Licensed vs. Unlicensed Restoration Work in Michigan

What actually requires the license

Michigan's Occupational Code was created to license and regulate people who construct residential structures, or who undertake the repair, alteration, addition, or improvement of a residential structure for compensation. In a restoration context, this generally covers rebuilding framing, replacing drywall, roofing work, and similar structural reconstruction, work that goes beyond removing water or drying a space.

What's murkier: mitigation-only work

Pure mitigation, water extraction, drying, dehumidification, mold remediation cleaning, doesn't always fit the same reconstruction-focused licensing category the way rebuilding does. This is a genuinely gray area in how the license requirement applies, and it means the safest approach for a homeowner is to ask a company directly which license, if any, applies to the specific scope you're hiring them for, rather than assuming "restoration company" is a single defined, licensed category.

What happens if someone operates without a required license

Operating as an unlicensed residential builder or maintenance and alteration contractor in Michigan is a misdemeanor. A first offense is punishable by a fine of not less than $5,000 and not more than $25,000, imprisonment for up to 93 days, or both. A second or subsequent offense raises the potential imprisonment term to up to one year. Michigan's Attorney General's office has also run a pretrial diversion program specifically targeting unlicensed builder cases, an indication this is an actively enforced area, not a rule that exists only on paper.

The contract risk this creates for you

Under Michigan law, a contract entered into by an unlicensed residential builder is unenforceable. In practice, this means an unlicensed contractor who did reconstruction work cannot sue you for payment if a dispute arises, which sounds like it favors the homeowner, but it also means you have far less legal footing if the work itself is defective, since the normal contract-based remedies may not apply the same way.

How to actually verify a license, not just ask about one

LARA maintains a public license lookup for Residential Builder and Maintenance and Alteration Contractor licenses. Verify the license number the contractor gives you against that public record yourself rather than relying on a card, a truck decal, or a verbal claim, all of which can be outdated or simply false.

Why this distinction matters more after a disaster

Storm, fire, and flood events tend to bring a wave of contractors into an area quickly, some of them from out of state and unfamiliar with, or indifferent to, Michigan's specific licensing requirements. The urgency of needing repairs done fast is exactly the condition under which skipping this verification step is most tempting, and most risky.

The one question that cuts through the confusion

Ask directly: "For the reconstruction portion of this job, what's your Michigan Residential Builder or M&A Contractor license number?" A company that can't answer immediately, or that gets evasive about the reconstruction/mitigation distinction, is worth a second look before you sign anything.

What licensing does not tell you

A valid license confirms a legal baseline, that the person or company has met Michigan's requirements to perform reconstruction work. It does not, by itself, confirm quality of workmanship, pricing fairness, or business ethics. Licensing is a floor, not a guarantee, which is why the other questions in the companion article on what to ask a contractor still matter even after you've confirmed a license is active.

What to do if you discover mid-project that a contractor isn't licensed

Stop authorizing further reconstruction work immediately and document the situation, including any payments already made. Because Michigan law makes an unlicensed builder's contract unenforceable, your legal position depends heavily on what's already been paid and what work has already been completed; this is a point at which getting independent advice, rather than continuing to rely on the same contractor's guidance, is worth the delay.