339. 2401 Definitions.

Sec. 2401As used in this article:

    (a) "Residential builder" means a person engaged in the construction of a residential structure or a combination residential and commercial structure who, for a fixed sum, price, fee, percentage, valuable consideration, or other compensation, other than wages for personal labor only, undertakes with another or offers to undertake or purports to have the capacity to undertake with another for the erection, construction, replacement, repair, alteration, or an addition to, subtraction from, improvement, wrecking of, or demolition of, a residential structure or combination residential and commercial structure; a person who manufactures, assembles, constructs, deals in, or distributes a residential or combination residential and commercial structure which is prefabricated, reassembled, precut, packaged, or shell housing; or a person who erects a residential structure or combination residential and commercial structure except for the person's own use and occupancy on the person's property.

    (b) "Residential maintenance and alteration contractor" means a person who, for a fixed sum, price, fee, percentage, valuable consideration, or other compensation,other than wages for personal labor only, undertakes with another for the repair, alteration, or an addition to, subtraction from, improvement of, wrecking of, or demolition of a residential structure or combination residential and commercial structure, or building of a garage, or laying of concrete on residential property, or who engages in the purchase, substantial rehabilitation or improvement,and resale of a residential structure, engaging in that activity on the same structure more than twice in 1 calendar year, except in the following instances:

   (i)    If the work is for the person's own use and occupancy.

    (ii)    If the rehabilitation or improvement work of residential type property or a structure is contracted for, with, or hired entirely to be done and performed for the owner by a person licensed under this article.

    (iii)    If work is performed by a person employed by the owner to perform work for which the person is licensed by the state.

    (c) "Residential structure" means a premises used or intended to be used for a residence purpose and related facilities appurtenant to the premises, used or intended to be used, as an adjunct of residential occupancy.

    (d) "Salesperson" means an employee or agent, other than a qualifying officer, of a licensed residential builder or residential maintenance and alteration contractor, who for a salary, wage, fee, percentage, commission, or other consideration, sells or attempts to sell, negotiates or attempts to negotiate, solicits for or attempts to solicit for, obtains or attempts to obtain a contract or commitment for, or furnishes or attempts or agrees to furnish, the goods and services of a residential builder or residential maintenance and alteration contractor, except a person working for a licensed residential builder or residential maintenance and alteration contractor who makes sales which are occasional and incidental to the person's principal employment.

    (e) "Wages" means money paid or to be paid on an hourly or daily basis by an owner, lessor, or occupant of a residential structure or combination residential and commercial structure as consideration for the performance of personal labor on the structure by a person who does not perform or promise to perform the labor for any other fixed sum, price, fee, percentage, valuable consideration, or other compensation and who does not furnish or agree to furnish the material or supplies required to be used in the performance of the labor or an act defined in subdivision or (b).

    Sec. 2402. A residential builders'and maintenance and alteration contractors' board is created. Four members shall be licensed residential builders, and 2 members shall be licensed maintenance and alteration contractors

339.2403 Engaging in business or acting in capacity of residential builder or residential maintenance and alteration contractor or salesperson without license. [M.S.A. 18.425

    339 2403. Notwithstanding article 6, a person may engage in the business of or act in the capacity of a residential builder or a residential maintenance and alteration contractor or salesperson in this state without having a license, if the person is 1 of the following:

    (a) An authorized representative of the United States government, this state, or a county, township, city, village, or other political subdivision of this state.

    (b) An owner of property, with reference to a structure on the property for the owner's own use and occupancy.

    (c) An owner of rental property, with reference to the maintenance and alteration of that rental property.

    (d) An officer of a court acting within the terms of the officer's office.

    (e) A person other than the salesperson who engages solely in the business of performing work and services under contract with a residential builder or a residential maintenance and alteration contractor licensed under this article.

    (f) A person working on 1 undertaking or project by 1 or more contracts, the aggregate contract price for which labor, material, and any other item is less than $600.00. This exemption does not apply if the work of a construction is only a part of a larger or major operation, whether undertaken by the same or a different residential builder or residential maintenance and alteration contractor, or in which a division of the operation is made in contracts of amounts less than $600.00, to evade this act.

