DLEG - Frequently Asked Questions

Q: When is a license required as a Residential Builder or Maintenance & Alteration Contractor?

A: In general, a person who contracts with a property owner to do residential construction or remodeling on a project whose total value is $600 or more, including material and labor, is required to be licensed as either a Residential Builder or a Maintenance and Alteration Contractor.

Q: What's the difference between a "Residential Builder" license and a "Residential Maintenance & Alteration Contractor" license?

A: The Residential Builder may build a new home from the ground up or may do any kind of repairs. The builder may contract for the whole job, but will have to subcontract for plumbing, electrical, and mechanical (heating, ventilation, air conditioning) work.

The Residential Maintenance and Alteration (M&A) Contractor is licensed to perform only specific trades and services and may accept contracts only in the services they are licensed for (whether or not the building is new construction or remodeling).

Each residential builder licensee receives a wall license and a pocket card showing that he or she is properly licensed. For the residential maintenance and alteration contractor, the pocket card contains only a letter code representing the trade or trades in which that contractor is licensed. The M&A trades and their equivalent letter codes are:

A: Generally we suggest you look at the definition of a Residential Builder and the list of specialty trades for a Residential Maintenance and Alteration Contractor to see what is definitely required to be licensed. You may wish to review Article 24 of the Occupational Code and read sections 339.2401, 339.2403, and 339.2404.

However, over the years some specific services have been removed from the licensing law or rules. Here is a basic list; call the Builders Unit at 517-241-9288 for items not shown.

New construction/remodeling of homes, apartment buildings, condominiums, townhouses, etc.

Q: How do I get licensed as a residential builder or maintenance & alteration contractor?

A: The first step in becoming licensed in Michigan as a Residential Builder or Residential Maintenance & Alteration Contractor is to complete 60 hours of approved prelicensure education prior to submitting a license application to the Builders Unit or taking the required examination. All prelicensure education courses must be approved by the Department. A list of approved courses is available on the Builders website at www.michigan.gov/builders under the section called "Spotlight".

The 60 hours of approved prelicensure courses must include at least six (6) hours in each subject below:

8) The rest of the 18 hours may come from other topics on the approved course list.

Once the Department receives the application, it will be reviewed to ensure that the applicant meets all licensing requirements. The requirements for licensure include: 1) 60 hours of approved prelicensure education courses; 2) be at least 18 years of age; 3) be financially stable; 4) be of good moral character; 5) submit any required documentation requested by the Department; and 6) pass the required examination.

An applicant must meet all requirements for licensure before receiving approval from the Department to take the examination required for a Residential Builder or Maintenance & Alteration Contractor license. Once the applicant receives approval from the Department to take the examination, the applicant may contact PSI Services LLC, the exam provider, at 1-800-733-9267, or go to their website at www.psiexams.com , to register for the examination.

A.: An individual who for a salary, wage, fee, percentage, commission, or other consideration, sells or attempts to sell, negotiates or attempts to negotiate, solicits for or attempts to solicit for, obtains or attempts to obtain a contract or commitment for, or furnishes or attempts or agrees to furnish, the goods and services of a Residential Builder or Residential Maintenance & Alteration Contractor is required to be licensed as a Salesperson.

There is a separate license and examination for a builder salesperson. This is not the same license as a real estate salesperson's license; the real estate salesperson works for a real estate broker, selling properties listed with that broker. The builder salesperson sells the construction projects and completed homes of a Residential Builder or Residential Maintenance & Alteration Contractor. A licensed builder (or the qualifying officer of a corporate builder licensee) may become a salesperson for another company, but they do not need a salesperson license to sell for themselves.

Q: How do I get licensed as a Residential Builder or Residential Maintenance & Alteration Contractor Salesperson?

The first step in obtaining a license as a salesperson is to contact PSI Services LLC at 1-800-733-9267, or visit their website at www.psiexams.com , to register for the examination. Once an applicant has passed the salesperson examination, PSI will mail a license application with pre-printed examination information to the applicant. The salesperson application must then be completed and submitted to the Builders Unit by the salesperson and the employing builders or contractors.

Q: How do I transfer my Salesperson's license to a different Residential Builder or Residential Maintenance & Alteration Contractor?

A.: A salesperson may work for only one licensed Residential Builder or Residential Maintenance & Alteration Contractor at a time. If a salesperson is discharged or otherwise terminates employment with a builder or contractor under whom he or she is licensed, the employer shall return the wall license, and the salesperson shall return the identification card to the Builders Unit within five days from the date of discharge or termination. If a licensed salesperson transfers employment from the builder or contractor under which he or she is presently licensed to a new employer, the salesperson and new employer shall submit to the Builders Unit a Salesperson Transfer Application , which may be obtained on the Builders website at www.michigan.gov/builders under "Forms & Publications".

Q: Is a license required for commercial building (offices, schools, factories, etc.)?

