9.4 Contractor Business Practice: Estimating, Contracts, Insurance & Lien Law Compliance

Contractor Business Practice: Estimating, Contracts, Insurance & Lien Law Compliance

Technical mastery of heating, ventilation, and air conditioning engineering is only half the equation for a successful contracting enterprise. Thousands of technically proficient tradespeople obtain mechanical contractor licenses every year only to fail financially within their first two to three years of operation. Business failure rarely stems from an inability to diagnose a compressor or fabricate a transition duct; rather, it results from flawed job costing, fatal confusion between markup and gross margin, inadequate insurance coverage, non-compliant residential contracts, and failure to preserve statutory mechanics' lien rights. Operating a sustainable mechanical contracting business in Michigan demands rigorous financial discipline, comprehensive knowledge of state labor statutes, and strict adherence to commercial business laws.

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Job Costing Fundamentals & Labor Burden Mathematics

Job costing is the systematic accounting procedure of tracking, accumulating, and allocating all expenses associated with a specific contracting project. An accurate estimate establishes the financial foundation upon which selling prices, overhead recovery, and company profits depend.

The Three Core Elements of Total Job Cost

Every construction estimate is composed of three distinct cost categories:

1. Direct Materials & Equipment: The tangible physical goods incorporated permanently into the project. This encompasses major mechanical equipment (furnaces, condensing units, heat pumps, air handlers, boilers, chillers), raw installation materials (sheet metal ductwork, copper tubing, PVC venting, refrigerant, gas pipe, electrical disconnects, thermostats, registers, grilles), and consumable installation supplies (brazing rod, flux, mastic, tape, screws, nitrogen).
2. Direct Labor: The gross wages paid to field installers and service technicians for the actual physical hours spent on the jobsite performing productive installation or diagnostic tasks.
3. Direct Job Expenses: Direct non-labor, non-material project costs specifically attributable to that single job. These include municipal mechanical permit fees, crane or boom truck rental for rooftop unit placement, specialized core drilling subcontracts, equipment freight/delivery charges, and disposal or refrigerant reclamation fees.

The Anatomy of Labor Burden

A lethal mistake committed by novice contractors is calculating labor cost using only the technician's base gross hourly wage. If a technician is paid an hourly wage of $32.00 per hour, charging or costing that worker at $32.00 per hour guarantees severe financial loss. The true cost of an employee encompasses mandatory statutory taxes, insurance premiums, and employer-provided benefits collectively known as Labor Burden.

Labor burden components include:

• Mandatory Employer Payroll Taxes (Statutory):
  1. FICA (Federal Insurance Contributions Act): The employer must match the employee's federal payroll contributions at an exact rate of 7.65% of gross payroll (comprising 6.20% for Social Security up to the annual statutory wage base cap, plus 1.45% for Medicare, which is uncapped).
  2. FUTA (Federal Unemployment Tax Act): An employer-paid tax supporting federal unemployment administration. The standard net effective FUTA tax rate is 0.60% assessed on the first $7,000 of gross annual wages per employee.
  3. SUTA (Michigan State Unemployment Tax Act): Administered by the Michigan Unemployment Insurance Agency (UIA). Assessed on the Michigan taxable wage base ($9,500 as of 2026). State tax rates for new construction employers typically begin at a standard statutory rate (nominally 2.7% to 6.0%+) and fluctuate between 0.06% and 10.3% based on the employer's multi-year experience rating and history of unemployment claims.
• Mandatory Workers' Disability Compensation Insurance:
  • In Michigan, workers' compensation rates are categorized by risk classification codes published by the Workers' Compensation Rating Bureau.
  • HVAC sheet metal installation (Code 5538) and heating/refrigeration service (Code 5183) carry significant workplace hazard profiles, with typical insurance premiums ranging from 4.0% to 12.0%+ of gross wages, depending on the contractor's Experience Modification Rate (EMR).
• Non-Statutory Benefits & Paid Non-Productive Time:
  • Paid Time Off (PTO): Paid vacation (typically 2 weeks / 80 hours), paid sick leave, and standard paid legal holidays (6 to 8 days / 48 to 64 hours). In total, a typical full-time technician receives 128 to 160 hours of paid unworked time annually, reducing annual productive billable hours from 2,080 hours down to roughly 1,880 to 1,920 hours.
  • Health, Dental & Vision Insurance: Employer-subsidized health premiums frequently add $5,000 to $12,000+ annually per technician ($2.50 to $6.00+ per hour).
  • Retirement Contributions: Employer matching contributions to a 401(k) or SEP-IRA (typically 3% to 5% of gross wages).
  • Uniforms, Tool Allowances & Cell Phones: Employer-provided uniforms, safety footwear subsidies, and mobile communication devices ($0.75 to $1.50 per hour).