    (g) An electrical contractor who is licensed under Act No. 217 of the Public Acts of 1956, as amended, being sections 338.881 to 338.892 of the Michigan Compiled Laws. This exemption applies only to the electrical installation, electrical maintenance, or electricalrepair work performed by the electrical contractor.

    (h) A plumbing contractor licensed under Act No. 266 of the Public Acts of 1929, as amended, being sections 338.901 to 338.917 of the Michigan Compiled Laws. This exemption applies only to plumbing installation, plumbing maintenance, or plumbing repair work performed by the plumbing contractor.

    (i) A mechanical contractor who is licensed under the mechanical contractors act. This exemption applies only to mechanical installation, mechanical maintenance, or mechanical repair work performed by the mechanical contractor.

339. 2404 Evidence of good moral character and financial stability; payment under construction lien act; examination; issuance of residential maintenance and alteration contractor's license; scope of crafts and trades; place of business; branch office license.

    Sec. 2404.    (1) The department may require an applicant, licensee, or each partner, trustee, director, officer, member, or shareholder to submit evidence of good moral character and financial stability. Before the issuance of a license, an applicant shall submit any amount required tobe paid under the construction lien act, Act No. 497 of the Public Acts of 1980, being sections 570.1101to 570.1305 of the Michigan Compiled Laws.

    (2) The department shall require an applicant for a license to pass an examination establishing that the applicant has a fair knowledge of the obligations of a residential builder or residential maintenance and alteration contractor to the public and the applicant's principal, and the statutes relating to the applicant's licensure.

    (3) The department, upon application, may issue a residential maintenance and alteration contractor's license to an applicant who, upon examination, qualifies for a license, which shall authorize the licensee according to the applicant's qualifications, crafts, and trades to engage in the activities of a residential maintenance and alteration contractor. A license shall include the following crafts and trades: carpentry; concrete; swimming pool installation; waterproofing a basement; excavation; insulation work; masonry work; painting and decorating; roofing; siding and gutters; screen or storm sash installation; tile and marble work; and house wrecking. The license shall specify the particular craft or trade for which the licensee has qualified. This subsection shall not prohibit a specialty contractor from taking and executing a contract involving the use of 2 or more crafts or trades if the performance of the work in the craft or trade, other than in which the person is licensed, is incidental and supplemental to the performance of work in the craft for which the specialty contractor is licensed.

    (4) A residential builder or residential maintenance and alteration contractor shall maintain a place of business in this state. If a residential builder or residential maintenance and alteration contractor maintains more than 1 place of business within this state, a branch office license shall be issued to the builder or contractor for each place of business so maintained.

339. 2405 Application for license by corporation, partnership, or association; designation and responsibilities of qualifying officer; age and license requirements; suspension, revocation, or denial of license.

    Sec. 2405    (1) If a license is applied for by a corporation, partnership, or association, the applicant shall designate 1 of its officers, partners, members, or managing agent as a qualifying officer who, upon taking and passing the examination, and upon meeting all other requirements of this article, shall be entitled to a license to act for the corporation, partnership, or association. The qualifying officer shall be responsible for exercising the supervision or control of the building or construction operations necessary

to secure full compliance with this article and the rules promulgated under this article. A license shall not be issued to a corporation, partnership, or association unless each partner, trustee, director, officer, member, and a person exercising control is at least 18 years of age and meets the requirements for a license under this article other than those relating to knowledge and experience.

    (2) The license of a corporation, partnership, or other association shall be suspended when a license or license application of a qualifying officer, partner, trustee, director, officer, member, or a person exercising control of the corporation, partnership, or other association is suspended, revoked, or denied. The suspension shall remain in force until the board determines that the disability createdby the suspension, revocation, or denial has been removed.

