Yes — subcontractors do need a license in Michigan, and the requirement turns on the work being performed, not on whether a homeowner or a general contractor is doing the hiring. Michigan does not issue a standalone “subcontractor license.” If your trade would require a license for a contractor working directly for a homeowner, it requires the same license when you’re working as a sub.
Which License Your Work Requires
Michigan splits residential construction licensing into three categories. Figure out which one covers your trade before you take another job.
Residential Builder License
A residential builder license covers the construction of new residential structures for a fixed price, fee, or percentage. If you’re building homes or handling large-scale residential construction as a sub, this is your license. The Department of Licensing and Regulatory Affairs (LARA) administers it under Article 24 of the Michigan Occupational Code.
Maintenance and Alteration Contractor License
The M&A contractor license covers specific trades performed on existing residential properties, and it’s issued craft by craft. The qualifying trades are carpentry, concrete, swimming pool installation, basement waterproofing, excavation, insulation, masonry, painting and decorating, roofing, siding and gutters, screen or storm sash installation, tile and marble, and house wrecking.1Michigan Legislature. Michigan Compiled Laws 339.2404 Your license names the craft you qualified in. You can take on work in a second trade only if that work is incidental to the trade you’re licensed in.
Electrical, Plumbing, and Mechanical
Electrical, plumbing, and HVAC/mechanical work fall under Michigan’s Skilled Trades Regulation Act rather than Article 24. Mechanical contractors, for example, must have at least three years of experience in each work classification they apply for and pass a separate exam for each classification.2Michigan Department of Licensing and Regulatory Affairs. Mechanical Examination, Licensing/Registration and Application Information General contractors are responsible for confirming that every sub they bring on holds the appropriate license before work begins.
Getting Licensed
For a residential builder or M&A license, applicants must complete 60 hours of approved prelicensure education before sitting for the exam.3Michigan Department of Licensing and Regulatory Affairs. Prelicensure Education Requirements for Residential Builder and Maintenance and Alteration Contractor The exam covers trade skills, building codes, and construction law.
The initial application fee is $195.4Michigan Department of Licensing and Regulatory Affairs. License Fees Licenses renew every three years by May 31, and the renewal fee is $150. Miss the deadline and you pay an additional $20 late fee, which rises to $35 once you’re more than 60 days past expiration.5Michigan Department of Licensing and Regulatory Affairs. License/Registration Renewals
What Happens If You Work Unlicensed
Working as an unlicensed residential builder or M&A contractor in Michigan is a misdemeanor. For a first offense, the fine ranges from $5,000 to $25,000, with the possibility of up to a year of imprisonment, or both.6Michigan Legislature. Michigan Code 339.601 – Practicing Regulated Occupation or Using Designated Title The $5,000 is the floor, not the ceiling. Repeat offenses carry enhanced penalties.
A court that finds a violation must also order restitution to affected parties. Anyone harmed by unlicensed work can seek an injunction to stop it, and if the injunction is granted the unlicensed contractor owes actual costs and attorney fees.6Michigan Legislature. Michigan Code 339.601 – Practicing Regulated Occupation or Using Designated Title For most other regulated occupations under the Occupational Code, a first offense carries a $500 fine and 90 days. The legislature singled out residential builders and M&A contractors for much harsher treatment.
Losing the Right to Get Paid
The financial consequence that ruins unlicensed subcontractors isn’t the fine. It’s MCL 339.2412, which bars an unlicensed residential builder or M&A contractor from bringing or maintaining a lawsuit to collect payment for work that required a license. To recover in court, the contractor has to prove they were licensed during the entire performance of the work, not just at the moment the contract was signed.6Michigan Legislature. Michigan Code 339.601 – Practicing Regulated Occupation or Using Designated Title In practice, a homeowner or general contractor can accept tens of thousands of dollars of finished work, refuse to pay, and the unlicensed sub has no legal recourse.
Michigan courts have held that contracts with unlicensed residential builders are voidable by the homeowner. The statute was designed as a shield for the public, not a sword, so an unlicensed contractor can still defend against a homeowner’s suit for a refund. They just can’t bring their own claim for unpaid work.
Construction liens are treated the same way. Under Michigan’s Construction Lien Act, a contractor has no right to a lien on a residential structure unless properly licensed. Record a lien anyway and the property owner can sue to discharge it, with the unlicensed contractor liable for all damages caused by the improper lien, including the owner’s attorney fees and court costs.7Michigan Legislature. Construction Lien Act 570.1114a
One narrow exception exists. If the specific work performed doesn’t actually fall within the crafts and trades the Occupational Code requires a license for, an unlicensed contractor may still have standing to sue for payment. Michigan courts have allowed payment lawsuits where the work at issue, such as installing an iron railing, did not constitute a licensed trade. It’s a fact-intensive argument that most contractors lose.
When a License Isn’t Required
Homeowners working on their own primary residence do not need a contractor’s license. They can pull permits themselves, though they still have to comply with local building codes and pass the same inspections a licensed contractor would face.8White Lake Township. Contractor Permits vs Homeowner Permits Homeowner permits aren’t cheaper, faster, or held to a lower standard, and a licensed contractor cannot legally work under a permit pulled by the homeowner.
The exemption is narrower than people think. Hire someone else to do the work and that person needs a license, no matter the size of the project. Landlords working on rental properties they don’t personally live in don’t qualify either.
Contract Disclosure That Protects Your Lien Rights
Holding the right license isn’t the end of the story. Michigan’s Construction Lien Act requires residential work contracts to be in writing and to include specific disclosures, including a statement that the contractor is required to be licensed along with the license number.9Michigan Legislature. Construction Lien Act 570.1114 The disclosure applies to residential builders, M&A contractors, electricians, plumbing contractors, and mechanical contractors.
A handshake agreement, or a written contract that omits the disclosure, can wipe out your lien rights even when your license is current. The statute also requires the disclosure to appear in type no smaller than the body of the contract, so burying it in fine print won’t cure the problem. Subcontractors who want to preserve the ability to collect should treat the contract paperwork with the same care as the license itself.