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Business Review Western MI
Business Review Western MI
Law mandates training, targets unlicensed builders
(wgvu) - Law mandates training, targets unlicensed builders

Jan. 3, 2008

By B. Candace Beeke

The quartet of bills signed by the governor two weeks ago signal a
turning point for the residential building industry, which will face new
education requirements and higher licensing fees June 1, plus much
tougher enforcement effective immediately.

Gov. Jennifer Granholm signed Senate Bills 450-453 Dec. 20, requiring,
for the first time, formal training for home builders. Passing a written
exam was previously all that was required to obtain a license.

Now an individual must take 60 hours of a state-approved curriculum
before taking the exam, plus continuing education.

I don't see it as an elimination tool, said Jeffrey Smith,
president of the Home Builders As sociation of Greater Kala mazoo and
owner of Dur wood Custom Homes in Kalamazoo.

I see it more as a means to raise the professional level of (the
industry), so over time, it may level the playing field.

Now, licensed builders face competition from unlicensed individuals
performing lower-cost work. The new laws

immediately stiffen penalties for unlicensed builders, raising a
first-offense fine from a maximum of $500 to not less than $5,000, and
up to $25,000 and/or imprisonment of up to a year.

It will have a sobering impact, said Dale Shugars, HBAGK
executive vice president.

The continuing-ed component requires new licensees to complete three
hours of continuing competency each calendar year during the first
six years of licensure, and 21 hours every three years after.

Who will offer such training, which must be approved by the Department
of Labor and Economic Growth, has yet to be determined.

HBAGK, which already offers a pre-exam prep course, intends to offer
both the prelicensure training and continuing ed beginning June 1,
Shugars said. He expects the private sector and community colleges to
create curriculums, as well.

Overall, the legislation in creased costs for builders, with licensing
fees hiked from $40 to $60 per year. The cost for the education
components has yet to be tallied but likely will reach between $500 and
$1,000 for prelicensing courses, Shugars guessed.

It's a cost of doing business, Smith said. If someone's
serious about getting into the business, this is just a cost factor to
be incurred.

The group does not expect housing prices to be significantly affected
by the new costs.

However, an additional benefit of the greater requirements may be the
thinning out of not only unlicensed competition but the occasional

There are 18,000 licensed builders in the state of Michigan,
Smith said. One thousand eight hundred of those belong to the Home
Builders Association of Michigan. We don't know how many (of the
18,000) are actually using those licenses .

With the continuing-ed requirement, they may allow that license to
lapse, he said.

To read the bills, go to and select Business Review
Western Michigan.
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