Comprehensive Labor Burden Numerical Derivation

Consider a licensed mechanical contracting enterprise employing an HVAC installer with the following annualized payroll parameters:

• Base Gross Hourly Wage: $34.00 per hour
• Total Paid Hours: 2,080 hours per year (gross annual wage: $34.00 × 2,080 = $70,720.00)
• Statutory FICA Match: 7.65% of $70,720.00 = $5,410.08
• FUTA (0.60% on first $7,000 = $42.00) plus SUTA (4.20% on $9,500 = $399.00): total = $441.00
• Workers' Compensation Insurance (Code 5183 at 6.5% of payroll): 0.065 × $70,720.00 = $4,596.80
• Employer-Paid Health Insurance: $6,800.00 per year
• Employer 401(k) Match (3% of gross wages): 0.03 × $70,720.00 = $2,121.60
• Paid Time Off (PTO - 120 hours unworked): 120 hrs × $34.00 = $4,080.00
• Total Annual Labor Burden Expenses: $5,410.08 + $441.00 + $4,596.80 + $6,800.00 + $2,121.60 + $4,080.00 = $23,449.48

$\text{Labor Burden Multiplier} = \frac{\text{Total Burden Expenses}}{\text{Gross Annual Wages}} = \frac{23,449.48}{70,720.00} = 0.3316$

This yields a labor burden multiplier of 33.16%.

$\text{Fully Burdened Hourly Cost} = \text{Base Wage} \times (1 + \text{Burden Multiplier}) = 34.00 \times 1.3316 = 45.27\text{ dollars per hour}$

Estimating Takeaway: In the mechanical trades, labor burden universally adds 25% to 45%+ onto base hourly wages. If an estimator bids jobs calculating labor at the $34.00 base rate instead of the $45.27 fully burdened rate, the business leaks $11.27 in unrecovered payroll cash for every field hour worked.

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Overhead Allocation Methods

Overhead comprises all indirect operational expenses required to sustain the contracting business that cannot be directly attributed to a single construction job:

• Facility Expenses: Rent or commercial mortgage on the sheet metal fabrication shop, yard storage, property taxes, building insurance, heating/cooling utilities, shop maintenance.
• Administrative & Executive Payroll: Salaries for office managers, customer dispatchers, estimators, accountants, warehouse coordinators, and the qualifying contractor of record.
• Vehicle Fleet Expenses: Monthly commercial lease payments, depreciation, commercial auto insurance, vehicle maintenance/oil changes, fuel cards, and registration fees.
• Marketing & Legal Expenses: Website hosting, digital search advertising, vehicle lettering/wraps, CPA fees, legal retainers, software licensing (estimating, CRM, dispatch platforms), and LARA triennial license renewal fees.

Allocation Techniques

Contractors allocate overhead across project bids using one of two primary accounting methods:

1. Percentage of Direct Costs: Total projected annual overhead expenses divided by total projected annual direct costs (materials, burdened labor, and direct expenses). For example, if a firm projects $300,000 in annual overhead and $1,000,000 in direct job costs, the overhead rate is 30%. Every estimate multiplies total direct job costs by 30% to establish overhead recovery.
2. Billable Hourly Overhead Rate (The Dual-Rate Method): Total projected annual overhead divided by the total projected annual billable field labor hours. For example, if 4 field technicians each produce 1,800 billable hours (7,200 total hours) and company overhead is $288,000, the overhead allocation is $40.00 per billable hour ($288,000 divided by 7,200 hrs). When bidding, the estimator adds $40.00 of overhead for every estimated labor hour.

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Pricing Mathematics: Markup vs. Margin

The single most pervasive mathematical error in contracting business management is confusing Markup with Gross Margin. While both concepts measure the relationship between costs, selling prices, and gross profit, they utilize entirely different denominators. Conflating the two guarantees that a contractor will fall short of their profit targets and potentially operate at a severe net financial loss.

