Bill Text: MI SB1176 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Occupations; construction; statute of limitations for complaints against residential builders and contractors; modify, and require warranty for work. Amends sec. 2411 of 1980 PA 299 (MCL 339.2411).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-06-07 - Referred To Committee On Regulatory Reform [SB1176 Detail]

Download: Michigan-2011-SB1176-Introduced.html

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SENATE BILL No. 1176

 

 

June 7, 2012, Introduced by Senator JONES and referred to the Committee on Regulatory Reform.

 

 

 

     A bill to amend 1980 PA 299, entitled

 

"Occupational code,"

 

by amending section 2411 (MCL 339.2411), as amended by 2010 PA 151.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2411. (1) A person may not file a complaint filed under

 

this section or article 5, or both, shall be made within 18 months

 

after the latest of the following regarding concerning a

 

residential structure or a combination of residential and

 

commercial structure as follows: more than 10 years after 1 of the

 

following occurs, whichever is latest:

 

     (a) In the case of If the complaint concerns a maintenance and

 

alteration contract:

 

     (i) Completion.

 

     (ii) Occupancy.

 

     (iii) Purchase.

 

     (b) In the case of a project requiring If the complaint

 

concerns a project that requires an occupancy permit:

 

     (i) Issuance of the certificate of occupancy or temporary

 

certificate of occupancy.

 

     (ii) Closing.

 

     (2) A If a person that is a licensee or applicant who commits

 

1 or more does any of the following, that person is subject to the

 

penalties set forth described in article 6:

 

     (a) Abandonment without Without legal excuse, of abandons a

 

contract, construction project, or operation engaged in or

 

undertaken by the licensee.

 

     (b) Diversion of funds Diverts money or property received for

 

prosecution or completion of proceeding with or completing a

 

specific construction project or operation, or for a specified

 

purpose in the prosecution or completion of proceeding with or

 

completing a construction project or operation, and the funds or

 

property application or use applies or uses the money or property

 

for any other construction project or operation, obligation, or

 

purposes.

 

     (c) Failure Fails to account for or remit money coming that

 

comes into the person's possession that and belongs to

 

others.another person.

 

     (d) A willful departure Willfully departs from or disregard of

 

disregards 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 Willfully violates the building

 

laws of this state or of a political subdivision of this state.

 

     (f) In a residential maintenance and alteration contract,

 

failure fails to furnish to a lender the purchaser's signed

 

completion certificate executed upon completion of when the work to

 

be performed under the contract is completed.

 

     (g) If the person is a licensed residential builder or

 

licensed residential maintenance and alteration contractor, failure

 

fails to notify the department within 10 days of a change in the

 

control or direction of the business of the licensee resulting that

 

results 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 Fails to deliver to the purchaser the entire

 

agreement of the parties, including any finance or other charge

 

arising out of or incidental to the agreement, 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,

 

building of a garage, laying of concrete on residential property,

 

or manufacture, assembly, construction, sale, or distribution of a

 

residential or combination residential and commercial structure

 

that is prefabricated, preassembled, precut, packaged, or shell

 

housing.

 

     (i) If the person is a salesperson, failure fails to pay over

 

immediately upon receipt money received by the salesperson, the

 

person receives in connection with a transaction governed by this

 

article to the residential builder or residential maintenance and

 

alteration contractor under whom which the salesperson is licensed.

 

     (j) Aiding or abetting Aids or abets an unlicensed person to

 

evade this article; , or knowingly combining or conspiring with, or

 

acting as agent, partner, or associate for, an unlicensed person,

 

allowing one's license to be used by allows an unlicensed person ,

 

or acting to use one's license; or acts as or being becomes an

 

ostensible licensed residential builder or licensed residential

 

maintenance and alteration contractor for an undisclosed person who

 

does or shall control or direct, that controls or directs, or who

 

may have that has the right to control or direct, directly or

 

indirectly, the operations of a the licensee.

 

     (k) Acceptance of If the person is a salesperson, accepts a

 

commission, bonus, or other valuable consideration by a salesperson

 

for the sale of goods or the performance of service specified in

 

the this article from a person other than the residential builder

 

or residential maintenance and alteration contractor under whom

 

which the person is licensed.

