Michigan Residential Builders License Practice Test

If you are paid after filing a claim of lien, what document must you complete?

1. Affidavit of payment

2. Discharge of construction lien

3. Final notice of payment

4. Completion certificate

The correct answer is: Discharge of construction lien

When you are paid after filing a claim of lien, you must complete a Discharge of Construction Lien. This document is essential because it officially releases the lien you had previously filed against the property once you have received payment for the work or materials provided. By completing and recording this discharge, you notify the property owner and any other interested parties that the debt has been satisfied, and they no longer need to worry about the claim you filed. In the context of construction law, lien rights allow contractors and suppliers to secure payment by placing a claim against a property. Once payment is received, the Discharge of Construction Lien is necessary to clear the title on the property and ensure that the lien does not affect future transactions associated with that property. Thus, it is a crucial step in the financial closure of a construction project and helps maintain positive relationships in the industry.