Beware of Scams by Unlicensed Builders

Unforeseen Costs: Michigan Consumers Warned to

Beware of Scams by Unlicensed Builders

 

Here’s a familiar picture. A contractor comes into your house and offers you the lowest quote for the remodeling project you’ve been planning. The contractor tells you their company’s work will be cheaper without a building permit. However, what the contractor doesn’t mention is that not only is lacking a permit against the law, but it means there will be no inspection for quality of work. This is just one of the many scenarios practiced by unlicensed builders who prey on unsuspecting consumers with building scams and rip-offs. The “deals” unlicensed builders boast end up costing Michigan consumers more than the work of distinguished licensed contractors.

“There are a number of different scam tactics unlicensed con artists use,” said Kathy Maisonville HBA of Grand Traverse Area. “They will tell you it’s cheaper to do the job without a building permit or that no permit is needed.  They do this because without a builders license there will be no inspections done to assure the quality of work or that it meets the requirements of the Michigan Residential Code (MRC).”

Under Michigan law, all contractors offering to do work which totals $600 or more in labor and materials must be licensed by the Department of Energy, Labor & Economic Growth (DELEG). A Residential Builders license allows a contractor to build a complete structure and do maintenance or alteration (remodeling) work. A Maintenance & Alteration license indicates that the holder has met requirements for one or more of 14 different trades. The trades in which a contractor is qualified to practice are listed on the license.

“Consumers should also be wary of builders who offer a “special low price” or claim they have materials left over from another job they can use on their project,” said Kathy Maisonville. “Legitimate builders and remodelers do not over buy materials for a job.  Consumers are also warned to be cautious about any builder who asks to be paid in cash or requires total payment up front.”

Hiring unlicensed builders also exposes the consumer to potential liability issues that could be very costly.  Consumers that contract with an unlicensed contractor can be held liable for on-the-job injuries sustained by that unlicensed person and their employees. This exposes the consumer to liability, including having to pay medical bills and lost wages. Licensed contractors must carry workers compensation insurance to cover injuries to their employees. Unlicensed builders do not.

Licensed contractors offer consumers several benefits, including:

• The contractor knows his/her trade and has been tested and approved, including a credit check by the state of Michigan;
• They are required to show continuing competency in their profession to keep their license.  They know and build to the Michigan Residential Code;
• Liability for on-the-job injuries will rest with the licensed contractor, not with the consumer.

All licensed contractors carry a pocket license card, which consumers should ask to see. If they cannot show their license, consumers should call the Michigan Department of Labor and Economic Growth’s (DELEG) Builder’s Unit at (517) 241- 9254 or visit the DELEG website at www.michigan.gov/builders, to confirm that an individual or company has a license.

Consumers are encouraged to file complaints against unlicensed builders.  By doing so, consumers not only assist in legal crackdowns against unlicensed builders, but also will help friends and neighbors from being ripped off.  Complaints against unlicensed builders must be in writing and signed. Necessary forms may be obtained at http://www.michigan.gov/documents/dleg/builders_complaint_forms_320691_7.pdf, or a consumer may request a form and information by telephone at (517) 241-9202. Consumers filing complaints are urged not include any information such as your social security number, that you do not want to be released to the respondent.