    (3) A suspension, revocation, or denial of a license of an individual shall suspend, revoke, or deny any other license held or applied for by that individual issued under this article. A suspension, revocation, or denial of a license by the department may suspend, revoke, or deny any other license held or applied for under this article by the qualifying officer of a corporation, partnership, or other association whose license is suspended, revoked, or denied.

(4) If the qualifying officer of a licensee ceases to be its qualifying officer, the license is suspended. However, upon request, the department may permit the license to remain in force for a reasonable time to permit the qualification of a new qualifying officer. History: 1980, Act 299, Imd. Eff. Oct. 21, 1980

339. 2406 Nonresident licensee; issuing license to foreign corporation; irrevocable consent to service of process; resolution authorizing consent; service of process or pleading.

   Sec. 2406.    A non-resident of this state may become a licensee under this article by conforming with this article. A license shall not be issued to a foreign corporation unless the corporation is authorized to do business in this state by the corporation and securities commission. The non-resident shall file an irrevocable consent to service of process. The consent shall be signed by the applicant or by an authorized officer, member, or partner of the applicant and shall be notarized. If the applicant is a corporation, consent shall be accompanied by a certified copy of the resolution of the corporation authorizing the consent. A process or pleading served upon the department shall be sufficient service upon the licensee. A process or pleading served upon the department under this section shall be in duplicate. The department immediately shall forward by registered mail1 copy of the process or pleading to the main office of the licensee served.History:1980, Act 299, Imd. Eff. Oct. 21, 1980

339. 2407 Licensing salesperson in employ of 1 builder or contractor; application for transfer and issuance of new license; submission of salesperson's license application.

   Sec. 2407   (1) A salesperson shall be licensed in the employ of only 1 residential builder or maintenance and alteration contractor. If a salesperson desires to change employment from 1 residential builder or maintenance and alteration contractor to another, the license shall be forwardedto the department and application made for a transfer and the issuance of a new license under the salesperson's new employer.

    (2) An application for a salesperson's license shall be submitted by the employing residential builder or residential maintenance and alteration contractor.

339. 2408 Repealed. 1988, Act 463, Eff. Sept. 1, 1989. This Section Has Been REPEALED

339. 2409 Failure to assessment; automatic supension of licenses; reporting certain changes.

    Sec. 2409.(1) Failure of a residential builder or residential maintenance and alteration contractor to pay within 90 days of notice of the required assessment under section 201(2) of the construction lien act, Act No. 497 of the Public Acts of 1980, being section 570.1201 of the Michigan Compiled Laws, shall result in the automatic suspension of all licenses issued under this article.

    (2) A licensee shall report to the department a change of name or address or a change of members or addresses of the partnership, association, or corporation holding a license under this article within 30 days after the change occurs.

339.2410 Repeating examination not required when making application for additional license.

   Sec. 2410. A person or qualifying officer for a corporation or member of a partnership or other business association who currently holds a residential builder ormaintenance and alteration contractor license shall not be required to repeat an examination for that license when making application for an additional license. However, a maintenance and alteration contractor who currently holds a license and makes application for a residential builders' license shallbe required to take an examination for that license.

339.2411 Complaint; conduct subject to penalty; suspension or revocation of license; violation of 338.3101 to 338.3319 or 408.1057 to 408.1060f.

    Sec. 2411.   (1) A complaint filed as prescribed in article 5 shall be made within 18 months after completion, occupancy, or purchase, whichever occurs later, of a residential structure or a combination of residential and commercial structure.

    (2) A licensee or applicant who commits 1 or more of the following shall be subject to the penalties set forth in article 6:

    (a) Abandonment without legal excuse of a contract, construction project, or operation engaged in or undertaken by the licensee.

    (b) Diversion of funds or property received for prosecution or completion of a specific construction project or operation, or for a specified purpose in the prosecution or completion of a construction project or operation, and the funds or property application or use for any other construction project or operation, obligation, or purposes.

    (c) Failure to account for or remit money coming into the person's possession which belongs to others.

    (d) A willful departure from or disregard of plans or specifications in a material respect and prejudicial to another, without consent of the owner or an authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with the plans and specifications.

