What Are Michigan Contractors?
The Michigan Department of Licensing and Regulatory Affairs is responsible for the licensing and regulation of more than 700,000 occupational and health professionals in the state. These professionals include architects, pharmacists, real estate brokers and salespersons, as well as residential building, maintenance and alteration contractors like carpenters, masons, swimming pool construction contractors, and insulation installation and repair contractors. In Michigan, individuals or businesses that are directly involved in the construction, alteration, repair, maintenance, or improvement of real estate and real property for others are referred to as contractors. Any contractor that offers to do residential work that costs $600 or more in labor and materials is required to obtain a license from the state’s Department of Licensing and Regulatory Affairs.
Note that the Department of Licensing and Regulatory Affairs is not the only agency that regulates professionals in Michigan. One of such agencies is the State Bar of Michigan, which is the governing body responsible for over 35,400 attorneys in the state. Registration and membership with this body is mandatory for any attorney that wishes to practice law in Michigan.
Tips for Hiring a Contractor
Remodeling or building a home is a major investment and it is important to employ the right contractors for these types of projects. If you are planning to remodel your home, or even build a new home, then the following tips can help you avoid making a costly mistake:
- Get no less than two to three written estimates for the project and compare these estimates
- Get references from the contractor that you select. Make sure you contact these references and find out their opinions concerning the contractor
- Verify the contractor’s license, and make sure that the contractor is also properly insured and bonded.
- Find out the extent of your insurance coverage from your property insurer
- Get a written contract and make sure that it includes all verbal promises made by the contractor. This contract should also include contact details for the contractor, the contractor’s license number, a start and completion date for the project, a requirement that the contractor will obtain all the necessary permits for the project, a cost breakdown for the project, payment dates, and events that trigger your payment obligations
- Read the small print on any contracts that you want to sign. Properly review and understand all the terms of the contract and make sure that it contains no checkboxes or empty spaces that the contractor can modify without your knowledge or approval. It is always a good idea to retain the services of a competent attorney to help you with this review
- Do not pay the full cost of the project upfront. Limit any advance payments to one-third of the project’s total cost. You can make a second payment halfway through the project and a final payment once the project has been completed
- Always collect a receipt for any payments that you make. It is also advisable to make these payments through non-cash methods
- Ensure that the project has been properly completed to your satisfaction before making a final payment. Inspect the worksite, make sure that it has been properly cleaned up per the terms of your contract, that all subcontractors and suppliers have been paid, and that all liens have been waived
- Be aware of any arbitration clauses that may be contained in your contract. Note that even though clauses that mandate alternative dispute resolution procedures as a means of settling consumer-contractor disputes are common in contracts, some of these clauses may affect some of your consumer rights and remedies
- Keep good records of all paperwork and documents related to the project.
How to Search A Contractor's License in Michigan?
The public can verify a general or specialty contractor license in Michigan online on the website of the Department of Licensing and Regulatory Affairs (LARA). Users can lookup licensee information by querying the database using the contractor's name, business name, license type, license number, or city.
LARA is charged with licensing almost all professions in the state, including general and specialty contractors. Michigan general contractors are mandated to hold either a Residential Builders license or a Maintenance and Alterations Contractors license. Specialty contractors are to pursue a license through the Bureau of Construction Codes (BCC). Electrical contractors obtain license from the BCC Electrical Division, Fire suppression and HVAC contractor from the BCC, Mechanical Division, and Plumbers from the BCC, Plumbing Division. Note that commercial contractors are licensed at the local level in Michigan.
It is a misdemeanor to operate in Michigan without a license. According to the Michigan’s Occupational Code, unlicensed contracting is punishable by a fine of between $5,000 to $25,000, or a year imprisonment, or both. Subsequent violations are punishable by the same fine but an extended jail time.
How Much Does a Contractor Charge in
Michigan contractors charge an average of $55 -$110 an hour for their services. The total cost of hiring these contractors is primarily dependent on factors like the type of work that the contractor is required to perform, the complexity of performing this work, and the cost of the materials required for the work. Some average hourly rates of various Michigan contractors are listed below:
When hiring a contractor, it is always a good idea to get an attorney to review any contracts that you are given to ensure that they do not contain any terms or clauses that may be detrimental to you. The average cost of hiring an attorney in Michigan is $150 - $350. Some attorneys charge one-off flat fees to perform specified actions like drafting and reviewing a contract. This flat fee usually ranges from $50 - $300. Note that just like contractors, attorney fees are also dependent on several factors, which include the attorney’s level of experience and your location.