Core Mathematical Definitions

$\text{Gross Profit} = \text{Selling Price} - \text{Total Job Cost}$

$\text{Gross Margin} = \frac{\text{Gross Profit}}{\text{Selling Price}} \times 100$

$\text{Markup} = \frac{\text{Gross Profit}}{\text{Total Job Cost}} \times 100$

• Gross Margin: Measures gross profit as a percentage of the Selling Price (the Top Line Revenue). Margin represents the portion of every incoming revenue dollar that remains after paying for direct costs, which is available to pay overhead and generate net profit.
• Markup: Measures gross profit as a percentage of the Total Job Cost.

The Fatal Estimating Trap: Numerical Walkthrough

Consider an HVAC contractor bidding on a complete residential heat pump conversion. The estimator calculates total job costs (direct equipment, materials, fully burdened labor, and permit) at exactly $10,000.00.

• The company's annual financial plan mandates an Overhead Recovery of 20% and a Target Net Profit of 10%, requiring a total Target Gross Margin of 30%.

The Flawed Approach: Applying a 30% Markup

The contractor mistakenly assumes that a "30% margin" is achieved by adding a 30% markup to the cost:

$\text{Selling Price}_{\text{flawed}} = \text{Total Cost} \times (1 + 0.30) = 10,000.00 \times 1.30 = \$13,000.00$

• The contractor sells the job for $13,000.00 and earns a gross profit of: $13,000.00 - $10,000.00 = $3,000.00.
• Now, let us calculate the actual Gross Margin achieved:

$\text{Actual Margin} = \frac{\text{Gross Profit}}{\text{Selling Price}} = \frac{3,000.00}{13,000.00} = 0.2308$

This calculation yields an actual margin of only 23.08%.

• The Devastating Outcome: The contractor targeted a 30.00% gross margin but only achieved 23.08%. Because company overhead strictly absorbed 20.00% of revenue, the remaining net profit was only: 23.08% - 20.00% = 3.08% instead of the planned 10.00%!

The Correct Approach: Pricing for Margin

To achieve a true target gross margin, the selling price must be derived by dividing the total cost by the complement of the desired margin:

$\text{Selling Price} = \frac{\text{Total Job Cost}}{1 - \text{Desired Margin}}$

Substituting our $10,000.00 cost and 30% (0.30) target margin:

$\text{Selling Price} = \frac{10,000.00}{1 - 0.30} = \frac{10,000.00}{0.70} = \$14,285.71$

• Verification of Correct Margin:
  • Gross Profit: $14,285.71 - $10,000.00 = $4,285.71
  • Actual Margin Achieved: 4,285.71/14,285.71 = 0.3000 (representing 30.00%).
• Comparison: By using markup instead of margin pricing, the contractor underpriced the job by $1,285.71 ($14,285.71 - $13,000.00), forfeiting over 70% of their net company profit on that single installation.

Conversion Formulas Between Markup and Margin

To switch between markup (M_u) and margin (M_g) algebraically:

$M_u = \frac{M_g}{1 - M_g} \quad \text{and} \quad M_g = \frac{M_u}{1 + M_u}$

• To achieve a 30% Margin: M_u = 0.30 / (1 - 0.30) = 0.30 / 0.70 = 0.4286 → 42.86% Markup is required.
• To achieve a 40% Margin: M_u = 0.40 / (1 - 0.40) = 0.40 / 0.60 = 0.6667 → 66.67% Markup is required.
• To achieve a 50% Margin: M_u = 0.50 / (1 - 0.50) = 0.50 / 0.50 = 1.0000 → 100.0% Markup is required.

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Contracts, Change Orders & Consumer Protection

Contracts define the legal relationship between the mechanical contractor, project owners, general contractors, and equipment suppliers. Verbal agreements lead directly to payment disputes, uncollectible balances, and litigation.