    (e) A willful violation of the building laws of the state r of a political subdivision of the state.

    (f) In a maintenance and alteration contract, failure to furnish to a lender the purchaser's signed completion certificate executed upon completion of the work to be performedunder the contract.

    (g) If a licensed residential builder or licensed residential maintenance and alteration contractor, failure to notify the department within 10 days of a change in the control or direction of the business of the licensee resulting from a change in the licensee's partners, directors, officers, or trustees, or a change in thecontrol or direction of the business of the licensee resulting from any otheroccurrence or event.

    (h) Failure to deliver to the purchaser the entire agreement of the parties including finance and any other charge arising out of or incidental to the agreement when the agreement involves repair, alteration, or addition to, subtraction from, improvement of, wrecking of, or demolition of a residential structure or combination of residential and commercial structure, or building of a garage, or laying of concrete on residential property, or manufacture, assembly, construction, sale, or distribution of a residential or combination residential and commercial structure which is prefabricated, preassembled, precut, packaged, or shell housing.

    (i) If a salesperson, failure to pay over immediately upon receipt money received by the salesperson, in connection with a transaction governed by this article to the residential builder or residential maintenance and alteration contractor under whom thesalesperson is licensed.

    (j) Aiding or abetting an unlicensed person to evade this article, or knowingly combining or conspiring with, or acting as agent, partner, or associate for an unlicensed person, or allowing one's license to be used by an unlicensed person, or acting as or being an ostensible licensed residential builder or licensed residential maintenance and alteration contractor for an undisclosed person who does or shall control or direct, or who may have the right to control or direct, directly or indirectly, the operations of a licensee.

    (k) Acceptance of a commission, bonus, or other valuable consideration by a salesperson for the sale of goods or the performance of service specified in the article froma person other than the residential builder or residential maintenance and alteration contractor under whom the person is licensed Becoming insolvent, filing a bankruptcy action, becoming subject to a receivership, assigning for the benefit of creditors, failing to satisfy judgments or liens, or failing to pay an obligation as it becomes due in the ordinary course of business.

    (m) Poor workmanship or workmanship not meeting the standards of the custom or trade verified by a building code enforcement official.

    (3) The department shall suspend or revoke the license of a person licensed under this article whose failure to pay a lien claimant results in a payment being made from the homeowner construction lien recovery fund pursuant to the construction lien act, Act No. 497 of the Public Acts of 1980, being sections 570.1101 to570.1305 of the Michigan Compiled Laws, regardless of whether the person was performing services as a licensee under this article; under the electrical administrative act, Act No. 217 of the Public Acts of 1956, as amended, being sections 338.881 to 338.892 of the Michigan Compiled Laws; or under Act No. 266 of the Public Acts of 1929, as amended, being sections 338.901 to 338.917 of the Michigan Compiled Laws. The license shall not be renewed nor shall a new license be issued until the licensee has repaid in full to the fund the amount paid out plus the costs of litigation and interest at the rate set by section 6013 of the revised judicature act of 1961, Act No. 236 of the Public Acts of 1961, as amended, being section 600.6013of the Michigan Compiled Laws.

    (4) The department shall conduct a review upon notice by the department of public health that the licensee has violated the asbestos abatement contractors licensing act, Act No. 135 of the Public Acts of 1986, being sections 338.3101 to 338.3319 of the Michigan Compiled Laws, or sections 57 to 60f of the Michigan occupational safety and health act, Act No. 154 of the Public Acts of 1974, being sections 408.1057 to 408.1060 of the Michigan Compiled Laws and may suspend or revoke that person's license for a knowing violation of those acts.

339.2412 Action for collection of compensation for performance of act or contract; alleging and proving licensure.

    Sec. 2412. A person or qualifying officer for a corporation or member of a residential builder or residential maintenance and alteration contractor shall not bring or maintain an action in a court of this state for the collection of compensation for the performance of an act or contract for which a license is required by this article without alleging and proving that the person was licensed under this article during the performance of the act or contract.