SB-1273, As Passed House, December 14, 2006
SUBSTITUTE FOR
SENATE BILL NO. 1273
A bill to amend 1980 PA 299, entitled
"Occupational code,"
(MCL 339.101 to 339.2721) by adding section 2408.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2408. (1) A residential builder and a residential
maintenance and alteration contractor performing services within
the scope of their respective licenses involving alteration,
repair, or remodeling of a residential structure, the value of
which is more than $600.00, including materials and labor, shall
furnish the owner or his or her agent with a written contract or
written work order. The written contract or work order shall, at a
minimum, contain the total cost including materials and labor, any
charge for a written estimate, and the business name and street
address of the licensee. If the licensee does not have a business
address, the licensee shall supply his or her residential address.
(2) The department shall provide, or make available on its
website in a printable form, a pamphlet. The pamphlet shall list
all regulated trades, the telephone numbers of the department and
the construction lien fund, and the website addresses of the
department and the construction lien fund. The pamphlet shall
contain substantially the following in at least 12-point type or
font:
""HOME REPAIR AND REMODELING"
HOW TO FIND REPUTABLE BUILDERS AND REMODELERS
Get the names of builders or remodelers from:
Friends or neighbors who have had satisfactory work done.
Your local homebuilders association.
People at local home improvement centers, builder shows,
or open houses.
Local Yellow Pages list licensed builders who do business
in your community.
If your local association is affiliated with the Michigan
Association of Home Builders, all members should be licensed by the
state in order to be included on their roster.
MAKE SURE THEY ARE LICENSED
You should be aware that all contractors offering to do work
which totals $600 or more in labor and materials must be licensed
by the state.
A Residential Builders license allows a contractor to build a
complete residential structure and to do maintenance & alteration
(remodeling) work on a residential structure. A Maintenance &
Alteration license indicates that the holder has met requirements
for one or more of certain regulated trades.
The trades for which a maintenance & alteration contractor is
qualified to practice are listed on the license.
The holder's state license must be displayed in the place of
business, and all contractors and their salespersons must carry
pocket cards that you should ask to see. If they cannot show you a
license, check the department's license website or call the
department for verification.
GET REFERENCES FROM THE CONTRACTORS YOU ARE CONSIDERING.
Ask for the name and address of previous customers.
Check with those people who have had work done and ask if it
was satisfactory.
Be sure the contractor has a permanent business location and
telephone number.
Check the contractor's credit reputation with local banks or
suppliers.
GET ESTIMATES
Get estimates from different contractors to compare prices.
Remember that the cost of materials and quality of materials will
affect the bid. A low bid based on inferior materials may not be a
bargain, so consider more than the price alone.
Be sure that the estimate specifies the total price, the terms
of payment, the kind of materials to be used, and the estimated
time it will take to complete the job.
Be wary of special prices because of leftover materials, other
jobs in the neighborhood, or discounts if you agree to get other
customers. They are often gimmicks used to get you to buy.
GET A WRITTEN AGREEMENT AND CHANGE ORDERS
State law requires a written, signed agreement between
builders/remodelers and customers and requires you to get a copy.
Some of the items that should be covered by the agreement are:
The company name, address, and telephone number.
The full name and license number of the builder/contractor
and/or the salesperson.
Detailed job specifications which include a description (brand
names, colors, grades, styles, and model numbers) of materials.
A list of all costs spelled out clearly.
Any standards that will be used to determine workmanship.
Whether or not an alternative dispute resolution mechanism
will be available.
Any plans or drawings that are required.
Start and completion dates. These are estimates and should
allow for any reasonable delays but should include a clause
allowing you to withhold payment if work slows down for no apparent
reason.
A statement that all required building permits and variances
will be obtained by the contractor before work is begun. The
building permit is for your protection. Disreputable and unlicensed
contractors will often tell/ask you to apply for the permit.
