APRIL 27, 2005– Springtime in Michigan means the beginning of home building and remodeling so Michigan Department of Labor & Economic Growth Director David C. Hollister advises consumers to choose a licensed builder carefully in order to protect their investment.

Anyone offering to do work which totals $600 or more in labor and materials must be licensed by DLEG. A Residential Builders license allows a contractor to build a complete residential structure and do maintenance & alteration (remodeling) work on a residential structure. A Maintenance & Alteration license indicates that the holder has met requirements for trades, such as basement waterproofing, carpentry, roofing, siding, swimming pools, and tile and marble. The trades for which a maintenance & alteration contractor is qualified to practice are listed on the license issued by DLEG.

“We encourage consumers to research a builder or any licensee before they make any financial investment. A little homework before a project starts may save a consumer the headaches they may find later in trying to resolve a dispute if they hire an individual or company who does not meet the homeowner’s expectations,” Hollister said. “A license look-up feature on the State of Michigan website makes this process easier for the consumer.”

The license lookup is one of the online services at www.michigan.gov and also available directly at http://www.dleg.state.mi.us/verify.htm. Consumers who want personal assistance in looking up a license can call the Builders Licensing Unit at 517-241-9254.

Hollister added, “Builders and contractors are required to display their license in the place of business and all contractors and their salespersons must carry a pocket card, which consumers should ask to see. If there is a doubt, request to see their license.”

DLEG’s Bureau of Commercial Services (BCS) and Michigan Residential Builders and Maintenance & Alteration Contractors Board oversee the practice of approximately 77,176 residential builders, 3,386 maintenance & alteration contractors and 1,530 construction salespersons in the state.

Tips to consumers on how to choose a builder are also on the DLEG  website. Some helpful tips include:

Choosing a Builder/Contractor:

• Get references from the licensees you are considering and check them. Check with the Better Business Bureau and local authorities to see if there is a history of complaints.
• Be sure the licensee has a permanent business location and telephone number.
• Get estimates from different contractors/builders to compare prices. Remember that the cost of materials will affect the bid. A low bid based on inferior materials may not be any bargain, so consider more than price alone.
• Be wary of special prices because of left over materials, other jobs in the neighborhood, or discounts if you agree to get other customers. They are often gimmicks to get you to buy.

Get It In Writing

·         Make sure that you read all documents carefully. Ask for any changes or modifications before you sign the contract. Look for the new alternative dispute resolution provision in a builder’s contract. If you do not want alternative dispute resolution, then ask the builder to remove it from the contract or choose a builder who won’t insist on arbitration.

Paying a Builder/Contractor

• Never pay for an 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.

Resolving Problems

• If you have problems, you should try to resolve them directly with the contractor/builder before making the final payment. You may contact the local building inspector for assistance in resolving workmanship and code violations.
• 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 are a victim of fraud or deceit, contact DLEG’ Commercial Enforcement Division to file a complaint. Consumers can file a complaint against a builder up to 18 months of the completion, occupancy, or purchase of a residence, which ever comes later.

Most importantly, consumers must always get agreements in writing and make sure to keep a copy for the record. A written agreement will make sure there are no misunderstandings between you and your builder or contractor about the work or the terms of the contract,” Hollister said. “Read all documents carefully and consider having an attorney review the contract and other forms before you sign them – especially if a large amount of money is involved in your project. Taking these steps will help prevent future problems down the road.”

Read more Michigan Department of Labor & Economic Growth news releases.