Michigan Sworn Statements and Construction Liens

A Michigan contractor can record a timely and otherwise valid construction lien and still face a statutory barrier because a required sworn statement was not provided. The consequences depend on whether the claimant is a contractor or a subcontractor. The missing form generally does not invalidate the lien, but it can prevent payment or lien-enforcement litigation until the defect is addressed.

That distinction matters when a payment dispute is approaching the 90-day lien-recording deadline or the separate one-year enforcement deadline. Neither clock stops while the parties sort out sworn-statement paperwork.

The Short Answer

Under MCL 570.1110, a contractor must provide an owner or lessee with a sworn statement when payment is due, when the contractor requests payment, and upon demand. If the contractor fails to provide the required statement before recording its construction lien, the lien remains valid. However, the contractor is not entitled to payment and may not file a complaint, crossclaim, or counterclaim to enforce the lien until the statement is provided.

A subcontractor also has sworn-statement duties, but the statutory consequence is narrower. If a subcontractor fails to provide the owner-requested statement required by subsection (2) before recording its lien, the lien remains valid, but the subcontractor may not commence lien-enforcement litigation until the statement is provided. Subsection (10) does not impose the contractor’s separate payment bar on subcontractors.

Key Points

• A sworn statement is different from a pay application, lien waiver, and notice of furnishing.
• Contractors and subcontractors have different recipients, triggers, and statutory consequences.
• Providing a missing statement does not extend the 90-day lien-recording deadline or the one-year enforcement deadline.
• The statement must be accurate when signed. A false statement given with intent to defraud can create criminal exposure.
• Proof of delivery should remain in the project file with the statement and the records used to prepare it.

What a Michigan Sworn Statement Discloses

A sworn statement gives the owner, lessee, or contractor information about unpaid participants in the portion of the project covered by the statement. The statutory form identifies subcontractors and suppliers with whom the signer contracted for the improvement. It also identifies directly contracted laborers whose wages, fringe benefits, or withholdings are due but unpaid.

For each listed subcontractor, supplier, or laborer, the form calls for information such as the total contract amount, the amount already paid, and the amount currently owing. The statutory form includes a balance-to-complete field but marks that field optional. Materials taken from a contractor’s or subcontractor’s ordinary inventory and not specifically purchased for the project need not always be listed.

The signer swears to the statement before a notary. The form should therefore be prepared from current project records, not reconstructed from memory at the notary’s counter.

What a Sworn Statement Is Not

A pay application. An AIA G702, invoice, or other billing document requests payment. It does not replace the statutory sworn statement.

A lien waiver. A lien waiver relinquishes lien rights to the extent stated in the waiver. A sworn statement discloses project-payment information. The documents often travel together, but each serves a different purpose. See our guide to Michigan construction lien waivers.

A notice of furnishing. A subcontractor or supplier generally serves a notice of furnishing early in the project to preserve lien rights. That notice ordinarily must be served within 20 days after first furnishing labor or material, subject to the statute’s recipient rules and exceptions. See MCL 570.1109.

When Contractors Must Provide a Sworn Statement

A contractor must provide a sworn statement to the owner or lessee when payment is due, when the contractor requests payment, and whenever the owner or lessee demands one. Because most draw packages request payment, including a current sworn statement with each draw is a sound office practice. It also avoids a later dispute about whether a particular payment request triggered the statute.

The sworn statement should reflect the project’s current accounts-payable information on the date it is signed. If the contract or project platform imposes additional submission requirements, the contractor should satisfy those requirements as well and keep evidence of delivery.

When Subcontractors Must Provide a Sworn Statement

A subcontractor must provide a sworn statement to the contractor when payment is due to the subcontractor or when the subcontractor requests payment. A subcontractor must also provide one to the owner or lessee upon demand, subject to the residential-project condition stated in MCL 570.1110(2) and (6), when applicable.

The distinction between these obligations is important. The lien-enforcement bar in subsection (10) applies to a subcontractor that failed to provide the owner-requested statement required by subsection (2) before recording its lien. Subsection (10) does not use the same language for a statement owed to the contractor under subsection (3).

How Missing Statements Affect Contractors and Subcontractors

The table addresses the lien-specific consequences in MCL 570.1110(9) and (10). Other contractual, statutory, or factual issues may affect payment and lien rights.

Correcting a Missing Statement Without Losing the Deadline

The statute makes the sworn-statement restrictions last until the required statement is provided. That makes the defect potentially correctable, but it does not make delay safe. A claimant generally must record a claim of lien within 90 days after its last furnishing of labor or material under its contract. See MCL 570.1111. Proceedings to enforce the lien generally must begin within one year after the lien was recorded. See MCL 570.1117. Providing a sworn statement does not restart either period.

A claimant should therefore provide the required sworn statement before commencing lien-enforcement litigation. If litigation has already been filed, counsel should evaluate the procedural consequences immediately rather than assume later delivery automatically validates the existing claim. Dismissal, amendment, or refiling questions can become critical as the one-year period approaches.

