J & I SERVICE STATION, INC v WASH WAGON OF MICHIGAN, INC
Docket No. 58800.
Submitted August 2, 1982, at Detroit.
Decided October 18, 1982.
The J & I Service Station, Inc., owns a truck repair facility in Detroit. In 1978, J & I leased part of its property to Wash Wagon of Michigan, Inc., to operate a truck-washing facility. It was agreed that if Wash Wagon of Michigan was unable to obtain the necessary building permits within 90 days, Wash Wagon of Michigan could terminate the lease. Thereafter, Wash Wagon of Colorado contracted with Metro Construction Systems, Inc., to convert J & I’s building to a wash facility. Metro performed the work and was paid in part by Wash Wagon of Michigan. Wash Wagon of Colorado then contracted with Metro for more improvements. That bill was not paid. After the sole payment, Metro gave J & I a partial waiver of a lien for the amount paid. Metro did not notify J & I, however, that it intended to claim a mechanics’ lien on J & I’s property for building the truck wash. Later, Metro sent J & I a statement of account and lien. That statement was recorded with the register of deeds. Wash Wagon of Michigan’s rent went unpaid. J & I brought suit in Wayne Circuit Court against Wash Wagon of Michigan to collect the rent and against Metro to quiet title and to have the lien declared invalid as a matter of law. Metro filed a counterclaim against J & I to foreclose its alleged lien, a cross-claim against Wash Wagon of Michigan and a third-party complaint against Wash Wagon of Colorado to recover sums due under the construction contracts. The court, Robert J. Colombo, J., granted summary judgment to J & I. Metro appeals alleging that providing Wash Wagon of Michigan notice of its intent to claim a lien was suificient to provide J & I with notice because Wash Wagon of Michigan was an agent of J & I and that the trial court erred in holding that a *534lienor must strictly comply with the notice requirements of the mechanics’ lien statute. Held:
*533References for Points in Headnotes
[1] 53 Am Jur 2d, Mechanics’ Liens §§ 60, 117.
[2] 53 Am Jur 2d, Mechanics’ Liens §§ 23, 24.
Mechanics’ lien for work on or material for separate buildings of one owner. 15 ALR3d 73.
*5341. A landlord may be bound by a lien for a tenant’s improvements of the premises if the improvements were required by the lease. Here, Wash Wagon of Michigan was not required to make improvements. If the improvements could not have been made, Wash Wagon of Michigan, not J & I, could have terminated the lease. Thus, Metro’s contract with Wash Wagon of Michigan was not with Wash Wagon of Michigan as an agent for J & I. The trial court did not err in ruling such, as a matter of law. Metro’s notifying Wash Wagon of Michigan of its intent to claim a lien should not constitute proper notice to J & I.
2. The circuit court properly found that Metro did not strictly comply with the requirements of the mechanics’ lien statute when it did not send notice of its intention to claim a lien to J & I. J & I was therefore entitled to summary judgment.
Affirmed.
1. Landlord and Tenant — Mechanics’ Liens — Improvements.
A landlord may be bound by a lien for a tenant’s improvements if the improvements are required by the lease; by requiring the lessee to make the improvements the lessor has appointed the lessee an agent; however, because the mechanics’ lien statute is based on contractual relationships, a landlord who permits but does not require improvements has not created a principal-agent relationship with the tenant and notice of a mechanics’ lien given to the tenant should not constitute notice to the landlord (MCL 570.1; MSA 26.281).
2. Mechanics’ Liens — Strict Construction.
The mechanics’ lien statute must be strictly construed to the point when the lien attaches; "strict” construction, not "substantial compliance” is the rule of construction concerning the question of whether or not a lien attaches; after the lien attaches, because of the statute’s remedial character, a liberal construction may be indulged (MCL 570.1; MSA 26.281).
Vandeveer, Garzia, Tonkin, Kerr & Heaphy (by C. F. Boyle, Jr.), for J & I Service.
