Contractor Licensing in Michigan: Residential Builder and M&A Licenses

“Do I need a builder’s license in Michigan?” If you build, remodel or repair homes for pay and the project is $600 or more, almost certainly yes. Michigan licenses residential construction under Article 24 of the Occupational Code, through the Bureau of Construction Codes in the Department of Licensing and Regulatory Affairs (LARA). There are two licenses, the residential builder and the maintenance and alteration (M&A) contractor, and electrical, plumbing and mechanical work each have their own separate licenses.

One thing Michigan does not do at the state level: license commercial builders. LARA’s own FAQ says the bureau “requires the licensing of Residential Builders not Commercial Builders,” and that some municipalities may have requirements of their own.

Who needs a license

The definitions in MCL 339.2401 turn on two ideas: a residential structure, and pay that is more than wages.

• A residential builder undertakes, for a fixed sum or other compensation “other than wages for personal labor only,” the erection, construction, replacement, repair, alteration, addition to, subtraction from, improvement, wrecking or demolition of a residential structure.
• An M&A contractor undertakes, for the same kind of pay, the repair, alteration, addition to, subtraction from, improvement, wrecking or demolition of a residential structure, or the building of a garage or the laying of concrete on residential property.
• A residential structure is a detached one- or two-family dwelling and its related facilities, or a townhouse of not more than three stories above grade with a separate means of egress.

“Wages” has a narrow meaning: money paid by the hour or day by the owner, landlord or occupant for an individual’s personal labor, where that person does not also contract for a fixed sum and does not supply the materials. Once you quote a price for the job or bring the materials, you are past wages.

The exemptions that matter

MCL 339.2403 lets several kinds of work go ahead without the license. For contractors, the important ones are:

• Under $600. One undertaking or project where the total contract price for labor, material and everything else is less than $600. It does not apply if the work is part of a larger operation, or if the operation is divided into contracts under $600 to evade the law.
• Working only for licensed builders. A person (other than a salesperson) who works solely under contract with a licensed residential builder or M&A contractor.
• Owners. An owner working on a structure on their own property for their own use and occupancy, and an owner of rental property doing maintenance and alteration on it.
• Licensed electrical, plumbing and mechanical contractors, but only for the work of their own trade.

Say a tile setter is asked to redo a bathroom floor, shower pan and shower walls for $1,650 and offers to write it as three $550 contracts. That is exactly the split the statute names; the job is one project over $600. The same tile setter working only as a subcontractor to a licensed remodeler falls under the second exemption, but only while that is all he does.

Residential builder or M&A: which one

LARA’s application puts the difference simply: “An Individual Residential Builder license allows you to build a complete residential structure and to do maintenance and alteration (remodeling) work. A Maintenance and Alteration (M&A) license allows you to become licensed in specific trades.” You may hold one or the other, not both. An M&A applicant must choose at least one trade, but not all of them.

The M&A trades in MCL 339.2404(3) are carpentry, concrete, swimming pool installation, basement waterproofing, excavation, insulation work, masonry, roofing, siding and gutters, screen or storm sash installation, tile and marble work, and house wrecking. A specialty contractor may still take on work in another trade when it is “incidental and supplemental” to the licensed trade. A roofer or a concrete contractor who sticks to that trade fits the M&A license; a remodeler who takes on whole kitchens and additions across many trades will usually want the residential builder license, which covers remodeling as a whole.

Some trades, painting among them, are not on the M&A list. Whether a given job still needs a license is a reading of the statute, and LARA’s FAQ is plain that the bureau will not make it for you: its “position is not to determine if an individual needs a license, but rather to guide our applicants through the licensing process.” When in doubt, ask a Michigan attorney before you sign the job.

Getting the license

1. Sixty hours of approved prelicensure classes. At least six hours in each of seven subjects: business management, estimating and job costing; design and building science; contracts, liability and risk management; marketing and sales; project management and scheduling; the Michigan Residential Code; and MIOSHA construction safety standards. The other 18 hours come from LARA’s approved course list. Certificates for courses taken after June 1, 2008 do not expire, according to LARA’s FAQ.
2. The application. LARA’s form (revised July 2026) lists a $195 fee for an individual residential builder or M&A license, a fee waiver for veterans with a DD-214, and a possible waiver of the classes for veterans with a letter from a commanding officer or supervisor. It asks for a state-issued photo ID, the course certificate, and a physical Michigan business address that is not a P.O. box; the statute requires a place of business in the state.
3. The exam, given by PSI. LARA says approved applicants are contacted by PSI to schedule at one of five testing centers, open six days a week, and the exam fee is paid to PSI.

A license runs three years. Michigan has no reciprocity: LARA’s FAQ says it “does not hold reciprocal agreements with any other State,” so a license from elsewhere does not transfer.

The company license and the qualifying officer

A sole proprietor may work under the individual license. An LLC, corporation or partnership is a separate legal person and needs its own company license. Under MCL 339.2405 it designates a qualifying officer, an officer, partner, member or managing agent, who holds an individual license and is responsible for supervising the construction work. If the qualifying officer leaves, the company license is suspended, though LARA may allow a reasonable time to qualify a replacement. A change in control must be reported to LARA within 10 days (MCL 339.2411(2)(g)). Get the individual license first; the company application comes after.

Keeping it: continuing competency

At renewal you state that you have a current copy of the Michigan Residential Code and have met the continuing competency rules. For someone first licensed on or after January 1, 2009, MCL 339.2404b requires at least 21 hours in each three-year cycle, including at least three hours in each calendar year of the first six years and at least three hours on codes, laws, safety and changes in construction and business law. A licensee who has held a license for more than two cycles without discipline needs three hours per cycle: one each of codes, safety and legal issues. Keep the proof for at least five years; LARA may audit a share of renewals.

Electrical, plumbing and mechanical: separate licenses

• Electrical. Except where the act provides otherwise, only a licensed individual may install electrical wiring, and a permit is needed where inspection is provided (MCL 339.5731). Some municipalities run their own electrical licensing under standards at least as strict as the state’s (MCL 339.5733).
• Plumbing. Only a licensed master or journey plumber performs plumbing, and the responsible plumbing contractor pulls the permit. Minor repair work and a few permitted installations are exempt (MCL 339.6107).
• Mechanical. Installing, altering or servicing the regulated mechanical work needs a mechanical contractor’s license in the right classification and a permit (MCL 339.5809). The classifications include HVAC equipment, ductwork, refrigeration, hydronic heating and cooling, and limited and unlimited heating and refrigeration service; one route to the exam is three years or 6,000 hours of experience in the classification (MCL 339.5807).

What working unlicensed costs

• You cannot sue to get paid for work that needs a license without alleging and proving you were licensed while you did it, and you cannot put a lien on the property (MCL 339.2412). Mechanics’ liens explains what that takes away.
• Criminal penalties. Acting as an unlicensed residential builder or M&A contractor is a misdemeanor with a fine of $5,000 to $25,000, up to one year in jail, or both; a repeat offense carries up to two years; one that causes death or serious injury is a felony with up to four years (MCL 339.601(6)). A prosecutor or the attorney general may also seek a civil fine of $5,000 to $25,000 (MCL 339.2412(4)).

Being licensed brings duties too. MCL 339.2411 lists grounds for discipline that include abandoning a contract, diverting money received for one project to another, failing to give the customer the entire agreement including any finance charges, and workmanship below the Michigan Residential Code. Michigan’s separate building contract fund law makes the money diversion point sharper: it treats money paid to a contractor for building construction as a trust fund for the payer and the contractors, laborers, subcontractors and suppliers (MCL 570.151); see construction trust fund laws, and what a home improvement contract must say for the paperwork.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.