LARA Offers Tips to Protect Consumers on Spring Home Improvement Projects

Verify licensure, permits, payments to avoid unscrupulous contractors, costly mistakes

Media Contact: LARA Communications 517-335-LARA (5272)
Email: mediainfo@michigan.gov

May 9, 2019 – Sprucing up your nest this spring? If you’re planning to remodel or build, LARA’s Bureau of Construction Codes (BCC) offers some important tips that will help you avoid common and often costly mistakes while building or renovating your home.

"Always check to make sure the people working on your home are properly licensed. Ask to see a copy of their license, then take a few minutes to look up the license online or give us a call," said LARA Director Orlene Hawks. “It’s always best to do your own research to verify licensure with the State. Those few minutes spent at the beginning of a building project may prevent big problems later."

Residential builders and maintenance and alteration contractors, electricians, plumbers and mechanical contractors are licensed by BCC and must have a license that corresponds with the work to be done. Before entering into a building or renovation project, Michigan consumers are encouraged to verify license information by going to: https://www.lara.michigan.gov/colaLicVerify/ (building) or https://aca3.accela.com/LARA/Default.aspx (electrical, mechanical, plumbing). Or contact BCC at 517-241-9316 or email at: Lara-bcc-licensing@michigan.gov and the bureau can run a license check for you.

An Internet search for builders or contractors will yield service provider referral sites and advertising sites such as Craigslist. Many of the ads will state that the individual is licensed. Regardless of the source of the referral, consumers should exercise caution and confirm that the builder or contractor is properly state-licensed.

Don’t pay for the entire job upfront. 
Consumers should never give a contractor a large sum of money or pay the full contract price at the start of a job or before the job is complete; they are inviting trouble if they do. If it's a large job and an upfront payment is agreed upon, it should be a reasonable percentage of the total contract price. 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, a certificate of occupancy has been issued by the building department, 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, county, or state building department to determine if your project requires building, electrical, plumbing, and/or mechanical permits. 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, fireplaces, pools, water heaters, etc.)
• Renovations (garage conversions, basement furnishings, kitchen expansions, etc.)
• Electrical systems
• Plumbing systems
• HVAC (heating, ventilating and air-conditioning) systems

“Be cautious if a contractor asks you to obtain construction permits claiming it will save costs on your project,” said BCC Director Keith Lambert. “Such a request is often a sign that the contractor is not licensed or is unwelcome at the building department.” 

Lambert said that homeowners doing the work themselves are responsible for obtaining the required building permits. Not all do-it-yourself home improvement projects require permits, but some do. Check with your local or state building officials beforehand.

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. Depending on the type of work being performed by the subcontractors, the subcontractors may also need to be licensed with the state.
• 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.

Lambert also said to avoid doing business with unlicensed contractors, or “door-to-door” contractors who may offer you a “special price” on a project if you hire them right away – pressuring you into making a decision. Unscrupulous contractors can make promises they can’t keep, give you an inaccurate estimate, overcharge you for shoddy work, or disappear with any payment you’ve made before the job is started or completed.