Liens

A township has several options for collecting unpaid or delinquent fees, costs or charges. One option is a "lien" on the property involved.

A lien is a legal right to have real or personal property sold or otherwise applied to satisfy a debt. It is an encumbrance on the property that "runs with the property."

A township must be able to point to a statute that authorizes the use of liens to collect a specific fee.

A judgment lien is a lien on property to satisfy a judgment in favor of the lien holder. A court order or judgment for monetary amounts, such as fines or costs resulting from a municipal civil infraction ticket, is an example of a judgment lien. 

Under the Revised Judicature Act of 1961 (RJA), PA 236 of 1961, if a defendant does not pay a municipal civil infraction fine, costs, or assessment ordered by a court for a violation involving the use or occupation of land or a building or other structure, the township may obtain a judgment lien against the land, building, or structure involved in the violation by recording a copy of the court order requiring payment of the fines, costs, and assessment with the register of deeds for the county in which the land, building, or structure is located. The lien is effective immediately upon recording. The lien may be enforced and discharged by a township in the manner prescribed by the General Property Tax Act or by an ordinance adopted by the township board. But property is not subject to sale for nonpayment of a municipal civil infraction fine, costs, or assessment. (MCLs 600.8727 and 600.8731)

Also under the RJA, a circuit court may order the abatement of an ordinance violation at the expense of the property owner under MCL 600.2940(3).

Under Chapter 28 of the RJA, “judgment lien" means an encumbrance in favor of a judgment creditor against a judgment debtor's interest in real property, including, but not limited to, after acquired property. Chapter 28 specifies procedures for filing a judgment lien (MCLs 600.2801 to 600.2819). There is no right to foreclose a judgment lien under Chapter 28. 

A construction lien is a lien created under the Construction Lien Act, PA 497 of 1980, MCL 570.1101, et seq. A contractor, subcontractor, supplier, or laborer who provides an improvement to real property has a construction lien that subjects the property to foreclosure. The connection to townships is that collection of costs of a court-ordered clean-up of a fire hazard under the Fire Prevention Code is enforced in the same manner as construction liens (MCL 29.16), and noxious weed liens (see below) may be enforced as a construction lien.

A statutory lien is a lien created by state law. Property tax liens and special assessment liens are examples of statutory liens. (See the list below.)

While there are many specific lien statutes, and most public improvements may be enforced with liens under the Revenue Bond Act, there are still some public services that have no statutory authority for imposing a lien. For example, although a township may by ordinance charge a fire or emergency services run/cost recovery fee, there is currently no statutory authority to impose past due cost recovery fees as a lien on property.

A township board may want to consult with its local legal counsel on specific questions regarding the nature of a specific lien and the proper means to enforce the lien.

The following are several statutes that authorize townships to add unpaid costs, bills or assessments to the property tax bill as a statutory lien and collect them according to the General Property Tax Act or, in some cases, by another method specified by township ordinance. It is important to note that once this type of lien is added to the tax bill, it is subject to the shortened time frame for foreclosure procedures now applied to real property taxes under PA 123 of 1999 (MCLs 211.78 to 211.78o):

The General Property Tax Act, PA 206 of 1893

The Act imposes a tax lien on real and personal property. Real property liens are subject to foreclosure (MCL 211.60) and personal property is subject to seizure (MCL 211.47).

Public Improvements Act, PA 188 of 1954

A special assessment installment that is unpaid as of September 1 is delinquent and is reassessed on the general property tax roll (MCLs 41.727, 41.729 and 41.730). If a delinquent special assessment is not paid, the property is subject to foreclosure under the General Property Tax Act. PA 188 includes a wide variety of public improvements, such as roads, water and sewer systems, garbage collection, street lighting, sidewalks, aquatic weed control, sound control walls, and public parks (MCL 41.722).

Muncipal Water Liens Act, PA 178 of 1939

Delinquent municipal water and sewer bills impose a lien on the property served. A township that operates a water or sewer system may also go to court or disconnect service, but that does not prevent it from enforcing the lien for up to three years after it becomes effective upon the distribution of the water or provision or the sewer system service. (MCL 123.161, et seq.)

