Michigan Residential Builder Licensing & the $600 Threshold
Michigan licenses residential builders and maintenance & alteration (M&A) contractors through LARA's Bureau of Construction Codes. This chapter covers who issues the license, the $600 contract threshold that triggers licensure, the 60-hour prelicensure education requirement, and the two closed-book exam parts.
The board and the Occupational Code (MCL 339.2401 et seq.)
Residential builders and maintenance & alteration contractors in Michigan are licensed by the Department of Licensing and Regulatory Affairs (LARA), Bureau of Construction Codes, under the Residential Builders and Maintenance & Alteration Contractors Board. The governing law is Article 24 of the Occupational Code, MCL 339.2401 and following. The board sets qualification standards, approves prelicensure education, administers examinations through its testing vendor PSI, issues licenses, and disciplines licensees. A Residential Builder license covers building or improving residential structures generally, while a Maintenance & Alteration Contractor license is limited to the specific trades or classifications listed on it.
When a license is required — the $600 threshold
Under MCL 339.2403, a person must hold a license to engage in the business of, or act as, a residential builder or M&A contractor when the combined contract price for labor and materials on a residential (or combination residential-commercial) structure exceeds $600. Because the trigger is only $600, nearly all paid residential construction, alteration, and repair work in Michigan requires a license. Building for one's own occupancy can fall outside the license requirement, but a person who builds or improves residential structures for others as a business must be licensed.
Prelicensure education, the two exam parts, and license term
Before taking the licensing examination, an applicant must complete 60 hours of board-approved prelicensure education covering business management, estimating, contracts, and construction standards. The examination has two closed-book parts delivered by PSI: Part 1, Business and Law (50 questions, 75 minutes, 36 of 50 to pass, which is 72%), and Part 2, the trade portion (110 questions, 180 minutes, 80 to pass, which is 73%). Michigan does not accept the NASCLA exam. A residential builder license, once issued, is valid for a three-year licensing cycle and must be renewed with continuing-competency requirements.