The United States Bankruptcy Court for the Western District of Michigan recently held that Michigan does not recognize a common law landlord's lien on the personal property of tenants for unpaid rent. (In re Kentwood Pharmacy, L.L.C.)
However, the Court agreed that a landlord may be able to obtain a lien if there is a provision in the lease giving the landlord a lien on the tenant's personal property. For the lien to be effective, the landlord must file a financing statement under Article 9 of the Uniform Commercial Code.
Accordingly, landlords who want to take a lien on their tenant's personal property to secure payment of rent should include language in the lease granting the landlord a lien on the tenant's personal property, and should follow up by recording a financing statement.© 2013 Varnum LLP