Late Fees on Invoices in Michigan
What Michigan contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
5% above the federal funds rate; contracts may specify higher
Small Claims Limit
$6,500
Small Claims Court (District Court)
Mechanics Lien Deadline
90 days from the last day of furnishing
Michigan Prompt Payment Act
Michigan Prompt Payment Act, MCL § 125.1561 et seq.
Michigan requires payment within 30 days for state construction contracts. Private contracts follow the agreed terms, with mechanics lien rights as enforcement.
Late fee rules for Michigan invoices
Michigan allows contractual late fees that are reasonable. The Construction Lien Act provides additional remedies for construction debts.
Michigan's legal interest rate for judgments is 1% above the 5-year Treasury rate. Contract rates can be higher for commercial transactions.
Important disclaimer
This page provides general information about Michigan late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in Michigan.
Demand letters and mechanics liens in Michigan
Michigan requires a Sworn Statement and a Notice of Furnishing for lien rights. A demand letter is not required but is standard practice.
Mechanics lien deadline: 90 days from the last day of furnishing. A Notice of Furnishing must be served within 20 days of first furnishing (for subs).
Sample late fee clause for Michigan invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (5% above the federal funds rate; contracts may specify higher maximum per Michigan law) will be applied to all balances remaining unpaid after the due date. Pursuant to the Michigan Construction Lien Act (MCL § 570.1101 et seq.), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $6,500 in Small Claims Court (District Court)), and referral to collections.”
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Start Free TrialFrequently asked questions — Michigan
What is the maximum late fee I can charge on an invoice in Michigan?▾
In Michigan, Michigan's legal interest rate for judgments is 1% above the 5-year Treasury rate. Contract rates can be higher for commercial transactions. Always disclose late fee terms in your contract or invoice before work begins.
Does Michigan have a prompt payment act?▾
Yes. Michigan requires payment within 30 days for state construction contracts. Private contracts follow the agreed terms, with mechanics lien rights as enforcement.
What is the small claims court limit in Michigan?▾
The small claims court limit in Michigan is $6,500. Claims are filed in Small Claims Court (District Court). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Michigan?▾
In Michigan, 90 days from the last day of furnishing. A Notice of Furnishing must be served within 20 days of first furnishing (for subs).
Do I need to send a demand letter before filing a lien in Michigan?▾
Michigan requires a Sworn Statement and a Notice of Furnishing for lien rights. A demand letter is not required but is standard practice.