How to collect unpaid invoices in Michigan: construction lien act, one-party consent, and District Court

Michigan's eavesdropping statute (MCL 750.539c) prohibits the use of any device to overhear, record, or transmit a private conversation without the consent of at least one party. Because the caller's own consent satisfies the one-party threshold, Michigan businesses -- and AI tools calling on their behalf -- can record collection calls without separately disclosing or seeking the customer's consent. Disclosing anyway is good practice, but the statute does not require it. Michigan courts have held that the one-party consent rule applies to the caller regardless of whether the other party is aware of the recording.

Michigan's Construction Lien Act (MCL 570.1101 et seq.) governs lien rights for contractors, subcontractors, and suppliers who furnish labor or materials to improve real property. General contractors who have a direct contract with the owner do not need to serve a preliminary notice. Subcontractors, suppliers, and anyone else who lacks a direct contract with the owner must serve a Notice of Furnishing on the owner and general contractor within 20 days of first furnishing labor or materials (MCL 570.1109). Work furnished more than 20 days before the notice is served falls outside lien protection.

The lien claim itself must be recorded with the register of deeds in the county where the property is located within 90 days after the last date of furnishing (MCL 570.1111). For a subcontractor whose last day of work was July 1, the deadline is September 29. After recording, an action to enforce the lien must be filed within 1 year of recording. Michigan lien law also has a sworn statement requirement: before a contractor is entitled to final payment, the owner may require a sworn statement listing all subcontractors and suppliers. Failure to provide an accurate sworn statement can complicate lien enforcement.

Michigan District Court small claims (MCR 4.302) handles disputes up to $6,500. Filing fees are $30 to $70. Hearings are typically scheduled within 21 to 56 days of filing. Corporations and LLCs may represent themselves in small claims through an officer or manager; attorney representation is not required and generally not permitted for the small claims docket specifically. For claims between $6,500 and $25,000, the District Court civil docket applies. Claims above $25,000 go to Circuit Court.

Michigan's statute of limitations on written contracts is 6 years (MCL 600.5807(8)). For oral contracts, the limit is 6 years as well -- Michigan applies the same window to both (MCL 600.5807(7)). The clock runs from when the cause of action accrues, typically when payment was due and refused. Michigan courts apply this rule strictly. An invoice issued in June 2020 must be filed in court by June 2026. Waiting past 18 months to pursue a disputed invoice meaningfully reduces the odds of recovery even where a valid legal claim still exists.