Housing Update

Housing update from the National Association of Home Builders Click here.

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.

Free Red Cross Workplace Seminar

The American Red Cross is offering a free Workplace Emergency Preparedness Seminar

April 18, 2013 in Traverse City
9 am - Noon

When you RSVP you will be sent information on the Traverse City location .

Click Here for more information and to RSVP

SUCCESS IN 2013: KNOW YOUR BUSINESS

Three Key Areas that Need your Attention

Owning a small business and living in the land of “entrepreneurial bliss” can prove rewarding, yet challenging.  Lisa J. Vogler, an attorney with the law firm of Cummings, McClorey, Davis & Acho has counseled many small business owners, and has advised them of three areas of their business that need constant attention: insurance, accounting and marketing.  These areas should not be delegated to an employee or independent professional without the owner’s consistent oversight.  Being educated, informed and pro-active in these areas can protect the owner, the business and its future success.

INSURANCE

Commercial insurance is a topic that perplexes many entrepreneurs.  The tendency is to view purchasing commercial insurance in the same way as insuring a personal vehicle; however, this is not the case. 

 

Commercial insurance needs to be customized to fit the needs of a specific business, which can be challenging to determine.  General liability, workers’ compensation, equipment coverage, commercial auto/fleet coverage, fiduciary or dishonesty bonds, and umbrella coverage are just a few of the types of policies that may be applicable to a small business.  Residential and commercial contractors have the added concern of understanding the laws in regard to ownership of job materials, and the need for builders risk coverage.  

Additionally, business owners should understand how warranty laws affect the operation of their business.  If their business involves a product or service that is covered by an express or implied warranty, owners should know if general liability coverage will protect them if a claim is made.  

It is important for business owners to use a trustworthy and attentive insurance professional.  It is equally as important for business owners to understand how their policy premium is calculated, and how deductibles can affect their premiums and potential cash flow.  Business owners should meet with their agent, at a minimum, twice per year and inform their agent if any aspect of their business has changed.

ACCOUNTING
Small businesses and professional offices can be havens for embezzlers.  Not paying attention to a businesses’ checkbook and finances can have devastating consequences.  Business owners should always compare the computerized accounting program with hard copies, such as check stubs, bank deposit receipts and invoices.  Furthermore, they should never sign a blank check, even for a long-time trusted employee, and should never allow only one employee to know the accounting program’s password. 

 

Understanding the payroll tax obligations is also a concern in managing a small business.  Failing to budget for weekly, monthly or quarterly payment of payroll taxes can be costly.  All too often, small business owners prioritize other expenses over payment of payroll taxes, allowing arrearage, penalties and interest to accumulate.  

Finally, business owners should never hesitate to structure their written contracts or verbal obligations with a customer in staggered or installment payments.  If a product order requires materials to be purchased or requires set-up time, ask for a reasonable deposit or an initial payment from a customer to cover these expenses.  One of my favorite general rules in business is, “You don’t get what you don’t ask for.” 

MARKETING
In Lisa’s experience, there is one essential approach to small business marketing: always sell yourself first.  Despite the technology of today, people still want to see a business owner’s smile and shake their hand.  If a customer does not believe or trust a person, the chances of selling them a product or service diminish exponentially.  

It is also imperative for business owners to know their audience.  Research a prospective business or individual before making that first phone call or setting up that first meeting.  Discover what is important to them, and impress them with the knowledge of their business history and philosophy.   

The year ahead holds promise for many small businesses.  Business owners should get out there, flash their smile and shake some hands, but when you get back in the office. . . . know your business.  

Lisa J. Vogler practices in the areas of municipal law, construction law, insurance defense, and commercial and personal injury litigation. As an entrepreneur and general counsel for a family business, she has extensive background and experience in all issues related to business, including employment law, risk management, contract drafting, review and negotiation, and business taxation.  She can be reached at (231) 922-1888 or lvogler@cmda-law.com.

ARC Report Endorses Massive Overhaul of Construction Permitting and Inspection

On Tuesday, March 5th Governor Snyder released the long-awaited report from the Office of Regulatory Reform’s Inspections & Permitting Advisory Rules Committee. Lee Schwartz, HBAM’s Executive Vice President for Government Relations was one of the 19 members of the ARC.

To hit some of the highlights, the report recommends:

• Creation of a statewide fire code.
• Eliminating local construction boards of appeal and hearing all code appeals at the state level.
• Enhancing standards for approving new building departments.
• Creating an expedited code interpretation review panel through the State Construction Code Commission.
• Eliminating redundant permitting at multiple levels
• Requiring sufficient code knowledge before provisional registration of building inspectors.
• Removing the requirement for government employment before registering as an inspector.
• Creating a development-friendly culture of “Educate first, enforce second.”
• Allow for self-certification in certain circumstances.
• Creating single permits for HVAC and water heater replacement.
• Creating an applicant checklist to help ensure a complete submission of applications for permits and plan review.
• Provide for pre-project meetings.
• Create and use baseline criteria for reviewing building officials’ performance.

Conducting random audits of jurisdictions with delegated authority to assure proper performance of the plan review, permitting and inspections process.
Overall the report endorses a massive overhaul in how construction permitting and inspections are done in Michigan. A majority of these changes will require legislative action to amend either the Stille-DeRossett-Hale Single State Construction Code Act or the Building Officials and Inspectors Registration Act. Many of these changes (such as eliminating local CBAs) will face strong opposition. As you would expect, the HBAM will be in the thick of the effort to reform our system.

To view the complete recommendations, visit:
http://www.michigan.gov/documents/lara/Inspections_and_Permitting_Recommendations_-_March_4_413233_7.pdf

DEQ Training March 21, 2013

 

Training for Contractors, Consultants & Local Officials

 

Department of Environmental Quality
Water Resources Division
Cadillac District Office

 

DEQ Staff would like to meet with interested contractors, consultants, and local government officials to review state environmental regulations administered by the Water Resources Division involving inland lakes and streams, wetlands, the Great Lakes and floodplains.

We will be discussing what is NEW in the regulations and permitting process, in preparation for the upcoming construction season.

 

Where: Garfield Township Hall
3848 Veterans Drive, Traverse City

 

When: 9am-noon, Thursday, March 21, 2013

 

Please RSVP via e-mail names and
e-mail addresses by March 11, 2013 to
ConradsonS2@michigan.gov

 

Questions? Please call 231-876-4443
or 231-876-4444

Personal Branding 2.0 Seminar

Friday, March 15th - An encore professional development seminar "Personal Branding 2.0" facilitated by Bill Marsh, Jr.

Regardless of your business niche, this impactful session will help you discover how to lead and inspire others. If you are looking for a training with a lasting impact that will challenge and inspire you, you won't want to miss this.

Location: ProBuild conference room - 5700 US-31, Grawn, MI

Time: Lunch begins at noon

Seminar: 12:45-2:30 p.m.

Cost: $25 for members and $35 for non-members.