Schier & Deneweth, P.C. (by Carl F. Schier), for Metro.
*535Before: N. J. Kaufman, P.J., and Wahls and M. E. Clements, JJ.
N. J. Kaufman, P.J.
Plaintiff J & I Service Station, Inc. (J & I), owns a truck repair facility in Detroit. In 1978, J & I leased part of its property to defendant Wash Wagon of Michigan, Inc., to operate a truck washing facility. It was agreed that if Wash Wagon of Michigan was unable to obtain the necessary building permits within 90 days, the lessee could terminate the lease.
Thus, upon failure of a condition subsequent, Wash Wagon of Michigan had. the option of continuing the lease or terminating it.
Third-party defendant Wash Wagon of Colorado then contracted with defendant Metro Construc*536tion Systems, Inc. (Metro), to convert J & I’s building to a wash facility. Metro performed work totalling $23,749. Wash Wagon of Michigan paid $17,749, leaving a balance due of $6,000. Wash Wagon of Colorado then contracted with Metro for more improvements totalling $15,366.76. This bill was not paid.
After the sole payment, Metro gave J & I a waiver of lien for the amount paid. Metro did not, however, notify J & I that it intended to claim a mechanics’ lien on J & I’s property for building the truck wash. Later, Metro sent J & I a statement of account and lien; this statement was recorded with the register of deeds.
Wash Wagon of Michigan’s rent went unpaid and J &* *I sued Wash Wagon of Michigan to collect the rent. A default judgment was entered. J & I also sued Metro to quiet title. J & I moved for summary judgment. From the Wayne County Circuit Court’s grant of summary judgment to J & I, Metro appeals. We affirm.
Metro’s claims on appeal can be summarized into two issues. First, Metro claims that providing Wash Wagon of Michigan notice of its intent to claim a lien was sufficient to provide J & I with notice. Metro claims that the lease required Wash *537Wagon of Michigan to build a truck wash and that Wash Wagon of Michigan was therefore an agent of J & I. This contention is without merit. It is true that a landlord may be bound by a lien for a tenant’s improvements if the improvements are required by the lease. Rowen & Blair Electric Co v Flushing Operating Corp, 399 Mich 593; 250 NW2d 481 (1977). This is because Michigan’s mechanics’ lien act allows a lien "to the extent of the interest of the owner, part owner, or lessee with whom the claimant [lienor] has contracted”. Rowen & Blair, supra, p 600. By requiring the lessee to make the improvements, the lessor has appointed the lessee as an agent. Rowen & Blair, supra, p 600-601. But because the mechanics’ lien statute is based on contractual relationships, a landlord who permits but does not require improvements has not created a principal-agent relationship with the tenant. Sewell v Nu Markets, Inc, 353 Mich 553, 558-559; 91 NW2d 861 (1958).
Here, Wash Wagon was not required by J & I to make improvements. If the improvements could not be made, Wash Wagon, and not J & I, could terminate the contract. Thus, Metro’s contract with Wash Wagon was not with Wash Wagon as an agent for J & I. The trial court did not err in ruling this as a matter of law.
Metro’s second claim is that the trial court erred in holding that a lienor must strictly comply with the notice requirements of the mechanics’ lien act. Sending the statement of account and lien, Metro argues, was substantial compliance with the statute’s required notice of intention to claim a lien. J & I properly argues that substantial compliance is not enough. "The statute, being in derogation of *538common law, must be strictly construed to the point the lien attaches but, thereafter, because of its remedial character, a liberal construction may be indulged.” Renshaw v Samuels, 117 Mich App 649; 324 NW2d 117 (1982); Vorrath v Garrelts, 35 Mich App 463, 466; 192 NW2d 547 (1971). The circuit court properly found that Metro did not strictly comply with the requirements of the statute when it did not send notice of intention to claim a lien to J & I. Plaintiff J & I was therefore entitled to summary judgment. The decision of the circuit court is affirmed.
Affirmed.