Essential Contract Provisions for HVAC Installations

A comprehensive mechanical installation contract must explicitly detail:

1. Detailed Scope of Work: Specific listing of every component being installed, including exact manufacturer brand names, model numbers, AHRI certified efficiency ratings (SEER2, HSPF2, AFUE), heating/cooling capacities, duct layout specifications, and electrical connections.
2. Exclusions: Clear listing of tasks not included in the contract price (e.g., structural roof framing reinforcement, line-voltage panel upgrades, hazardous asbestos/vermiculite abatement, sheetrock cutting/patching, painting).
3. Payment Schedule: Clearly defined financial milestones (e.g., 10% deposit upon contract signing, 40% upon equipment delivery to site, 40% upon substantial completion/rough-in, 10% final retainage upon final mechanical inspection sign-off).
4. Site Access and Concealed Conditions: Clauses allocating financial responsibility to the owner if hidden structural defects, dry rot, rotted framing, or unmapped subterranean utilities are discovered during execution.
5. Workmanship Warranty: The standard industry and legal baseline in Michigan is a 1-year warranty on installation workmanship, covering defects in installation labor. Equipment components are covered under separate manufacturer parts warranties.

The Mandatory Written Change Order Rule

Project modifications frequently occur when an owner requests an upgraded digital communicating thermostat, duct relocation, or additional supply registers. Under Michigan construction law:

• No Extra Work Without Written Agreement: Any alteration or deviation from the original contract scope involving an increase or decrease in cost or project duration must be executed in a formal Written Change Order.
• Required Change Order Elements: The change order must state the detailed modification to the scope, the exact adjustment to the total contract price (or labor-and-material billing terms), the impact on the completion schedule, and must be signed and dated by both the contractor and the owner prior to the commencement of the extra work.
• Legal Hazard: Performing verbal change orders based on an owner's casual jobsite request almost invariably results in the owner refusing to pay the extra charges upon final invoice, leaving the contractor with no enforceable legal remedy.

Michigan Home Solicitation Sales Act (PA 227 of 1971)

When an HVAC contractor sells residential replacement systems directly to homeowners inside their homes, the transaction is governed by the Michigan Home Solicitation Sales Act (Public Act 227 of 1971, MCL 445.111 to 445.117).

• Statutory Threshold: Applies to any consumer sale of goods or services exceeding $25.00 where the contract is solicited, negotiated, or signed at the buyer's private residence.
• The Mandatory 3-Business-Day Right of Rescission: Under MCL 445.112, the homeowner has the absolute, unconditional legal right to cancel the transaction at any time prior to midnight of the third business day after the date the contract was executed.
• Required Disclosure Notice: The contract must contain a conspicuous statutory notice printed in boldface type (minimum 10-point font) directly adjacent to the buyer's signature space:

"You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right."

• Duplicate Cancellation Form: The contractor must provide the buyer with a complete, detachable duplicate form titled "NOTICE OF CANCELLATION" detailing the exact mailing instructions and statutory rescission deadlines.
• Severe Legal Consequence: Under MCL 445.113, if the contractor fails to provide the required statutory notice of cancellation, the buyer's right to cancel never expires! The homeowner could theoretically cancel months later after the equipment is fully installed, demanding a complete refund of all monies paid, and the contractor would be prohibited from recovering mechanical equipment if doing so damages real property.
• Emergency Repair Exemption (MCL 445.111(a)): The 3-day right of rescission does NOT apply if all three of the following conditions are met:
  1. The buyer initiates the contact requesting the contractor to visit the home;
  2. The goods or services are immediately necessary to remedy a bona fide emergency affecting health, safety, or real property (e.g., a cracked furnace heat exchanger leaking CO in freezing sub-zero winter weather);
  3. The buyer furnishes the contractor with a separate, dated, handwritten statement describing the emergency and expressly waiving the 3-day right to cancel.

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Commercial Insurance & Worker Protection Mandates

Operating an active mechanical contracting business exposes the owner to severe financial and legal liabilities. Comprehensive insurance coverage is mandatory for licensure, commercial lease compliance, and corporate survival.

Commercial General Liability (CGL) Insurance

Commercial General Liability (CGL) protects the contracting enterprise against third-party claims for bodily injury, property damage, and personal injury arising out of operations:

• Premises and Operations Coverage: Covers damages occurring while work is actively being performed on the jobsite (e.g., an apprentice drops a piece of heavy sheet metal and shatters an owner's luxury tile floor, or a brazing torch ignites nearby cellulose wall insulation).
• Products and Completed Operations Coverage: Protects against catastrophic property damage or bodily injury that manifests after the project is completed and turned over to the owner (e.g., a rotted condensate drain line leaks over several months, collapsing a finished ceiling and causing $80,000 in water damage, or a loose electrical connection causes an attic air handler to catch fire six months after installation).
• Typical Industry Limits: Most general contractors and commercial property managers require mechanical subcontractors to carry minimum CGL policy limits of $1,000,000 per occurrence / $2,000,000 general aggregate, plus a commercial umbrella/excess liability policy ($1,000,000 to $5,000,000).