A: Michigan does not have a law regulating commercial builders, sometimes referred to as "general contractors". Licensing is required for residential work only, including combination residential and commercial structures, such as homes, apartment buildings, condominiums, townhouses, etc. For more complex non-residential or combination residential/commercial structures, the licensed architect or professional engineer will be the responsible licensee.

Q: Do you have advice on selecting and working with a home builder/remodeler?

A: The Builders web page at www.michigan.gov/builders has a section titled "Consumer Info" that contains information on selecting and working with a Residential Builder or Residential Maintenance & Alteration Contractor.

A: Complaints about licensed builders are handled by the Department's Bureau of Commercial Services Enforcement Division. You may contact the Enforcement Division at 517-241-9202, or visit the Builders website at www.michigan.gov/builders and click on "Enforcement & Complaints under "Consumer Info", to obtain a complaint form or learn more about the complaint process.

A: You may check to see if a builder is licensed on the Verify a License website at www.michigan.gov/licenselookup . The fastest way to find license information is to have the builder's license number, which is a ten-digit number beginning with 210; however, a search may be done by an individual's name, business name, etc. If the license is under the name of a sole proprietor, then you may perform a search by entering the license number, individual's personal name or assumed name. If the license is under the name of a corporation, limited liability company or partnership, the search must be made by entering the license number or business name. Telephone numbers are not in the database. You may also contact the Builders Unit at 517-241-9288 to verify whether a person or company is licensed.

A: The licensing law does not require a builder to offer a warranty. If a builder chooses to offer a warranty, homeowners should review the warranty carefully to see what is covered, what the homeowner's responsibilities are, and what the builder will do when notified of problems.

However, the licensing law does provide for a complaint period of 18 months, during which time a homeowner may file a complaint with the Department. Problems with the home must be verified by a building inspector, and the homeowner must have provided the builder an opportunity to make corrections. If a complaint results in a proven violation of the licensing law, the builder may be fined, ordered to make restitution, suspended, revoked, denied future licenses, reprimanded, etc. You may wish to read the licensing law that is available on the Builders website at www.michigan.gov/builders under the section called "Quick Links" for more information on specific violations or consult the Bureau's Enforcement Division website to review complaint information and obtain a complaint form.

Q: Is a Residential Builder or Residential Maintenance & Alteration Contractor required to carry insurance or be bonded?

A: The licensing law does not require a builder or contractor to have insurance or a bond. Insurance is usually required as a condition of obtaining a building permit from a city, village, or township. A homeowner may wish to require that the builder or contractor show proof of insurance before they sign a contract with the builder.

A: Not being licensed is a misdemeanor, a criminal violation of the law, specifically section 339.601 of the Michigan Compiled Laws. The Department's jurisdiction extends only to our licensees. To complain that someone is unlicensed, call your local police department, sheriff's department or the state police. They will need evidence that the person tried to act as a builder or contractor and will get from the Department proof that the person was not licensed. They will then take the information to the prosecutor's office for review and a possible criminal complaint.

Q: When is a Residential Builder or Residential Maintenance & Alteration Contractor license not required?

A: The Occupational Code lists several exemptions from the licensing law. Some of the more common exemptions are:

An owner of property, with reference to a structure on the property for the owner's own use and occupancy.

An owner of rental property, with reference to the maintenance and alteration of that rental property.

A subcontractor to a licensed builder, that is, a person other than a salesperson who engages solely in the business of performing work and services under contract with a residential builder or a residential maintenance and alteration contractor licensed under this article.

A person working on 1 undertaking or project by 1 or more contracts, the aggregate contract price for which labor, material, and any other item is less than $600.00. A license is required if the construction work is only a part of a larger or major operation (whether undertaken by the same or a different Residential Builder or Residential Maintenance & Alteration Contractor), or in which a division of the operation is made in contracts of amounts less than $600.00 to evade this act.

For the full text of the exemptions, you may wish to visit the Builders website at www.michigan.gov/builders and review Article 24 of the Occupational Code.

Q: I used to be licensed as a Residential Builder or Residential Maintenance & Alteration Contractor, but the license has expired. What do I do now?

A: If your license as a Residential Builder or Residential Maintenance & Alteration Contractor expired less than three years ago, call the Builders Unit for a "relicensure" application; you do not need to repeat the licensing examination. If it has been more than three years since you were licensed as a Residential Builder or Residential Maintenance & Alteration Contractor, you will need to complete 60 hours of approved prelicensure education courses before submitting a relicensure application and the prelicensure education reporting form to the Builders Unit.

Q: I used to be licensed as a Residential Builder or Residential Maintenance & Alteration Contractor Salesperson, but the license has expired. What do I do now?

A: If your license as a salesperson expired less than three years ago, call the Builders Unit for a "relicensure" application; you do not need to repeat the licensing examination. If it has been more than three years since you were licensed as a salesperson, you will need to retake the salesperson examination. Contact PSI Services LLC at 1-800-733-9267, or visit their website at www.psiexams.com , to register for the examination. Once you pass the required salesperson examination, PSI will send you a license application that must then be submitted to the Builders Unit.

