From The Detroit News | By Ken Calverley and Chuck Breidenstein

DETROIT, June 13, 2024 ~ If you are a regular listener to the Inside Outside Guys, you are aware we have begun a series of public service announcements, PSAs, intended to help people better understand the requirements building contractors are obligated to in Michigan.

Many of the same laws and rules will also apply in other states, but owners are cautioned to verify requirements with a state governing agency.

We receive a lot of emails from homeowners who have hired a contractor without knowing their rights under the law. These people are usually experiencing a difficulty in the relationship that may have been avoided had they been better informed in the beginning.

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As always, we strongly suggest the use of an attorney familiar with the industry prior to initiating any contract for hire.

To begin, contracts for the work of a builder must be in writing and explicit in their terms as to the type of work being done, the materials to be provided, and the total cost for the project.

When construction is involved, plans and specifications must be furnished.

Inducements in the building contract that obligate an owner to place yard signs on their property or require them to allow the contractor to display the project to other persons, are expressly forbidden.

A builder must show proof of current licensure to all prospective clients and include license information specific to the legal entity the customer is dealing with in the written contract.

A contractor must sign the document in the proper legal capacity. If ISOS Building is the company proposing the work, the builder must sign in her legal capacity as a representative of that company, even if she is the sole and legal owner of the company.

The idea here is to put an owner on notice as to the exact entity with whom they are doing business.

Monies given to a contractor are given in trust; that is, it can be assumed that all financial obligations due, or so to become due, as a result of the work will be paid from those monies.

As an example, a builder may arrange for the delivery and use of framing lumber to your home for that new addition. You rightfully believe that part of the money you pay the builder will be used to pay the lumber supplier.

What you may not know is that the supplier maintains a lien right on your home in an amount equal to the cost of the materials delivered and may force a sale of the property to collect the debt if the contractor does not pay.

A measure of protection is offered by a requirement that potential lien claimants must put you on legal notice of the materials or work to be furnished, and of their intent to lien. Additionally, a contractor must provide a written sworn statement that indicates potential lien holders, the amounts due or to become due, and the current payment status as of the date of the statement.

The intent here is that you are put on notice of those who might be owed money, so you can verify payments if needed.

If the contract is solicited in your home, it must also contain a three-business-day Right of Rescission in a specified font and format on a separate sheet.

Michigan does not require any specific contractor warranty per se, other than a vague “fitness for intended use and habitability.”

Owners maintain a right to pursue a complaint against the license for 18 months after sale, completion or occupancy, whichever occurs last.

The Guys have long suggested that any warranty furnished be in writing and attached to the original contract as an integrated part of that document.

Good contractors will have a clear, easily understood, warranty that addresses materials, labor, workmanship and related cost items for a specified period of time.

Professional entities will also provide what the Guys call a “first person warranty,” meaning you will only have to deal with the original installing retailer to correct any issues that may arise.

This is a policy we address with all of our great team partners.

You should not be routed through a third party or directed to contact a manufacturer regarding any potential product defect.

There are many more issues we will be discussing in the future, but the biggest things an owner can do are to consult with a good attorney that knows the industry and always use professionals that come from a trusted referral, like those you can find every day at InsideOutsideGuys.com.

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For more advice, listen to “The Inside Outside Guys” every Saturday and Sunday on 760 WJR from 10 a.m. to noon or contact them at InsideOutsideGuys.com.