How Owners Use Sworn Statements

A sworn statement also gives an owner tools for controlling payment risk. Under MCL 570.1110(7), an owner or lessee may withhold from the contractor amounts shown as unpaid to subcontractors, suppliers, and laborers. On the contractor’s written demand, the owner or lessee must withhold those amounts. The owner or lessee may also pay listed parties directly, with those payments treated as payments to the contractor. The statute requires advance notice to the contractor in certain first-direct-payment circumstances.

The Act also permits specified parties to rely on a sworn statement in certain circumstances. That reliance generally does not defeat the claim of a subcontractor, supplier, or laborer who properly served a notice of furnishing or was excused from serving one under the statute.

In Vugterveen Systems, Inc. v. Olde Millpond Corp., 454 Mich. 119, 131-132; 560 N.W.2d 43 (1997), the Michigan Supreme Court found substantial compliance with the notice-of-furnishing requirement where the owner received actual information identifying the subcontractor, its work, and the property. The owner could not rely on a sworn statement to avoid the lien. The decision is fact-specific; it is not a substitute for timely statutory notice.

Why Accuracy Matters

A contractor or subcontractor who desires to draw money and gives or causes a required false sworn statement to be given with intent to defraud can face criminal penalties under MCL 570.1110(11). The penalties depend on the amount involved and prior convictions; the highest stated tier begins at $20,000 or more and can carry imprisonment of up to 10 years. Amounts involved in a course of conduct during a 12-month period may be aggregated.

Project funds may also be subject to the Michigan Builders Trust Fund Act. That statute treats certain money paid to a contractor or subcontractor in the building-construction industry as trust funds for designated beneficiaries. See MCL 570.151. A trust-fund claim has its own elements, but inaccurate payment reporting can become significant evidence in a broader payment dispute.

Anyone who discovers an error should preserve the supporting records, correct the statement promptly, and provide the corrected version to the proper recipients. A material or potentially intentional discrepancy should be reviewed with counsel before further payment requests or litigation.

A Practical Sworn Statement Protocol

1. Identify your statutory role. Determine whether the company is acting as the contractor, a subcontractor, a supplier, or in more than one role on the project.
2. Calendar the notice of furnishing. If a notice is required, serve it within 20 days after first furnishing on the recipients identified by the Construction Lien Act. Review our five critical Michigan construction lien steps.
3. Use a current statement with each draw. This practice ordinarily captures contractor and subcontractor payment-request triggers and reduces later disputes.
4. Reconcile against the books. Confirm each listed party, contract amount, amount paid, and amount currently owing against the project ledger and actual disbursements.
5. Review before notarization. The person signing should understand the information and verify that the statement is accurate as of the stated date.
6. Preserve delivery evidence. Keep the signed statement, transmittal email or platform receipt, and the records used to prepare it in the project file.
7. Audit before recording or suing. Before recording a lien or commencing enforcement, confirm that all required notices, statements, service steps, and deadlines have been satisfied.

Frequently Asked Questions

Is a sworn statement the same as a lien waiver?

No. A lien waiver relinquishes lien rights to the extent stated. A sworn statement discloses information about project participants and amounts paid or owing. Providing one does not satisfy the other.

Can a claimant record a lien before providing a sworn statement?

A missing required sworn statement does not, by itself, invalidate the recorded lien under MCL 570.1110(9) or (10). The consequences differ by claimant: a contractor can face both a payment bar and an enforcement-filing bar, while the subcontractor provision imposes an enforcement-filing bar for the subsection (2) failure. The 90-day recording deadline still applies.

Can a missing statement be provided after the lien is recorded?

The statutory restriction lasts until the required statement is provided, but other deadlines continue to run. The safer course is to furnish the statement before filing an enforcement action. A claimant that has already filed suit should obtain immediate advice about the procedural effect and the remaining one-year period.

What should a business do if a sworn statement contains an error?

Review the supporting records, preserve the original, prepare an accurate corrected statement, and send it promptly to the proper recipients with proof of delivery. Seek legal advice if the discrepancy is material, affects a payment request, or could be viewed as intentional.

Talk to a Michigan Construction Lawyer

Szura & Delonis, PLC represents contractors, subcontractors, suppliers, and developers in Michigan construction-payment and lien disputes. We serve clients in Oakland, Wayne, Macomb, and Washtenaw Counties from our Southfield office.

If you are carrying an unpaid balance or are unsure whether the project’s sworn statements, notices, waivers, or lien deadlines are in order, call (248) 716-3600 or contact us to arrange a construction-lien and payment-dispute review.

Disclaimer. This article provides general information about Michigan law and is not legal advice. Reading it does not create an attorney-client relationship. Construction-lien rights depend on the claimant’s role, contracts, project type, furnishing dates, notices, sworn statements, service, and other facts. Consult qualified counsel about a specific project or deadline.

About the Author

Richard M. Delonis is a Michigan construction, business, and real estate attorney at Szura & Delonis, PLC in Southfield, serving clients throughout Metro Detroit. He advises construction managers, general contractors, subcontractors, suppliers, and property owners on lien rights, collections strategy, contract disputes, and project-risk issues.