AGC of Michigan is presenting its annual Professional Development Day on March 5, 2010 at the VisTaTech Center in Livonia. There will be 7 sessions divided into two tracks.  For more information or to sign-up and attend, click here:   Track 1: Becoming Incident and Injury Free> Session I: Transform Your Safety Culture> Session II: Safe Start> Building a Winning Team Track 2: Sell Yourself-Sell Your Company> Session I: Successful Projects through Effective Project Controls (*)> Session II: Failure or Success/How Do You Define Success?> Session III: It's Not What I Say - It's What I Do> Session IV: Social Networking - the Newest Tool in Your Toolbox(*) Peter Cavanaugh, Cavanaugh & Quesada, PLC will be speaking on the legal aspects of project management topic, together with Joe Vanden Bossche, Navigant Consulting...

Michigan Homeowner Construction Lien Recovery Fund Runs out of Money

Posted on December 29, 2009
In a sign of the times, the Michigan Homeowner Construction Lien Recovery Fund is broke, and there is currently no way to replenish its coffers. The Michigan Homeowner Construction Lien Recovery Fund (Fund) was created under Part 2 of the Michigan Construction Lien Act (MCL 570...

Cavanaugh & Quesada, PLC -- New Offices in Royal Oak

Posted on December 23, 2009
Attorneys Peter Cavanaugh and Gary Quesada have moved their  law practice to new and larger offices in Downtown Royal Oak at 1027 S. Washington Ave. Cavanaugh & Quesada, PLC serves the unique legal needs of the design and construction communities...

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