What Are Home Improvement
Scams in Michigan?
Hiring a residential building, maintenance, and alteration contractor always comes with the risk of getting yourself involved in a home improvement scam. This is because some contractors specifically set out to rip off unsuspecting homeowners by accepting payments for projects that they do not intend to properly execute.
Unfortunately, it is not possible to totally stop fraudulent contractors and other con-artists from carrying out home improvement scams. However, you can reduce the probability of becoming a victim of these scams by taking actions like ensuring that your contractor is properly licensed by the state’s Department of Licensing and Regulatory Affairs and not making spontaneous home repair decisions especially if these repairs are suggested by door-to-door solicitors. You should also never pay the full cost of a project before it has been completed to your satisfaction, and avoid making cash payments as much as possible. Always ask contractors questions like how long they have been in business, how many similar projects they have completed in the past year, and whether they will be hiring subcontractors. Finally, make sure that you get a detailed contract for any residential building, maintenance, alteration, or repair projects that you want to undertake. You should also strongly consider getting a competent attorney to help you review this contract before you sign it.
The Michigan Department of Licensing and Regulatory Affairs publishes annual disciplinary action reports that detail violations of the state’s Occupational Code committed by licensed contractors and the penalties that were levied against them. You can also make consumer complaints concerning home improvement scams to the Consumer Protection Division of the Michigan Attorney General’s Office online or by mailing a Consumer Complaint Form to:
- Consumer Protection Division
- P.O. Box 30213
- Lansing, MI 48909-7713
What are Common Home Improvement Scams in Michigan?
Michigan home improvement scams are mostly targeted at senior citizens residing in the state. However, this does not mean that these scammers do not target younger Michiganders. While it might be difficult to immediately ascertain whether or not a contractor is trying to fraudulently obtain money from you, there is a high probability that a contractor is fraudulent if the contractor exhibits more than one of the following signs:
- The contractor seeks you out. This is usually through door-to-door solicitations
- The contractor has an air of urgency, asking you to make immediate decisions
- The contractor utilizes high-pressure sales tactics
- The contractor insists on cash payments
- The contractor claims to have a good deal on extra or left-over materials from a previous job
- The contractor insists that work must start immediately
- The contractor asks you to pay for the project in advance
- The contractor initially offers to do a small job for a relatively good price then pitches more substantial and expensive work
- The contractor leaves the job incomplete or undone to go and get more help or additional materials
- The contractor shows up after a natural disaster
- The contractor claims to be FEMA-approved
- The contractor offers a free inspection and suddenly discovers a previously unseen problem in your home
- The contractor asks you to pull any required permits for the job
Recognizing the signs of a home improvement scam is not enough. It is also necessary for you to take certain precautionary measures to ensure that you do not become a victim of these scams. These measures include:
- Restrict your dealings to local contractors as much as possible
- Check the contractor’s credentials. This includes the contractor’s license, insurance, and bonding. You can authenticate Michigan contractor licenses online via the Department of Licensing and Regulatory Affairs verify a license portal. You can also contact the organizations that provided the contractor’s insurance and bonding to confirm their validity
- Do not allow door-to-door contractors and solicitors into your home
- Write down the contractor’s license plate numbers and vehicle description, as well as the names and description of any additional workers that may be involved in the project
- Insist on a written contract that properly details every aspect of the project. It is advisable to hire an attorney to help you draft or review this contract before you sign it
- Remember that you have the right to cancel certain contracts in Michigan after you have signed them. This includes contracts for sales or services that were solicited at your home and contracts in which you agree to make payments to contractors overtime for home improvement projects. Note that there are rules that come with these cancellation rights. For example, home solicitation cancellations only apply for purchased goods or services that are worth more than $25, and the cancellation must occur within three business days. Likewise, home improvement financing contracts must be canceled no later than 5:00 p.m. of the next business day after these contracts have been signed.