WHEN YOU CONTACT A LICENSED BUILDER OR MAINTENANCE &
ALTERATION CONTRACTOR, NEVER APPLY FOR A BUILDING PERMIT IN YOUR
NAME. DOING SO WILL MAKE YOU RESPONSIBLE FOR ANY PROBLEMS WITH THE
PROJECT AND COULD ALSO MAKE YOU LEGALLY LIABLE FOR ANY INJURIES
THAT HAPPEN TO WORKERS.
Verify that the contractor carries liability insurance and has
Worker's Compensation coverage, in case of accidents on the job.
Make sure that the contract confirms that the builder has liability
and Worker's Compensation coverage.
A statement of any warranty on the work. Be sure that it tells
whether labor and materials are guaranteed, and for how long.
A statement that cleanup will be done by the contractor.
A provision for credits if there are large amounts of
materials left over. On the other hand, you should be prepared to
pay for extra materials if the project takes more than anticipated.
Your builder should provide you with a description of these extra
costs in writing so that there are no surprises on your final bill.
The terms of payment should be clearly stated in the
agreement.
A right to cancel clause. If you are solicited and have signed
the contract in your home, you have three days to cancel the
contract if you change your mind. You must send the contractor a
registered letter stating that you wish to cancel, in compliance
with 1971 PA 227, MCL 445.111 to 445.117.
If everything in the agreement is satisfactory, the contractor
must sign and date the contract and must ensure that the homeowner
signs as well. Any changes to the project should also be in writing
(change orders) and be dated and initialed by both parties.
PAYING THE CONTRACTOR
NEVER pay for the entire job in advance.
Make a deposit when work begins to cover materials and startup
costs. Pay by check to the company name and ALWAYS get a receipt.
Make scheduled payments as work progresses. Refer to the
Construction Lien Recovery Fund's webpage and telephone number in
this pamphlet.
RESOLVING PROBLEMS
Your local inspectors are responsible to make sure your
finished job meets all codes and safety standards.
If you have problems, you should first try to resolve them
directly with the contractor before making the final payment.
You MUST notify the contractor of the problem in writing and
give the contractor a reasonable opportunity to do any needed
repairs or corrections.
You may contact the local building inspector for assistance in
resolving workmanship and code violations. If the signed agreement
contains workmanship standards, these will be used in resolving the
complaint.
If the agreement contains an alternative dispute resolution
mechanism, it must be used before the state can consider a
complaint.
Small Claims Court is another alternative if the dispute
involves a sum within its jurisdiction.
If your efforts to resolve the matter fail, or if you feel you
have been the victim of fraud or deceit, you should contact the
Commercial Enforcement Division to file a complaint. Your local
building department can also help with this filing.".
(3) The board may change the content of the pamphlet through
rules promulgated by the director.
(4) A licensee performing alteration, repair, or remodeling of
a residential structure shall do the following:
(a) If the alteration, repair, or remodeling is of a value of
$600.00 or more, the licensee shall provide a copy of the pamphlet
described in subsection (2) prior to the execution of any contract.
The owner shall sign and date an acknowledgement form as further
described in subsection (5).
(b) If the alteration, repair, or remodeling is of a value of
less than $600.00, the licensee shall provide to the owner a copy
of the pamphlet described in subsection (2) and is not required to
provide an acknowledgment form.
(5) The acknowledgment form described in subsection (4)(a)
shall substantially state the following: "I, the homeowner, have
received from the contractor a copy of "Home Repair and
Remodeling".". The licensee or his or her agent shall also sign and
date the acknowledgment form, which shall include the name and
address of the licensee. The acknowledgment form shall be in
duplicate and incorporated into the pamphlet. The original
acknowledgment form shall be retained by the licensee and the
duplicate copy shall be retained within the pamphlet by the owner.
(6) The failure of a licensee to comply with the requirements
of this section regarding supplying an owner with a contract or
work order and providing a pamphlet and, as applicable, a signed
acknowledgement is considered a violation of this article
punishable only by an administrative fine of not more than $250.00.
The administrative fine described in this subsection is applicable
only if the licensee is found by the department to be in violation
of this act regarding an offense punishable under section 602. The
penalties of section 602 do not apply to a violation of this
section.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted.