Home Improvement and
Building Contractors

If you have a contract, read it over now. What work was to be done? What other terms are in the contract? If what you agreed to was not done or was done poorly, you need to act now. If you want to back out of a contract or agreement you just signed, act now.  Strict time limits often apply.

 

One Day Cancellation Rule for Home Construction Loans.
Under Michigan’s Home Improvement Finance Act, you may have until 5:00 p.m. of the next business day after signing the contract to cancel if:

• The contract is for home improvement; and
• you agreed to make payments over time to the contractor.

Three Day Cancellation Rule for Home Solicitation Sales.
Under Michigan’s Home Solicitation Sales Act you have three business days to cancel the contract if the contract was signed in or at your own home. (This law was made to give consumers time to “cool off” if the sales pitch was made in the consumer’s house instead of a normal place of business.) Three days means until midnight of the third business day after the day on which the agreement is signed.

Federal law expands your right to cancel certain contracts. The time limit is three business days. If the contract was entered into at a place other than where the contractor regularly does business, e.g. at a hotel, convention center, homeshow, fairground, etc., you have the three day right to cancel.

How to Cancel:
If the contract tells you how to cancel, follow those directions.  Send written notice, by certified mail (keep a copy for your records), telling the contractor that you want to cancel. Note that the contractor must return any payment you made within ten days after he or she gets notice that you have cancelled the contract.

 

1. Send certified and regular mail (keep a copy for your records) to the contractor giving notice that you wish to cancel. For a sample letter, click here (be sure to put your return address on the envelope).

2. File a complaint with the Attorney General’s Consumer Protection Division in writing:

PO Box 30213
Lansing, MI 48909

1-517-373-1140
1-877-765-8388 (1-877-SOLVE-88)

or online at www.michigan.gov/ag

 

Sometimes homeowners can face a situation where the licensed contractor has been paid by the homeowner but then the contractor does not pay subcontractors, suppliers, or laborers. The unpaid individuals may then place a lien against the homeowner’s property. If this happens to you, contact the Michigan Homeowner Construction Lien Recovery Fund. The Fund pays such claims and protects you from paying off the lien. The Fund was created to protect both the homeowner and the professionals who provide materials or labor for a licensed contractor. The Fund does not pay losses incurred with an unlicensed contractor. For more information, contact the Fund at (517) 241-9241 or visit www.michigan.gov/constructionlienfund

 

i. Take pictures to show any damage, incomplete areas, or poorly done work. Develop them quickly and make sure that they show the problem; if they don’t, keep trying until you can show the problem clearly.

ii. Contact the contractor. Write a letter to the contractor explaining your problems or complaints. Keep a copy of the letter for yourself, so you and the contractor have a record of the problem. Make sure to explain your problem with the contractor in detail. Give the contractor a reasonable amount of time to correct the problem, and include the time you’ll wait in the letter. To access a sample letter (click here). It is always a good idea to send the letter by registered mail or hand deliver it.

iii. Check the Contractor’s License by contacting:

Builder’s Unit
Bureau of Commercial Services
Department of Labor and Economic Growth
PO Box 30245
Lansing, MI 48909

517-241-9254
http://www.michigan.gov/cis/

or call the Michigan Residential Builders and Maintenance & Alteration Contractors Board, Verification Unit at (517) 241-9427.

Most contractors must be licensed. For complaints against those that are, the state will investigate and may be able to force a contractor to complete the job properly or help resolve the problem.

iv. File a Complaint. If the problem cannot be worked out with the contractor, you may refuse to pay and file a complaint. Make sure that all complaints are in writing. Keep copies for yourself. Send complaints to:

Attorney General’s Office
Consumer Protection Division
PO Box 30213
Lansing, MI 48909
www.michigan.gov/ag

Contractors State License Board
Bureau of Commercial Services
P.O. Box 30245
Lansing, MI 48909
517-241-9254
http://www.michigan.gov/cis

Your local building department
(Check your local township government information)

Michigan Department of Labor and Economic Growth
Commercial Enforcement Division
(517) 241-9202  

v. Try arbitration or mediation. Complain to a private arbitration mediation program. You can locate a program in your area by looking in the yellow pages under “mediation” or "arbitration."

vi. Finish the work and sue. You can also have someone else finish the work and sue the first contractor for the cost of completing the work if the work you arrange to have done was contemplated or covered under the original contract.

First, make sure that you have written a letter to the contractor and given him the time allowed to complete the job. You may also want to telephone the contractor and tell him what you plan to do if you think that this will motivate him or her to complete the job properly.

If the contractor does not correct the problem, you should then get two or more detailed written estimates from other contractors. Then you have a decision to make—and the decision will hinge in part on the money available to you, the urgency with which the remaining work must be done, and the chances that you could eventually collect from your original contractor. You could have the work completed by another builder or contractor, and submit the bill to the original contractor, or, if you have not fully paid the original contractor, send a note stating why the full contract amount will not be sent.

If the contractor does not pay for the completed work, you can sue in small claims court if the amount involved is less than $3,000. If the amounts are greater you likely will need the assistance of an attorney to sue in the appropriate district or circuit court.

 

 

i. Report to police. You can make a report to local police if you believe that the contractor took your money and ran, or you suspect now that the builder does not intend to do the job.

ii. Complain to state agency. Any contractor that enters into the contract planning to defraud you might be violating various criminal laws, so file a complaint with the police and also alert the Michigan Bureau of Commercial Services, Enforcement Division, at (517) 241-9202.

iii. Contact your prosecutor. Most work connected with your home which exceeds $600 in cost must be done by a licensed contractor. Consider filing a complaint with your county Prosecuting Attorney on a contractor who is not licensed. Unlicensed contractors are not allowed to sue you for collection of their bill if the cost exceeds $600.