Beefed-Up License Requirements

Requirements for the licenses held by corporate entities have been expanded by the recent legislative changes.  In addition to applying to corporations, partnerships and associations, the licensing statutes now expressly apply to limited liability companies too.  Moreover, there is a new requirement that the persons who serve as the qualifying officer for their entity’s license must now also maintain a license in their individual capacity as well.  Finally, the revised statutes prohibit individuals and qualifying officers from imposing a lien on real property if they were not properly licensed during the performance of the contract or work.

Beefed-Up Education Requirements

The Legislature has also added several new rules and requirements for obtaining and renewing residential building and residential maintenance and alteration contracting licenses.  A new section added to the licensing statutes requires first-time applicants to complete a pre-licensure course of study.  In addition, beginning this year, those already licensed are required to annually take continuing competency courses, and to maintain documentation of their continuing education activities for at least 5 years.  Finally, starting with the license cycle after December 21, 2007, residential builder and residential maintenance and alteration contractor licenses issued by the State will be good for a period of 3 years.

Beefed-Up Penalties

Apparently seeking to crack down on unlicensed individuals and entities doing work in Michigan, the Legislature has raised the penalties for those caught undertaking residential building and residential maintenance and alteration contracting without a proper license.  The penalties for a first offense, which previously consisted of a maximum fine of $500 and/or up to 90 days in jail, have now increased to a fine of $5,000 to $25,000 and/or up to 1 year in jail.  Similarly, the penalties for subsequent licensing offenses have been raised from the previous maximum fine of $1,000 and/or up to a year of jail time to a fine of $5,000 to $25,000 and/or up to 2 years in jail.  The Legislature has also made licensing offenses that cause death or serious injury a felony, punishable by a fine of $5,000 to $25,000 and/or up to 4 years in jail.  Those who aid or abet others in undertaking residential building and residential maintenance and alteration contracting without a proper license are themselves now subject to administrative penalties, including the loss of their own license and a fine of up to $10,000.

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