A: A list of suggested study materials is included in the Candidate Information Bulletin that is available on PSI Services LLC's website at www.psiexams.com . PSI will send an applicant a free copy of the Laws & Rules for Builders once he or she registers for the examination. The source of the other materials is listed in the bulletin -- for some, there is only a small charge, others are more expensive. You might consult your public library to see if they have, or can borrow for you, the books suggested.

A: Please allow 4 to 8 weeks for processing of applications, particularly in the spring when many people want to go into the building business and licensees are renewing their licenses.

Q: I have a Residential Builder or Residential Maintenance & Alteration Contractor license in my own personal name, operating as a sole-proprietor. I'm now forming a corporation, limited liability company or partnership. What do I have to do to have the company licensed?

A.: The corporation, limited liability company or partnership is a new legal "person" and it must obtain its own license as a Residential Builder or Residential Maintenance & Alteration Contractor. When the company applies for a license, it will select a human being to be its "qualifying officer" -- the person who will assume responsibility for the company complying with the building laws and rules. The qualifying officer is required by law to hold an active license as an individual Residential Builder or individual Residential Maintenance & Alteration Contractor. The individual license will begin with 2101 or 2103 and it is separate from the company license. A corporation, limited liability company or partnership must maintain a company license, in addition to the qualifying officer holding an individual license. The qualifying officer may be an officer, director, member, partner, agent or employee of the company; they need not be an owner or shareholder. A Corporation, Limited Liability Company or Partnership Residential Builder or Maintenance & Alteration Contractor License Application may be obtained on the Builders website at www.michigan.gov/builders under "Forms & Publications" or you may call the Builders Unit at 517-241-9288 for an application.

Q: I have moved my business or changed my business name. How do I change my license information?

A: If you are changing the address on your license, you will need to submit a Request for a Name and/or Address Change form, which is available on the Builders website at www.michigan.gov/builders under "Forms & publications. For a fee of $10, we will change the address and send you a corrected license. If your license begins with 2101 or 2103, and you have an assumed name on your license, you will need to provide an updated copy of your Certificate of Assumed Name with the new business address on it from your county clerk's office where your business is located. If you are changing your address during renewal time (April-May of the year your license expires), you may change the address on the renewal application form. No additional fee is required.

If you are changing the name on your license, use the Request for a Name and/or Address Change form and submit the appropriate documents to support the name change.

For a change of your name (marriage, divorce, etc.), send a copy of the formal name change document (marriage license, divorce decree, etc.).

For a change of the "doing business as" name on an individual license, send a copy of the new "doing business as" certificate (Certificate of Assumed Name) from the county clerk.

For a corporation or limited liability company that is changing its name, send a copy of the amended articles of incorporation/organization showing that the name change has been filed with the Corporations Division.

If, however, you are an individual licensee and you have created a corporation, limited liability company or partnership, the company is a new legal "person" and must apply for its own license. The company must be licensed or it is considered unlicensed activity. Call the Builders Unit at 517-241-9288, or visit the Builders website at www.michigan.gov/builders under "Forms & Publications", to obtain a Corporation, Limited Liability Company or Partnership Residential Builder or Maintenance & Alteration Contractor License Application . The Residential Builder or Residential Maintenance & Alteration Contractor must also keep their individual license (license number will begin with 2101 or 2103) in active status as long as the individual will serve as the qualifying officer for a corporation, limited liability company or partnership.

Q: The qualifying officer has left our company. How do we get a new qualifying officer shown on our license?

A: There is a Qualifying Officer Change Application available on the Builders website at www.michigan.gov/builders under "Forms & Publications". Use this form if the new qualifying officer is currently licensed as a builder or contractor. The qualifying officer must be approved by the Department. The new qualifying officer must have an active individual Residential Builder or Residential Maintenance & Alteration Contractor license, a license beginning with 2101 or 2103, to serve as a qualifying officer for a corporation, limited liability company or partnership.

Q: Prelicensure education is required to obtain a license as a Residential Builder or Residential Maintenance & Alteration Contractor. How many hours are required?

A: The 60 hours of approved prelicensure courses must include at least six (6) hours in each subject below:

Business Management, Estimating, and Job Costing (6 hours);
Design and Building Science (6 hours);
Contracts, Liability, and Risk Management (6 hours);
Marketing and Sales (6 hours);
Project Management and Scheduling (6 hours);
The Michigan Residential Code (6 hours);
MIOSHA Construction Safety Standards (6 hours); and
The rest of the 18 hours may come from other topics on the approved course list.

All prelicensure education courses must be approved by the Department. To view approved list of prelicensure education courses, you may visit the Builders website at www.michigan.gov/builders under the section called "Spotlight".