Michigan Workers' Disability Compensation Act (PA 317 of 1969)

In Michigan, employee workplace injury compensation is regulated under the Worker's Disability Compensation Act of 1969 (Public Act 317 of 1969, MCL 418.101 et seq.).

Mandatory Employer Coverage Thresholds (MCL 418.115)

Every private employer operating in Michigan must maintain workers' disability compensation insurance coverage if the enterprise meets either of the following statutory thresholds:

1. All private employers who regularly employ 3 or more employees at one time (including part-time employees).
2. All private employers who employ less than 3 employees, if at least 1 of them is a full-time employee who has been regularly employed for 35 or more hours per week for 13 or more weeks during the preceding 52 weeks.

Legal Penalties for Uninsured Operation (MCL 418.641 & 418.645)

Operating without mandatory workers' compensation insurance carries severe civil and criminal penalties:

• Injunctive Shutdown: Under MCL 418.645, the state may obtain an emergency circuit court injunction immediately prohibiting the contractor from conducting any business operations until insurance is secured.
• Civil Fines: Assessment of civil fines of $1,000.00 per day for each day the employer operates uninsured.
• Criminal Misdemeanor: An uninsured employer is guilty of a misdemeanor punishable by a criminal fine of up to $1,000.00, imprisonment for not more than 6 months, or both.
• Loss of Common Law Defenses: An uninsured employer sued by an injured worker is stripped of all traditional common-law legal defenses (contributory negligence, fellow-servant rule, and assumption of risk), exposing the corporate officers to unlimited personal financial liability for medical expenses and lost wages.

Commercial Surety Bonds vs. Insurance

Candidates must understand the critical legal distinction between commercial insurance and surety bonds:

• Insurance (Two-Party Contract): A risk-transfer agreement between the insured contractor and the insurance carrier. If a covered loss occurs, the insurer pays the claim and absorbs the financial loss without seeking reimbursement from the contractor (protects the contractor).
• Surety Bond (Three-Party Guarantee):
  • Principal: The mechanical contractor obtaining the bond.
  • Obligee: The project owner, municipality, or state agency requiring the bond.
  • Surety: The financial institution/bonding company issuing the financial guarantee.
  • Mechanism: The bond guarantees that the contractor will faithfully perform contract obligations, comply with building codes, or pay subcontractors. If the contractor defaults, the surety pays the obligee—but the surety then legally demands full financial indemnification from the contractor. A bond protects the obligee, never the contractor!

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The Michigan Construction Lien Act (PA 497 of 1980)

Non-payment by general contractors or property owners is a constant threat in the construction industry. To provide tradespeople with statutory security for labor and materials furnished to improve real property, the Michigan Legislature enacted the Michigan Construction Lien Act (Public Act 497 of 1980, MCL 570.1101 to 570.1305). A construction lien attaches directly to the legal title of the improved real estate, preventing the owner from selling, transferring, or refinancing the property without satisfying the contractor's debt.

Preserving and enforcing a valid construction lien requires absolute, unyielding adherence to strict statutory timelines and document service rules. Missing a single statutory deadline by a single day forfeits the lien permanently.

[Michigan Construction Lien Act Statutory Timeline]

Project Start: Owner records Notice of Commencement (NOC)
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  v (Within 20 Days of First Labor/Materials Furnished)
Subcontractor serves Notice of Furnishing (NOF) on Owner Designee & GC
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  v (During Construction Billing)
Contractor submits Sworn Statements (MCL 570.1110) & Lien Waivers
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  v (Within 90 Days of LAST Labor/Materials Furnished)
Contractor records Claim of Lien with County Register of Deeds
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  v (Within 15 Days of Recording Claim of Lien)
Contractor serves recorded Claim of Lien on Owner / Designee
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  v (Within 1 Year of Recording Claim of Lien)
Contractor files Judicial Foreclosure Lawsuit in County Circuit Court

