Yes. Subcontractors need a license in Michigan whenever the work they perform is a licensed trade, because the state licenses the work itself, not the hiring relationship. There is no separate “subcontractor license”: a sub building homes needs a residential builder license, a sub doing roofing or masonry needs a maintenance and alteration (M&A) contractor license in that craft, and a sub doing electrical, plumbing, or mechanical work needs the specialty trade license for it. Whether a homeowner hired you directly or a general contractor brought you onto a job makes no difference.
Which License Your Work Requires
Michigan splits residential construction into three licensing tracks, and your trade decides which one applies.
Residential Builder
A residential builder license covers the construction of new residential structures for a fixed price, fee, or percentage. If you take on whole-house or large-scale residential construction as a sub, this is the license. The Department of Licensing and Regulatory Affairs (LARA) administers it under Article 24 of the Michigan Occupational Code.
Maintenance and Alteration Contractor
An M&A license covers work on existing residential properties, and it is issued craft by craft. The qualifying trades listed in statute are carpentry, concrete, swimming pool installation, basement waterproofing, excavation, insulation, masonry, painting and decorating, roofing, siding and gutters, screen or storm sash installation, tile and marble, and house wrecking.1Michigan Legislature. Michigan Compiled Laws 339.2404 Your license names the specific craft you qualified in. You can take on work in a second trade only if it is incidental to the one you are licensed in.
Electrical, Plumbing, and Mechanical
These three trades are regulated separately under Michigan’s Skilled Trades Regulation Act rather than Article 24. Mechanical contractors, for example, need at least three years of experience in each work classification they apply for and must pass a separate exam for each one.2Michigan Department of Licensing and Regulatory Affairs. Mechanical Examination, Licensing/Registration and Application Information General contractors who hire subs are responsible for confirming each one holds the right license before work begins.
What You Lose by Working Unlicensed
The financial cost of skipping licensure usually hits before the criminal one does. Under MCL 339.2412, an unlicensed residential builder or M&A contractor cannot bring or maintain a lawsuit to collect payment for work that required a license. You have to prove you were licensed for the entire time you performed the work, not just when the contract was signed.3Michigan Legislature. Michigan Code 339.601 – Practicing Regulated Occupation or Using Designated Title A homeowner or general contractor can accept tens of thousands of dollars of finished work, refuse to pay, and leave an unlicensed sub with no way to sue.
Michigan courts have treated contracts with unlicensed residential builders as voidable by the homeowner. The statute was built as a shield for the public rather than a sword, so an unlicensed contractor can still defend against a homeowner’s lawsuit seeking a refund. They just cannot bring their own claim for unpaid work.
Construction liens go the same way. Under Michigan’s Construction Lien Act, a contractor has no right to a construction lien on a residential structure unless properly licensed. Record one anyway, and the owner can sue to discharge it and make the contractor pay all damages caused by the improper lien, including attorney fees and court costs.4Michigan Legislature. Construction Lien Act 570.1114a
One narrow exception exists. If the specific work you did is not actually among the crafts and trades that require licensing, Michigan courts have let unlicensed contractors sue for payment. An iron railing installation has been treated this way. It is a fact-intensive argument that most contractors lose.
Criminal Penalties
Working as an unlicensed residential builder or M&A contractor in Michigan is a misdemeanor. A first offense carries a fine of $5,000 to $25,000, up to one year of imprisonment, or both. The $5,000 is the floor, not the ceiling. Repeat offenses carry enhanced penalties.3Michigan Legislature. Michigan Code 339.601 – Practicing Regulated Occupation or Using Designated Title
A court that finds a violation must also order restitution to anyone harmed. A harmed party can seek an injunction to stop the work, and if granted, the unlicensed contractor owes actual costs and attorney fees on top of everything else.
The Homeowner Exemption and Its Limits
Michigan law lets homeowners pull permits and do work on their own primary residence without a contractor’s license. They still have to comply with local building codes and pass the same inspections. Homeowner permits are not cheaper, not faster, and not held to a lesser standard, and it is illegal for a licensed contractor to work under a permit a homeowner pulled.5White Lake Township. Contractor Permits vs Homeowner Permits
The exemption is narrower than most people think. If a homeowner hires anyone else to do the work, that person needs a license, regardless of project size. Landlords doing work on rental properties they do not personally live in do not qualify either. For a subcontractor, there is no version of this exemption that applies to you: if you are being paid to do the work, you need the license.
Getting Licensed and Staying Licensed
For a residential builder or M&A license, applicants must complete 60 hours of approved prelicensure education before sitting for the exam, which tests trade skills, building codes, and construction law.6Michigan Department of Licensing and Regulatory Affairs. Prelicensure Education Requirements for Residential Builder and Maintenance and Alteration Contractor
The initial application fee is $195.7Michigan Department of Licensing and Regulatory Affairs. License Fees Licenses renew every three years by May 31, with a $150 renewal fee. Miss the deadline and a $20 late fee applies, rising to $35 after 60 days.8Michigan Department of Licensing and Regulatory Affairs. License/Registration Renewals
Continuing education depends on when you were first licensed. Licensees from before January 1, 2009 need 3 hours per three-year cycle covering building codes, safety, and changes in construction law. Anyone licensed on or after that date needs 21 hours in each of their first two three-year cycles, including the same 3 mandatory hours plus 18 additional hours. After six years of licensure, the requirement drops back to 3 hours.9Michigan Department of Licensing and Regulatory Affairs. Residential Builders and M&A Contractors Continuing Competency
Protect Your Lien Rights in the Contract
Holding the license is not the whole job. Michigan’s Construction Lien Act requires contracts for residential work to be in writing and to include specific disclosures, including a statement that the contractor is required to be licensed and the contractor’s license number.10Michigan Legislature. Construction Lien Act 570.1114 The requirement applies to residential builders, M&A contractors, electricians, plumbing contractors, and mechanical contractors.
A handshake deal, or a contract that omits these disclosures, can destroy your lien rights even if your license is in perfect standing. The disclosure has to appear in type no smaller than the body of the contract, so burying it in fine print will not save it. Treat the contract paperwork with the same seriousness as the license itself.