Steps to get a Michigan general contractor license

Obtaining a general contractor license in Michigan is crucial for legal and professional credibility. It ensures that contractors comply with state regulations and are recognized as qualified professionals authorized to perform general contracting work in Michigan. 

This process involves meeting specific requirements, completing necessary training, and passing a licensing exam.

In this blog, you’ll get all the inforrnation you need to learn how to get a Michigan general contractor license. Let’s dive in!

What are the general contractor license requirements in Michigan?

To become a licensed general contractor in Michigan, you must complete several key steps, which are structured to ensure you meet the state’s rigorous standards for quality and safety in construction:

1. Ensure you meet basic requirements: You must be at least 18 years old and hold a valid Michigan driver’s license or state identification.
2. Choose your license type: Decide between Michigan’s two main types of licenses. There is a Residential Builder License and a Maintenance & Alteration Contractor License.
3. Prelicensure education: You must complete a 60-hour prelicensure education program approved by the state. This education covers critical areas including business management laws, project management, and construction safety standards. Examples of state-approved programs include MI Contractor Training and License to Build.
4. Relevant work experience: While not a necessity, practical experience is beneficial and sometimes indirectly required through the types of questions and content covered in the licensing exam. The primary emphasis for a Michigan general contractor license is on educational prerequisites, rather than specific work experience.
5. Submit an application: Submit a detailed application to the Michigan Department of Licensing and Regulatory Affairs (LARA). This application must include proof of your education, work experience, and training, along with the necessary fees. The application fee for first-time applicants is $195.
6. Take the comprehensive licensing exam: Administered by PSI, the exam tests knowledge of Michigan residential code, building codes, and business management. You will also need to pay a fee to take these exams, which varies based on what license you’re applying for:
   • Residential Builder: $117.
   • Maintenance & Alteration Contractor: $70 to $114 (depending on the number of trades being tested).
7. Liability insurance and bonding: Michigan does not require contractors to have liability insurance, but employers reserve the right to make it a requirement. While some specific types of contractors, like security alarm contractors, are required at the state level to have a surety bond (in this case, $25,000), most other general contractor bonding requirements are mandated at the local level. This means that the requirements for surety bonds vary by city or county.

Note that while most general contractors must adhere to these requirements, Michigan provides exemptions for certain professions and specific types of contractor licenses. It’s important to consult directly with LARA to understand if your specific trade or profession falls under these exemptions.

Step-by-step guide to getting a general contractor in Michigan

Step 1: Complete your prelicensure education

Prelicensure education is mandatory and includes courses in business management, project management, and construction safety standards. Accredited institutions offer various courses designed to prepare candidates for the licensing exam. 

You must complete 60 hours of approved prelicensure courses. You must spend at least 6 hours in each of the following 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.
• MIOSHA construction safety standards.

Here are some best practices to complete your prelicensure education:

• Select courses that are state-approved and that align with Michigan’s licensing requirements.
• Start preparing for the licensing exam by creating study materials during your courses. There are plenty of resources available for free online.
• Take each lesson one step at a time, and don’t try to rush the process, as it will only negatively impact you down the road.

Step 2: Submit your application and confirm your moral character

1. Complete the application form and submit the application to the Michigan Department of Licensing and Regulatory Affairs (LARA):
   1. Include proof of completed education.
   2. Pay the applicable fee.
   3. Include supplemental documentation, such as proof of experience and training.
2. Submit the application along with the required fees.
3. While there is no specific process to verify your moral character, the law states that applicants must “Be of good moral character.” Try to include supporting evidence to this (i.e., documentation and personal references) in your application.

Step 3: Pass the licensing exam

After meeting other requirements, take the Residential Builder or Maintenance & Alteration Contractor examination.

Each licensing exam covers various topics, including the Michigan residential code, business management, and construction safety standards. It is designed to test the applicant’s knowledge and competency in these areas.

Here’s what you need to know:

• The exam is administered by PSI.
• Exams are available at five PSI testing centers throughout Michigan, six days a week.
• Applicants choose their testing center and day of examination.
• Exam fees are paid directly to PSI when scheduling the exam.

