Bill Text: MI HB5834 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Liens; construction; occupational code; revise to reflect abolition of homeowner construction lien recovery fund. Amends secs. 2404, 2409 & 2411 of 1980 PA 299 (MCL 339.2404 et seq.). TIE BAR WITH: HB 5830'10
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2010-08-24 - Assigned Pa 151'10 With Immediate Effect [HB5834 Detail]
Download: Michigan-2009-HB5834-Engrossed.html
HB-5834, As Passed House, June 16, 2010
HOUSE BILL No. 5834
February 17, 2010, Introduced by Rep. Durhal and referred to the Committee on Appropriations.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 2404, 2409, and 2411 (MCL 339.2404, 339.2409,
and 339.2411), sections 2404 and 2411 as amended by 2007 PA 157 and
section 2409 as amended by 1988 PA 463.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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 the following:
(a)
Any amount required to be paid under the construction lien
act,
1980 PA 497, MCL 570.1101 to 570.1305.
(b)
A a copy of an operator's license or state personal
identification card, to be used by the department only for proof of
identity of the applicant.
(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
authorizes 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
includes 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 does 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 the craft for 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.
(5)
Beginning the license cycle after the effective date of
the
amendatory act that added this subsection December 21, 2007,
the department shall issue the license of a residential builder and
residential maintenance and alteration contractor for a period of 3
years
in duration. Beginning the effective date of the amendatory
act
that added this subsection December
21, 2007, an applicant for
renewal of a residential builder or maintenance and alteration
contractor license shall state that he or she has a current copy of
the Michigan residential code and has fulfilled the appropriate
requirements regarding continuing competency.
(6)
Beginning the effective date of the amendatory act that
added
this subsection December 21,
2007, a licensee shall maintain
documentation, for at least 5 years, of activities meeting the
continuing competency requirements as prescribed under this
article.
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.
Sec. 2411. (1) A complaint filed under this section or article
5, or both, shall be made within 18 months after the latest of the
following regarding a residential structure or a combination of
residential and commercial structure as follows:
(a) In the case of a maintenance and alteration contract:
(i) Completion.
(ii) Occupancy.
(iii) Purchase.
(b) In the case of a project requiring an occupancy permit:
(i) Issuance of the certificate of occupancy or temporary
certificate of occupancy.
(ii) Closing.
(2) A licensee or applicant who commits 1 or more of the
following
shall be is 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 that 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 this state
or
of a political subdivision of the this state.
(f) In a residential maintenance and alteration contract,
failure to furnish to a lender the purchaser's signed completion
certificate executed upon completion of the work to be performed
under 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 the control or direction of the business of the licensee
resulting from any other occurrence or event.
(h) Failure to deliver to the purchaser the entire agreement
of
the parties including any finance and any or other
charge
arising
out of or incidental to the agreement when if 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 that 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 the
salesperson 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 from a person other
than the residential builder or residential maintenance and
alteration contractor under whom the person is licensed.
(l) 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) Workmanship not meeting the standards of the Michigan
residential code as promulgated under the Stille-DeRossett-Hale
single state construction code act, 1972 PA 230, MCL 125.1501 to
125.1531.
(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,
1980 PA 497, MCL 570.1101 to 570.1305, regardless of whether
the
person was performing services as a licensee under this
article;
under the electrical administrative act, 1956 PA 217, MCL
338.881
to 338.892; or under the state plumbing act, 2002 PA 733,
MCL
338.3511 to 338.3569. The department shall not renew a license
or
issue a new license 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,
1961 PA 236, MCL 600.6013.
(3) (4)
The department shall conduct a
review upon notice that
the licensee has violated the asbestos abatement contractors
licensing act, 1986 PA 135, MCL 338.3101 to 338.3319. The
department may suspend or revoke that person's license for a
knowing violation of the asbestos abatement contractors licensing
act, 1986 PA 135, MCL 338.3101 to 338.3319.
(4) (5)
Notwithstanding article 5, the
following apply to
administrative proceedings regarding workmanship under subsection
(2)(m):
(a) A complaint submitted by an owner shall describe in
writing to the department the factual basis for the allegation. The
homeowner shall send a copy of the initial complaint to the
licensee concurrent with the submission of the complaint to the
department.
(b) The department shall presume the innocence of the licensee
throughout the proceeding until the administrative law hearing
examiner finds otherwise in a determination of findings of fact and
conclusions of law under article 5. The licensee has the burden of
refuting evidence submitted by a person during the administrative
hearing. The licensee also has the burden of proof regarding the
reason deficiencies were not corrected.
(c) Upon receipt of a building inspection report issued to the
department by a state or local building enforcement official
authorized to do so under the Stille-DeRossett-Hale single state
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531, which
report verifies or confirms the substance of the complaint, the
department shall send by certified mail a copy of the verified
complaint
to the licensee. Failure of If
the department to does not
send
a copy of the verified complaint within 30 days of after
receipt
of the building inspection report, prevents the department
from
assessing shall not assess a fine against the licensee under
article
6, but does not prevent the department from pursuing may
pursue restitution, license suspension, or other remedies provided
under this act.
(d) A licensee may contractually provide for an alternative
dispute resolution procedure to resolve complaints filed with the
department. The procedure shall be conducted by a neutral third
party for determining the rights and responsibilities of the
parties and shall be initiated by the licensee, who shall provide
notice of the initiation of the procedure to the complainant by
certified mail not less than 30 days before the commencement of
that procedure. The procedure shall be conducted at a location
mutually agreed to by the parties.
(e) The department shall not initiate a proceeding against a
licensee
under this subsection in the case of a if the licensee who
has
contractually provides provided for
an alternative dispute
resolution procedure that has not been utilized and completed
unless it is determined that the licensee has not complied with a
decision or order issued as a result of that alternative dispute
resolution procedure, that alternative dispute resolution procedure
was not fully completed within 90 days after the filing of the
complaint with the department, or an alternative dispute resolution
procedure meeting the requirements of subdivision (d) is not
available to the complainant.
(f) The complainant shall demonstrate that notice has been
provided to the licensee describing reasonable times and dates that
the residential structure was accessible for any needed repairs and
proof acceptable to the department that the repairs were not made
within 60 days after the sending of the notice. This subdivision
does
not apply where if the department determines a necessity to
safeguard the structure or to protect the occupant's health and
safety and, in such case, the department may utilize any remedy
available
under section 504(3)(a) through (d) 504(3).
(g)
In the case where If the owner and licensee have agreed
contractually on mutually acceptable performance guidelines
relating to workmanship, the department shall consider those
guidelines in its evaluation of a complaint. The guidelines shall
be consistent with the Stille-DeRossett-Hale single state
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.
(5) (6)
In any case where If the licensee or respondent fails
to
appear , or
participate , in or
defend any action, the board
shall issue an order granting by default the relief requested,
based
upon proofs submitted to and findings made , by the hearing
examiner after a contested case.
(6) (7)
As used in this section,
"verified complaint" means a
complaint in which all or a portion of the allegations have been
confirmed by an affidavit of the state or local building official.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 5830(request no.
04360'09 *) of the 95th Legislature is enacted into law.
