Consumer Tips for Working with Home Improvement Contractors; Keep your project on time and on budget

Contact: Jeannie Vogel 517-373-9280
Agency: Licensing and Regulatory Affairs

April 23, 2015 – Spring has sprung and many homeowners will start home improvements or building projects. Before you do, the Michigan Department of Licensing and Regulatory Affairs (LARA) offers some important tips that will help you find a good contractor, and avoid common and often costly mistakes when planning to remodel or build a new home.

"First and foremost, hire a reputable contractor who is properly licensed in the state of Michigan,” said LARA Deputy Director Shelly Edgerton. “Ask to see a copy of their license, then verify their license by looking it up online or give us a call. Don’t assume individuals found on Internet referral and advertising sites such as Angie’s List or Craigslist are licensed, even if the ad states they are.” 

Verify a Builder/Contractor License. Residential Builders and Maintenance and Alteration Contractors: An online license search is available at http://www.michigan.gov/licenselookup or by calling LARA's Corporations, Securities and Commercial Licensing Bureau at 517-241-9288.

Contractors: Electricians, plumbers and mechanical contractors are licensed by LARA's Bureau of Construction Codes and must have a license that corresponds to the work to be done. Mechanical contractors must also have the proper license classification. To verify license information go to: www.michigan.gov/bcclicense or call 517-241-9313.

Don’t pay for the entire job upfront. Customarily, one-third is paid in advance; one-third halfway through the job and one-third upon completion. Make the final payment only when the job is completed, you have inspected and approved the work, the job site has been cleaned up, and the suppliers and subcontractors have been paid as evidenced by waivers of lien. Do not pay with cash. Pay by check or credit card. 

Don’t forget your permit! Before starting a project, check with your local or state building department to determine if your project requires a permit. A permit is the legal permission to start construction of a building project in accordance with approved drawings and specifications and ensures it meets minimum safety standards. Proper permits and inspections help guard against defective work. Property insurers may not cover defective work, so the value of the property could be affected and problems may arise when the property is sold if permits are not obtained.

Permits are required for: 

  • New buildings
  • Additions (bedrooms, bathrooms, family rooms, etc.)
  • Residential work (decks, garages, fences, fireplaces, pools, water heaters, etc.)
  • Renovations (garage conversions, basement furnishings, kitchen expansions, etc.)
  • Electrical systems
  • Plumbing systems
  • HVAC (heating, ventilating and air-conditioning) systems

Other important tips:

  • Get written estimates from at least three contractors that include detailed job specifications on the materials, labor, timeline and total charges for the work. Don't automatically choose the lowest bidder. Ask how long they have been in business, verify if they have liability insurance, and whether they will be using subcontractors on the project.
  • Ask for references. Talk to friends, neighbors, or former customers who are familiar with the contractor's work, reliability, and business practices. Ask former customers if they were satisfied, and if they would use the contractor again.
  • Obtain a detailed written contract that states exactly what work will be done, the quality of the materials used, warranties, start and completion dates, total cost of the job, and a payment schedule. It will provide clear expectations for you and the contractor, and help avoid many of the problems experienced by consumers. Make sure you understand all of the terms. If you don't, ask. Never sign a contract with blank spaces. Know your cancellation rights.  All changes to the contract should also be in writing and signed by the parties. 
  • Protect yourself by asking the contractor, subcontractor and suppliers for a completed and signed "waiver of lien" form. This will prevent a subcontractor or material supplier from putting a lien on your home if the contractor doesn't pay the bills. This can happen even if you paid the contract in full.
  • Make sure your contractor is insured and carries personal liability, worker's compensation, and property damage coverage. Ask for copies of current insurance certificates. If the contractor is not properly insured, you could be held liable for any injuries and damages that occur during the project.
  • Check with your property insurance provider for the extent of your coverage.
  • Keep good records -- copies of the contract, change orders and correspondence.

For more information, visit the Corporations, Securities, and Commercial Licensing Bureau website at www.michigan.gov/cscl or Bureau of Construction Codes at www.michigan.gov/bcc. To determine if a state license is needed, go to: www.michigan.gov/statelicensesearch

For more information about LARA, please visit www.michigan.gov/lara
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