Noxious Weeds Act, PA 359 of 1941

A township with a population of 5,000 or more may provide by ordinance that if the owner, agent or occupant of land in a subdivision where buildings have been erected on 60 percent of the lots, or an owner, agent or occupant of a lot along an improved street in common usage fails to destroy noxious weeds after 10 days' notice, the township may enter the lot and destroy noxious weeds by cutting. Expenses incurred in destroying the weeds must be paid by the owner of the lot, and the township has a lien on the lot for its expenses. The lien is enforced as a tax lien. (MCL 247.64)

Michigan Housing Law, PA 167 of 1917

Where a township is enforcing an order to demolish or maintain a dangerous building, and the owner fails to pay the cost within 30 days after the assessor mails the notice of the amount of the cost, the township has a lien for the cost. The lien shall be collected in the same manner as property tax liens under the General Property Tax Act. In addition, if a township obtains a judgment against a property owner for the cost of demolition or maintenance of a dangerous building, the township has a lien on the property for the amount of the judgment once the lien is filed or recorded as required by law. (MCL 125.541)

Fences and Fence Viewers Act, PA 34 of 1978

When a person who is assessed damages or an amount of compensation by a township fence viewer neglects or refuses to pay by October 1, the amount becomes a lien on the property. (MCL 43.58)

Part 119--Waste Management and Resource Recovery Finance, Natural Resources and Environmental Protection Act, PA 451 of 1994

A township may provide that rates or charges for a waste management project shall be a lien on the premises. Amounts delinquent for 3 months or more may be certified annually to the proper tax assessing officer or agency of the municipality, to be entered upon the next tax roll against the premises to which the services have been rendered. The charges shall be collected and the lien enforced in the same manner as provided for the collection of taxes assessed upon the tax roll and the enforcement of a lien for unpaid taxes. The time and manner of certification and other details in respect to the collection of the rates and charges and the enforcement of the lien must be prescribed by the township board, usually by ordinance. (MCL 324.11904)

Revenue Bond Act of 1933, PA 94 of 1933

Charges for services furnished to a premises may be a lien on the premises. Charges delinquent for 6 months or more may be certified annually to the proper tax assessing officer or agency who must enter the lien on the next tax roll against the premises. The charges must be collected and the lien enforced in the same manner as provided for the collection of taxes and the enforcement of the lien for taxes. The time and manner of certification and other details in respect to the collection of the charges and the enforcement of the lien must be specified in an ordinance adopted by the township board. (MCL 141.121)

Charges for water service or sewage disposal or storm water disposal services may also be enforced by disconnection or collection in small claims court. (MCL 141.121)

The types of services are defined by the Act as only: housing facilities; garbage disposal plants; rubbish disposal plants; incinerators; transportation systems, including plants, works, instrumentalities, and properties used or useful in connection with those systems; sewage disposal systems, including sanitary sewers, combined sanitary and storm sewers, plants, works, instrumentalities, and properties used or useful in connection with the collection, treatment, or disposal of sewage or industrial wastes; storm water systems, including storm sewers, plants, works, instrumentalities, and properties used or useful in connection with the collection, treatment, or disposal of storm water; water supply systems, including plants, works, instrumentalities, and properties used or useful in connection with obtaining a water supply, the treatment of water, or the distribution of water; utility systems for supplying light, heat, or power, including plants, works, instrumentalities, and properties used or useful in connection with those systems; approved cable television systems, approved cable communication systems, or telephone systems, including plants, works, instrumentalities, and properties used or useful in connection with those systems; automobile parking facilities, including within or as part of the facilities areas or buildings that may be rented or leased to private enterprises serving the public; yacht basins; harbors; docks; wharves; terminal facilities; elevated highways; bridges over, tunnels under, and ferries across bodies of water; community buildings; public wholesale markets for farm and food products; stadiums; convention halls; auditoriums; dormitories; hospitals and other health care facilities; buildings devoted to public use; museums; parks; recreational facilities; reforestation projects; aeronautical facilities; and marine railways. (MCL 141.103)