Michigan requires a state license for anyone who builds, remodels, or repairs residential structures. The Department of Licensing and Regulatory Affairs (LARA) issues two license types: a Residential Builder license and a Maintenance & Alteration (M&A) Contractor license. Getting either one involves completing 60 hours of pre-licensing education, passing a state exam, meeting insurance requirements, and submitting an application with a $195 fee.
Choosing the Right License Type
The Residential Builder license is the broader of the two. It allows you to work on entire residential construction projects, from new builds to full renovations. If you plan to act as a general contractor on homes, this is the license you need.
The Maintenance & Alteration Contractor license is more limited. It covers specific trades that are listed directly on your license, and you can only perform work in those listed categories. The available trades include carpentry, concrete, excavation, insulation, masonry, siding, roofing, screens and storm sash, gutters, tile and marble, house wrecking, swimming pools, and basement waterproofing. If your work falls within one or a few of these categories and you don’t need to take on full construction projects, the M&A license is the right fit.
Both licenses follow the same application process, carry the same fees, and require the same pre-licensing education.
Complete 60 Hours of Pre-Licensing Education
Before you can sit for the exam or even submit a license application, you must complete 60 hours of approved coursework. The state mandates at least 6 hours in each of seven core subjects:
- Business Management, Estimating, and Job Costing (6 hours)
- Design and Building Science (6 hours)
- Contracts, Liability, and Risk Management (6 hours)
- Marketing and Sales (6 hours)
- Project Management and Scheduling (6 hours)
- The Michigan Residential Code (6 hours)
- MIOSHA Construction Safety Standards (6 hours)
That accounts for 42 hours. The remaining 18 hours can come from any other topics on LARA’s approved course list, giving you some flexibility to focus on areas relevant to your trade. Multiple schools and online providers offer state-approved programs, and costs typically range from $500 to $1,000 depending on the provider and format. Make sure any course you choose appears on Michigan’s approved provider list before enrolling.
Pass the State Licensing Exam
Once your 60 hours are complete, you’re eligible to take the state exam. Michigan uses a third-party testing service (PSI) to administer the test at locations throughout the state. The exam covers the same subjects from your coursework: building codes, business practices, safety standards, and project management.
You’ll need to schedule your exam through the testing provider and pay their exam fee separately from the state application fee. Bring valid photo identification and your proof of education completion to the testing center. If you don’t pass on your first attempt, you can retake the exam, though you may need to wait a set number of days and pay the exam fee again.
Meet Insurance and Workers’ Compensation Requirements
Michigan takes insurance compliance seriously for licensed contractors. The specific requirements depend on your business structure and whether you have employees.
If you operate as a corporation, LLC, or partnership, you must either carry a workers’ compensation insurance policy or file a Notice of Exclusion Form (WC-337) with the state. An exclusion form is only an option when all of your employees qualify for exclusion under the law. For an LLC, that means every employee must also be a member, a manager, and own at least 10% interest in the business. For a corporation, every employee must be a corporate officer who owns at least 10% of the stock. If you hire any outside employees or use subcontractors, you need a workers’ compensation policy regardless of your business structure.
Sole proprietors have a simpler threshold. You only need workers’ compensation coverage if you have one full-time employee (working 35 or more hours per week for 13 or more weeks) or three or more part-time employees. If your only workers are your spouse, child, or parent, you can file the exclusion form instead.
Beyond workers’ compensation, you’ll want general liability insurance to protect yourself against property damage or injury claims on job sites. While the licensing statute focuses on workers’ comp, many clients and general contractors will require proof of general liability coverage before they’ll hire you.
Submit Your Application
With your education, exam, and insurance documentation in order, you can submit your license application to LARA. The initial application fee is $195 for either a Residential Builder or Maintenance & Alteration Contractor license. You’ll need to provide proof of your completed pre-licensing education, your passing exam score, and documentation of your insurance or workers’ compensation status.
Processing times vary, but plan for several weeks between submitting your application and receiving your license. Make sure all your documents are complete before submitting, as missing paperwork will slow things down.
Keeping Your License Active
Michigan contractor licenses renew every three years, with all renewals due by May 31 of the renewal year. The renewal fee is $150.
You’ll also need to complete continuing education before each renewal, and the number of hours depends on how long you’ve been licensed. During your first and second renewal cycles (covering your first six years as a licensee), you must complete 21 hours of continuing education per cycle. Starting with your third renewal and every cycle after that, the requirement drops to just 3 hours. This front-loaded structure ensures newer contractors stay current on codes and practices during the early years of their careers while reducing the burden on experienced professionals.
If you let your license lapse, you may need to go through additional steps to reinstate it, so keep track of your renewal date and CE hours well in advance.
Total Costs to Expect
Here’s a rough breakdown of what you’ll spend to get licensed:
- Pre-licensing education (60 hours): $500 to $1,000, depending on the provider
- State exam fee: paid separately to the testing provider
- Initial application fee: $195
- Insurance costs: varies widely based on your trade, business structure, and coverage levels
All in, most applicants spend somewhere between $800 and $1,500 before insurance to get their license. Workers’ compensation and general liability premiums add to your ongoing costs but depend heavily on your payroll size, the type of work you do, and your claims history.