- Do not pay the full cost of a project before it is completed. There are no state laws that restrict the amount of money a contractor can ask for as an advance payment in Michigan. Nevertheless, it is always in your interest to restrict advance payments to one-third of the total cost of the project. You can schedule subsequent payments as the project progresses. You should also insist on collecting a receipt for each payment that you make
- Do not make cash payments and make sure that checks and money orders are made payable only to the contractor
- Make your final payment only after the project has been completed to your satisfaction and you have proof that any subcontractors and suppliers involved in the project have been duly paid
- Be wary of contractors that pitch repairs or projects that are clearly above your budget and then offer to connect you with a lender that they know. It is advisable to check with your bank or credit union for appropriate loan options if you decide to take one out to finance your project
On the 10th of May, 2021, the Michigan Attorney General’s Office reinforced its commitment to educating Michiganders on the dangers of home improvement scams and protecting them from these scams. This office’s Consumer Protection Division handles approximately 10,000 consumer complaints annually, and contractor-related complaints were listed amongst the top ten consumer complaints in Michigan for the years 2014, 2015, 2016, and 2017.
Michiganders that have been approached or swindled by fraudulent contractors can file a report with the state’s Attorney General’s Office online or submitting a completed Consumer Complaint Form via fax (517) 241-3771. The completed form can also be mailed to:
- Consumer Protection Division
- P.O. Box 30213
- Lansing, MI 48909-7713
Reports concerning licensed contractors can also be made to the Department of Licensing and Regulatory Affairs via email or by calling (517) 241-9309.
What are Disaster Scams in Michigan?
The aftermath of a disaster usually leaves affected homeowners emotionally, physically, and financially drained. Regardless of the type of disaster, whether it's from a fire, flood, or tornado, these affected homeowners typically want to commence repairs as soon as possible to regain a sense of normalcy. Unfortunately, fraudulent contractors and con artists take advantage of these homeowners' desperation to deceptively obtain money from them. Making informed and well-thought-out decisions in the aftermath of a disaster is your best defense against a disaster scam. While this might be somewhat difficult to do considering the recent trauma of surviving a disaster, it is important because it can potentially save you a lot of money that will be needed to put your affairs back in order. Listed below are ways that you can spot and avoid disaster scams in Michigan:
- Do not make rash decisions like rushing into hiring the first contractor that comes your way. Take out time to understand the situation and find out the extent of the damage to your home
- Be wary of contractors that approach you with offers of speedy repairs as long as you hire them immediately
- Get estimates from various contractors before selecting one
- Ignore contractors that claim to be FEMA-approved or claim to be FEMA inspectors and ask for money
- Get references from the contractor that you select for the job and contact them before signing any contracts with the contractor
- Ensure that any contractor that you hire to carry out work worth $600 or more is licensed by the Department of Licensing and Regulatory Affairs. Also make sure that this contractor is licensed and bonded, regardless of the cost of the project
- Get a written contract and make sure that it includes any promises made by the contractor concerning the project, an estimated start and end date for the project, and the total cost of the project
- Do not sign any contracts that you have not carefully reviewed or that contain terms and clauses that you do not fully understand. It is a good idea to get a competent attorney to help you review any contract that you are given
- Do not pay the full cost of the project upfront. Any advance payments that you make should not exceed one-third of the project’s total cost
- Do not make any payments with cash
- Report any suspected disaster scams to the Michigan Attorney General’s Office. You can make these reports online, by calling either (517) 335-7599 or (877) 765-8388, or by mailing a Consumer Complaint Form to:
- Consumer Protection Division
- P.O. Box 30213
- Lansing, MI 48909-7713
What are Common Legal
Work Scams in Michigan?
Legal work scams in Michigan refer to fraudulent schemes carried out by individuals pretending to be attorneys or other court officials to deceptively obtain money or sensitive personal information from unsuspecting Michiganders. Note that in some cases, these scams may be carried out by actual attorneys.
The most common type of legal work scam in Michigan is the fake debt collection scam. In this scam, a con artist contacts you and claims to be an attorney working to collect a debt on behalf of a client. The con artist then threatens to either have you arrested or drag you to court if you do not pay this debt immediately. In some cases, the con artist may even have personal information about you like your name, address, or Social Security Number, making the scam more believable. You can avoid falling for this scam by doing the following:
- Request a written debt validation letter that provides clear details of the debt that you allegedly owe
- Confirm whether the individual that contacted you is actually a licensed attorney through the Michigan State Bar’s attorney search webpage. If the individual claims to work for a government or law enforcement agency, then contact that agency to verify this claim.