To give yourself the best chance at passing:

• Use study guides and practice tests to prepare for the exam.
• Focus on key areas such as business management laws and building codes.
• Utilize available resources, like online courses and exam prep books.

What are the consequences of unlicensed general contracting in Michigan?

Operating as an unlicensed general contractor in Michigan can lead to severe legal ramifications, including fines and potential legal action.

Michigan law specifically prohibits unlicensed contractors from enforcing any building contract through court actions. This includes being barred from bringing any action to collect fees or foreclosing on construction liens related to their work.

For residential projects in particular, here are some of the possible consequences of operating without a license in Michigan:

• Legal ramifications: Unlicensed contractors are prohibited from bringing legal action to collect fees for their work. They also cannot file liens on properties for unpaid work.
• Financial penalties: If you’re caught operating without a license, you will be charged a fine between $5,000 and $25,000 for your first offense. Fines increase for subsequent violations.
• Criminal charges: You may even see jail time for working unlicensed. Your first offense could lead to up to one year in jail, while subsequent violations mean up to two years in jail.
• Reputational damage: Operating without a license could damage your professional reputation if word catches on.
• Legal action: Without a Michigan general contractor license, you’re vulnerable to lawsuits. The Attorney General’s office has been handling an increased number of cases involving unlicensed builders. In 2022, they dealt with over 200 misdemeanor unlicensed builder cases.

Pro-tip: Michigan has introduced a “Pretrial Diversion Program” that helps unlicensed builders avoid criminal prosecution if they quickly come into compliance with licensing requirements and fully reimburse complainants.

How much does it cost to get a general contractor license in Michigan?

While your exact Michigan licensing fees are dependent on your specific circumstances, a ballpark estimate for your total cost is $600 to $1,800.

Here’s a more detailed breakdown:

1. Application fees: $175, non-refundable.
   • Veterans may be exempt from this fee if they can show their separation from the armed forces was “honorable” or “general under honorable conditions”
2. Exam fees: 
   • Residential Builder Exam: $117.
   • Maintenance & Alteration Contractor Exam: $70 to $114, depending on the number of trades or crafts being tested.
3. Renewal fee (must be paid every two years): $185.
4. Prelicensure education: 60 hours worth of lessons. The cost for these courses could range from a few hundred to over a thousand dollars, depending on the provider.
5. Additional expenses, such as:
   • Study materials for exam preparation.
   • Potential business registration fees.
   • Liability insurance and bonding costs (if required, though not specifically mentioned for general contractors).

Budgeting for these expenses is crucial. Financial assistance and payment plans may be available to help cover the costs.

Do you need a general contractor license in Michigan?

In Michigan, certain construction activities require a licensed general contractor. It is essential to understand who needs a license and the specific activities that mandate licensure.

If you are working on any project valued at more than $600, you need to have either a Residential Builders License or a Maintenance & Alteration Contractors License.

The following jobs require a license under all circumstances:

• Building new homes.
• Major renovations and repairs.
• Commercial construction projects.

Key takeaways

Obtaining your Michigan general contractor license involves several key steps, including: 

• Completing 60 hours of prelicensure education.
• Gaining relevant experience.
• Submitting an application with fees.
• Passing a licensing exam. 

Remember that operating as an unlicensed contractor can lead to severe legal consequences, including substantial fines and potential jail time. So, you’ll want to comply with all the requirements and get licensed as the very first step in launching your career as a general contractor.

Michigan general contractor license FAQs

Does a general contractor license in Michigan increase your earning potential?

Obtaining a general contractor license in Michigan can significantly enhance your earning potential and access to larger, more lucrative projects. A license validates your qualifications and lets you take on more complex and higher-paying work.

How often do I need to renew my contractor’s license in Michigan?

The renewal process for a general contractor license in Michigan involves periodic renewal fees and depending on your locality, can include continuing education requirements to ensure ongoing compliance with state regulations.

Are there additional requirements for specific types of contractor licenses in Michigan?

Yes, certain types of contractor licenses, such as electrical, plumbing, or mechanical contracting, have additional requirements. These generally include specialized training, certification, and adherence to specific building codes. Additional requirements are entirely dependent on your specific trade and locality. 

See how Method helps general contractors get more done in a day.