The special tools lien act

December 1 By Ben Zainea The Special Tools Lien Act, a Michigan statute enacted just a few years ago, created new lien rights with respect to tools used in the manufacture of metal products.

With the Special Tools Lien Act, effective June 27, , the Michigan Legislature created lien rights in favor of special tool builders, defined by the Act as entities who design, develop, manufacture or assemble special tools.

Special tools are defined by the Act as any tools, dies, jigs, gauges, gauging fixtures, special machinery, cutting tools or metal castings. The Legislature also created lien rights in favor of entities who use special tools as part of their manufacturing process, defined by the Act as end users. Under this Act, in order to claim a lien on a particular tool or die which it fabricates, a special tool builder must follow two simple steps.

First, the special tool builder must permanently record its name, street address, city and state on the tool or die. Second, the special tool builder must file a UCC financing statement with the State of Michigan evidencing the lien.

If these steps are followed correctly, the special tool builder will possess a lien until paid in full the amount that a customer owes for the fabrication, repair or modification of each tool and die. If the amount is not paid in a timely manner, and if the special tool builder complies with certain notice requirements set forth in the Act, the special tool builder would potentially be able to foreclose on the lien and repossess the tool or die through a relatively swift claim and delivery lawsuit.

Adam Ratliff. Homayune Ghaussi. Katherine Pullen. Michael Brady. Alan Rogalski. Jeff Segal. Mary Bonnema. Mary Jo Larson. Jennifer Watkins. Brian Wassom.

Lisa Zimmer. Steve Palazzolo. Nate Steed. Tom Manganello. Emily Cantor. Lance Zoerhof. Ryan Grondzik. October 08, Many toolmakers and moldmakers have taken advantage of the enhanced rights afforded to them under the statutes to obtain a non-possessory lien on the tools and molds that they fabricate for their customers. This is an important requirement of both statutes. If you etch your name and street address directly onto the tool surface, you should be fine. Same with riveting a plaque with your name and street address onto the tool.

This may sound silly, but in order to file a UCC-1 financing statement, you need to know the exact legal name of your customer.