Michigan Contractor Disciplinary Actions and License Revocation

Michigan's contractor licensing system includes formal enforcement mechanisms that can suspend, revoke, or permanently bar a contractor from operating legally in the state. Disciplinary actions are initiated and adjudicated through the Michigan Department of Licensing and Regulatory Affairs (LARA), which oversees the licensed contractor workforce under the authority of the Michigan Occupational Code (MCL 339) and the Michigan Residential Code. The scope of these enforcement powers extends across residential builders, maintenance and alteration contractors, electrical contractors, plumbers, HVAC technicians, and other specialty trades. Understanding how this enforcement framework is structured is essential for contractors maintaining licensure, consumers evaluating contractor credibility, and professionals navigating compliance with Michigan contractor licensing requirements.

Definition and scope

Disciplinary action against a Michigan contractor refers to any formal regulatory proceeding or administrative order that restricts, conditions, suspends, or terminates the privileges granted by a state-issued contractor license. The authority for these actions flows from the Michigan Occupational Code (MCL 339.101 et seq.), which establishes LARA's Bureau of Professional Licensing (BPL) as the primary enforcement body.

Scope of coverage:
This page addresses disciplinary actions under Michigan state licensing law as enforced by LARA and the BPL. It applies to licensees regulated under the Michigan Occupational Code, including residential builders and maintenance and alteration contractors governed by MCL 339, Article 24. Contractors holding licenses in electrical, plumbing, or mechanical trades are regulated under separate acts — the Michigan Electrical Administrative Act (MCL 338.881), the Plumbing Act (MCL 338.3511), and the Skilled Trades Regulation Act (MCL 339.5701) — though all fall under LARA's administrative umbrella.

Not covered: Federal contractor debarment, municipal license suspensions, civil court judgments, and private arbitration outcomes fall outside the scope of state disciplinary proceedings covered here. LARA discipline does not automatically trigger federal debarment, and a civil judgment does not by itself constitute a disciplinary action.

How it works

Disciplinary proceedings in Michigan follow a structured administrative process:

1. Complaint intake — A complaint is filed with LARA's BPL by a consumer, another licensee, a local building official, or generated internally through audit or inspection. Complaints may also originate from the Michigan Attorney General's office.
2. Investigation — BPL assigns a licensing investigator who reviews contracts, permit records, inspection reports, and consumer documentation. The Michigan Bureau of Construction Codes may provide technical input on code violations.
3. Determination of probable cause — If sufficient evidence exists, the case is referred to the relevant board or the Director of LARA for formal action.
4. Notice and opportunity to respond — The licensee receives formal written notice of the alleged violations and may submit a written response or request a hearing before an Administrative Law Judge (ALJ) under the Michigan Administrative Procedures Act (MCL 24.201).
5. ALJ hearing and recommended order — The ALJ issues a recommended decision. For residential builders, the Michigan Residential Builders and Maintenance and Alteration Contractors Board reviews the recommendation.
6. Final order — LARA issues a final order, which may impose sanctions ranging from a reprimand to full license revocation.
7. Appeal — Licensees may appeal final orders to the Michigan Court of Appeals within 60 days of the final order under MCL 24.303.

Civil fines assessed through this process can reach up to $10,000 per violation under MCL 339.601, with each day of continued unlicensed activity potentially counting as a separate violation.

Common scenarios

Disciplinary actions in Michigan cluster around identifiable violation categories:

• Unlicensed activity — Performing residential construction or contracting work without an active license, or aiding an unlicensed individual in doing so. This is among the most frequently cited violations and often results in immediate cease-and-desist orders. See the Michigan licensed vs. unlicensed contractors page for the legal boundary between these categories.
• Fraud and misrepresentation — Submitting false information on license applications, falsifying permit documentation, or misrepresenting qualifications to consumers.
• Financial misconduct — Abandoning projects after collecting payment, converting client funds to personal use, or failing to pay subcontractors and suppliers in violation of the Michigan contractor lien law.
• Insurance and bonding failures — Operating without the required insurance coverage or allowing required bonds to lapse. Contractors subject to Michigan contractor insurance and bonding requirements who fail to maintain coverage face license suspension.
• Code violations — Repeated or willful violations of the Michigan Residential Code or applicable building codes, particularly when documented through failed inspections. Contractors navigating complex code structures can reference Michigan building codes for contractors.
• Permit violations — Performing regulated work without permits or falsifying permit applications, a violation addressed separately in Michigan contractor permit requirements.

Decision boundaries

LARA and the relevant licensing boards apply a graduated enforcement model. The distinctions below reflect how severity is calibrated:

Reprimand vs. probation: A reprimand is a formal written censure with no operational restriction — it becomes part of the public license record. Probation imposes conditions on continued licensure, such as mandatory reporting, supervision requirements, or completion of continuing education under Michigan contractor continuing education standards.

Suspension vs. revocation: Suspension is temporary and typically tied to a defined period or corrective action. Revocation is permanent termination of licensure and requires a formal re-application process with board approval before any work can resume. Revocation is reserved for the most serious violations: repeat offenses, fraud, criminal conduct, or substantial consumer harm.

License non-renewal vs. disciplinary revocation: Non-renewal through failure to meet Michigan contractor license renewal deadlines is an administrative lapse, not a disciplinary finding. It does not carry the same public record weight as a revoked license resulting from a disciplinary order.

Contractors with active disciplinary history face heightened scrutiny during the Michigan contractor background check requirements process. A prior revocation does not automatically disqualify re-licensure, but the board evaluates rehabilitation, time elapsed, and the nature of the original violation. The full landscape of contractor regulation in Michigan, including how enforcement fits into broader professional standards, is accessible through the Michigan contractor services reference index.

References

• Michigan Department of Licensing and Regulatory Affairs (LARA) – Bureau of Professional Licensing
• Michigan Occupational Code – MCL 339 (Act 299 of 1980)
• Michigan Electrical Administrative Act – MCL 338.881 (Act 217 of 1956)
• Michigan Plumbing Act – MCL 338.3511 (Act 266 of 2016)
• Michigan Skilled Trades Regulation Act – MCL 339.5701 (Act 407 of 2016)
• Michigan Administrative Procedures Act – MCL 24.201 (Act 306 of 1969)
• LARA – Bureau of Construction Codes
• Michigan Residential Builders and Maintenance and Alteration Contractors Board