May 17, 2006, Introduced by Senator SANBORN and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
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 license 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 containing substantially
the following in at least 12-point type or font:
"HOW TO FIND REPUTABLE BUILDERS OR 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 the following trades:
basement waterproofing
carpentry
concrete
excavation
house wrecking
insulation
masonry
painting and decorating
roofing
screen and storm sash
gutters
siding
swimming pools
tile and marble
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 a
pocket card that you should ask to see. If they cannot show you a
license, check the department's License Information database
http://www.dleg.state.mi.us/bcs_free/default.asp or call the
Verification Unit at (517) 241-9288.
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 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 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, phone 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.
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.
A statement the contractor carries liability insurance and has
Workers Compensation coverage, in case of accidents on the job.
A statement of any warranty on the work. Be sure it tells if labor
and materials are guaranteed, and for how long.
A statement that cleanup will be done by the contractor should be
allowed.
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 you wish to cancel.
If everything in the agreement is satisfactory, both the contractor
and the homeowner must sign and date the contract. 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 web page
http://www.michigan.gov/cis or call (517) 241-9241
for more information.
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
them 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 their 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 at (517) 241-9254
to file a complaint. Your local building department can also help
with this filing."
(3) 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 (4).
(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.
(4) The acknowledgment form described in subsection (3)(a)
shall substantially state the following: "I, the homeowner, have
received from the contractor a copy of the "How to Find Reputable
Builders and Remodelers"." 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.
(5) 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 a civil fine of not more than $100.00. The
penalties of section 602 do not apply to a violation of this
section.