- Never pay for any debts via wire transfers or pre-paid debit cards
- Report any legitimate debt collectors that employ tactics like claiming to be someone that they are not or threatening you with physical violence or jail to the Michigan Attorney General’s Office. You can also file a complaint with the Federal Consumer Financial Protection Bureau and the Federal Trade Commission.
Another common type of legal work scam in Michigan is the legal representation scam. This scam is typically targeted at licensed attorneys in the state and it has several variants that all involve the con artist pretending to be a potential client in order to obtain money or sensitive financial information from the attorney. One way that con artists do this is by requesting escrow services from an attorney for deals like the purchase of large items like excavation equipment and barges. The con artist sends a check for the alleged deal along with documents like escrow agreements, purchase agreements, and even a photo ID. Once the check has been deposited in a trust account, the con artist then asks the attorney to send proceeds of the deal before the check has cleared. Eventually, the check ends up bouncing. Attorneys can avoid becoming victims of legal representation scams by taking the following steps:
- Treating any emails from individuals that claim to be referred to them by the state’s bar referral services as suspicious. Attorneys that participate in the state’s attorney referral service program are directly notified by the State Bar of Michigan about potential client matches
- Be wary of clients that only reach out via email
- Being wary of clients that insist on receiving proceeds of a deal or settlement agreement before it is properly concluded
- Be on the lookout for emails that claim to be from the State Bar of Michigan and ask for gifts
- Avoid downloading attachments or clicking on links in unsolicited emails
Attorneys that believe that they have been targeted by legal work scammers are advised to contact the Michigan Cyber Command Center via email.
How Long Does It Take to Get a Contractor License in
The length of time it takes to process a license application and obtain a contractor's license in Michigan depends on the specific type of license that is required, examination schedules, and any available pre-licensing requirements. For example, applicants that wish to obtain residential builder and maintenance and alteration contractor licenses are required to complete 60 hours of approved pre-licensure education. Applicants can apply for licenses and also view the status of their applications via the LARA online platform. Queries concerning the licensing process can also be directed to (517) 241-9316.
How to Maintain Your License in Michigan
Residential builders and maintenance and alteration contractors are required to complete and report specified hours of continuing competency education during the three-year validity period of their licenses. The specific requirements for this continuing competency are dependent on when the contractor’s license was issued. Contractors that were licensed before January 1, 2009, are required to complete three hours of this education every three years. On the other hand, contractors that were licensed after January 1, 2009, are required to complete a total of 21 hours of continuing competency education within their first three years of licensure, an additional 21 hours during the second three years, and subsequently, three hours of this education during every three-year licensing cycle. Contractors that are unsure of their license issuance dates can verify it online via the LARA online platform. Contractors can also make amendments to their licenses like changing their registered addresses and phone numbers via this platform.
Unlike residential builders and maintenance and alteration contractors, Michigan attorneys are not required to complete any continuing legal education. However, attorneys in the state are required to report name, address, and other contact information updates to the State Bar of Michigan. These updates can be reported online via the bar’s member portal. Alternatively, updates can also be reported by completing a Name Change Request Form or a Member Contact Information and Preferences Form and submitting the completed form via email, via fax to (517) 372-1139, or via mail-in to:
- State Bar of Michigan
- Member Records
- 306 Townsend Street
- Lansing, MI 48933-2012
How to Renew a Contractor License in
Michigan contractor licenses are renewed every three years and these renewals are done online via the LARA online platform. Note that renewals cannot be done more than 90 days before the license’s expiration date. Contractors that fail to renew their licenses before the expiration date are typically offered a grace period of 60 days. However, these contractors may be charged a late renewal fee. On the other hand, contractors that fail to renew their licenses during this grace period will be required to apply for re-licensure. The requirements for re-licensure depend on the length of time that the contractor allowed the license in question to lapse. Contractors that apply for re-licensure 61 days to three months after the expiration date of their licenses will be required to be of good moral character, complete the re-licensure application, and pay any applicable fees. Contractors that let their licenses lapse for more than three years will also be required to meet these conditions as well as complete 60 hours of approved pre-licensure education and pass the current license examination.
Alternatively, attorneys in Michigan renew their licenses by paying an annual license fee. The license renewal process must be done online via the State Bar of Michigan’s member portal, and attorneys are advised to use the latest version of any browser except Internet Explorer. Note that although the license renewal process must be done online, attorneys are given payment options at the end of this process that includes paying the applicable fees through checks, money orders, or cashier’s checks made payable to “The State Bar of Michigan”.