Step 1: Notice of Commencement (MCL 570.1108 & 570.1108a)

• Owner Obligation: Before any physical construction commences on a jobsite, the property owner or lessee must record a Notice of Commencement (NOC) in the office of the Register of Deeds in the county where the real property is located, and post a copy conspicuously at the jobsite.
• Content: Identifies the legal description of the property, the owner's legal name and address, the owner's designated agent (Owner's Designee), and the general contractor.
• Contractor Request: If an HVAC subcontractor or supplier submits a written certified request for a copy of the Notice of Commencement, the owner, lessee, or general contractor must provide a copy along with a blank Notice of Furnishing within 10 days of receiving the request. Failure to provide the NOC within 10 days extends the subcontractor's Notice of Furnishing deadline.

Step 2: Notice of Furnishing (MCL 570.1109)

• Purpose: Informs the property owner and general contractor that an HVAC subcontractor, laborer, or material supplier is providing labor or materials to the project, placing the owner on legal notice of potential lien claimants.
• Who Must Serve: Any subcontractor, sub-subcontractor, or supplier who does not have a direct contract with the property owner (parties in direct privity of contract with the owner are exempt from serving an NOF, as the owner already knows them).
• The 20-Day Rule: The Notice of Furnishing must be served on the Owner's Designee and the general contractor within 20 days after first furnishing labor or materials to the jobsite.
• Late Service Penalty: If a subcontractor serves the NOF late (e.g., 45 days after first work), the lien rights for the initial 25 days of work are permanently forfeited; late service only preserves lien rights for labor and materials furnished after the date of actual service.

Step 3: Sworn Statements & Lien Waivers (MCL 570.1110 & 570.1115)

• Sworn Statement (MCL 570.1110): An itemized, notarized legal document executed under oath by the contractor. It lists every subcontractor, supplier, and laborer employed on the job, the contract amount, amounts previously paid, amounts currently due, and remaining balances. A contractor has no legal right to demand progress payments or final payment until a Sworn Statement is provided to the owner.
• Lien Waivers (MCL 570.1115): Signed receipts relinquishing lien rights in exchange for payment. Michigan recognizes four distinct statutory forms:
  1. Partial Conditional Waiver: Waives lien rights for a specific progress billing period, conditioned upon the check clearing the bank.
  2. Partial Unconditional Waiver: Waives lien rights unconditionally for work performed through a specific date (used only after payment has cleared).
  3. Full Conditional Waiver: Waives all remaining lien rights on the entire project, conditioned upon receipt and clearance of the final contract payment.
  4. Full Unconditional Waiver: Completely and permanently extinguishes all lien rights against the property.

Step 4: Recording & Serving the Claim of Lien (MCL 570.1111 & 570.1112)

If payment is wrongfully withheld, the contractor must preserve their lien through county recording:

• The 90-Day Recording Deadline (MCL 570.1111): The Claim of Lien, verified by affidavit, must be formally recorded in the office of the Register of Deeds in the county where the improved property is located within 90 days after the date the claimant last furnished labor or materials under the contract.
• Warranty Work Exception: Michigan courts hold strictly that performing minor warranty repairs, corrective punch-list items, or post-installation service callbacks does NOT extend or restart the 90-day recording window! The 90-day clock begins on the date substantial contract work was completed.
• The 15-Day Service Mandate (MCL 570.1112): Within 15 days after recording the Claim of Lien with the county, the contractor must serve a true copy of the recorded lien, together with the recording stamp, upon the owner or the owner's designee via certified mail (return receipt requested) or personal hand delivery. Proof of service must be executed and preserved.

Step 5: Commencing Foreclosure Proceedings (MCL 570.1117)

• The 1-Year Statute of Limitations: Recording a Claim of Lien clouds the property title, but it does not automatically force payment. To enforce the lien, the contractor must file a formal judicial foreclosure complaint in the Michigan Circuit Court in the county where the property is situated.
• Strict 1-Year Deadline: Foreclosure proceedings must be commenced within 1 year from the date the Claim of Lien was recorded.
• Automatic Extinguishment: If a foreclosure lawsuit is not filed within exactly 1 year of recording, the construction lien expires automatically by operation of law and becomes completely void and unenforceable. Once expired, the lien cannot be renewed or refiled.