Home Improvement Contractors: What You Need To Know The information is provided as a courtesy to assist in your dealings with contractors and others as you go forward with your PIP home improvements. It is important for you to keep in mind that MSHDA is NOT a party to the contract agreement and not responsible for enforcing any the contract.

If you plan to use a maintenance and alteration contractor, residential builder, painter or carpenter, you should always get at least two estimates.

Select a contractor with a reputation for honesty and good workmanship. If you don’t check out the contractor, you could end up with big problems. There several ways to check:

• Hire someone who has established a good working reputation in the community and does the type of work you require. The contractor should be in business full-time on a year round basis. All residential contractors must be licensed by the state of Michigan , hold property liability insurance and workers compensation insurance. Always ask prospective contractors for proof of current licensing and insurance.
• Ask your local Chamber of Commerce, Better Business Bureau, and local community building inspector for community references on prospective contractors.
• Check with the State of Michigan ’s Bureau of Commercial Services Licensing Division for Verification of Builders or Maintenance & Alteration License; call 517.241.9288 or check contractor listings on the following Web site: www.michigan.gov/builders.
• Check to make sure your prospective contractor is not listed on the Michigan Contractors/Builders Debarment List. Michigan does not have a debarment listing on its Web site. For this information, please contact Kathy Jones at 517.373.6419.
• Check Limited Liability Companies (LLC) and/or other corporation types for certificate of good standing with the State of Michigan Labor & Economic Growth www.cis.state.mi.us/bcs_corp/sr_corp.asp .
• Ask for names and telephone numbers of other customers for which the contractor has performed work. Talk to them and ask if they were happy with the contractor’s performance.
• Visit the contractor’s place of business to see if he or she operates professionally.

Obtain referrals from friends, neighbors, or relatives who have been pleased with a contractor’s work. Check with local building material suppliers for professional references.

Always obtain professional “scope of work” specifications from a design professional, local building inspector or agent specializing in residential inspections. This will insure all prospective contractors will be quoting prices on the exact same line items.

Be sure to get contractor bids in writing including line item costs i.e. roofing, siding, windows etc. and the total dollar amount of the project. A bid proposal should also state if the contractor:

• provide a final set of working plans and/or specifications before construction begins.
• allow you to make changes during construction if the changes are in writing.
• give you a complete written warranty on the work and materials.
• give you applicable maintenance procedures and produce manufactures warrantees on all equipment i.e. furnace, hot water heaters, appliances etc.

If possible, have your attorney or design professional review the contractual agreement before signing the agreement with your contractor.

The contractor must agree to all provisions of the Michigan State Housing Development Authority worksheet and contractor/borrower agreement (H-3) form. This agreement ensures that:

• You will be protected from law-suits if a worker is injured on the job.
• The contractor will provide lien wavers for all workers, sub-contractors and suppliers that provide labor and/or materials to your residence. The contractor must abide by all rules, regulations and provisions of the Michigan Lien Recovery Act.
• The contractor will secure all necessary permits and licenses to perform the work and to comply with all state and local codes and ordnances.

In addition to any other warranties, rights and remedies you may have, the contractor must agree to correct any defects in workmanship and material up to two years from the date of the Property Improvement Program (PIP) note.

When paying for your improvements as per contractual agreement always:

• Pay for completed tasks per line item (roofing, siding, window, doors etc.).
• Never pay a large portion or the full amount of the contract before the work is done.
• Get lien wavers from sub-contractors, labors and suppliers as they are paid. Record payments to date, sub-contractor and supplier balances.
• Never pay in cash. Always get receipt of payment.
• Make final payment only when you are satisfied with the results of your project.

NOTE: MSHDA is NOT a party to the contract agreement and not responsible for enforcing any such agreements.

If you have issues with your contractor:

• Consult with an attorney, legal aid.
• Consult with your local building inspector.
• Consult with your local prosecutor’s office or State of Michigan’s Bureau of Commercial Services, Enforcement Division at 517-241-9202.