 

     (l) Becoming Becomes insolvent, filing files a bankruptcy

 

action, becoming becomes subject to a receivership, assigning

 

assigns for the benefit of creditors, failing fails to satisfy

 

judgments or liens, or failing fails to pay an obligation as it

 

becomes due in the ordinary course of business.

 

     (m) Workmanship not meeting Performs workmanship that does not

 

meet the standards of the Michigan residential code as promulgated

 

by the director under the Stille-DeRossett-Hale single state

 

construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.

 

     (n) If the person is a licensed residential builder or

 

licensed residential maintenance and alteration contractor, fails

 

to provide a homeowner a written warranty that meets all of the

 

following:

 

     (i) For a period of at least 10 years, warrants that the

 

workmanship of the builder or contractor meets the standards of the

 

Michigan residential code promulgated by the director under the

 

Stille-DeRossett-Hale single state construction code act, 1972 PA

 

230, MCL 125.1501 to 125.1531, and that the work performed by the

 

builder or contractor is free from substantial defects in materials

 

or workmanship.

 

     (ii) Provides for reimbursement to the homeowner of up to

 

$50,000.00 for a breach or violation of the warranty.

 

     (iii) Is assignable by the homeowner to subsequent purchasers of

 

the property.

 

     (iv) Includes a notice to the homeowner that the builder or

 

contractor is licensed by the department under the occupational

 

code, 1980 PA 299, MCL 339.101 to 339.2919, and that the homeowner

 

has rights under the occupational code to file a complaint against

 

the builder or contractor for a violation of that statute.

 

     (o) If the person is a licensed residential builder or

 

licensed residential maintenance and alteration contractor that has

 

agreed to a contract or plans, prints, or drawings with a homeowner

 

for an undertaking or project, deviating from the contract, plans,

 

prints, or drawings without written authorization signed by the

 

homeowner.

 

     (3) The department shall conduct a review upon if it receives

 

notice that the a 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) Notwithstanding article 5, the following apply to

 

administrative proceedings regarding workmanship under subsection

 

(2)(m):

 

     (a) A complaint submitted by an owner shall must 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 at the same time the

 

homeowner submits 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 If the department receives 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 and the 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. If the

 

department does not send a copy of the verified complaint within 30

 

days after receipt of it receives the building inspection report,

 

the department shall not assess a fine against the licensee under

 

article 6, but the department may pursue restitution, license

 

suspension, or other remedies provided under this act.

 

     (d) A licensee may contractually provide for an alternative

 

dispute resolution procedure process to resolve complaints filed

 

with the department. The procedure shall be conducted by a All of

 

the following apply to a dispute resolution process described in

 

this subdivision:

 

     (i) A neutral third party for determining shall conduct the

 

process and determine the rights and responsibilities of the

 

parties. and shall be initiated by the

 

     (ii) The licensee , who shall initiate the process and provide

 

notice of the initiation of the procedure process to the

 

complainant by certified mail not less than at least 30 days before

 

the commencement of that procedure. the process. The procedure

 

shall be conducted neutral third party shall conduct the process at

 

a location mutually agreed to by the parties.

 

     (e) The department shall not initiate a proceeding against a

 

licensee under this subsection if the licensee has contractually

 

provided for an alternative dispute resolution procedure that under

 

subdivision (d) and that procedure has not been utilized and

 

completed unless it is determined the department determines that

 

the licensee has not complied with a decision or order issued as a

 

result of that alternative dispute resolution procedure, that the

 

alternative dispute resolution procedure was not fully completed

 

within 90 days after the filing of the complaint with the

 

department, or an the alternative dispute resolution procedure

 

meeting the requirements of provided by the licensee under

 

subdivision (d) is not available to the complainant.

 

     (f) The complainant shall demonstrate that establishes that

 

the complainant provided notice has been provided to the licensee

 

describing reasonable times and dates that the residential

 

structure was accessible for any needed repairs and provides proof

 

acceptable to the department that the repairs were not made

 

licensee did not make the repairs within 60 days after the sending

 

of complainant sent the notice. This subdivision does not apply if

 

the department determines a necessity it is necessary to safeguard

 

the structure or to protect the occupant's health and safety and,

 

in such case, if it makes that determination, the department may

 

utilize any remedy available under section 504(3).

 

     (g) 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 and the guidelines are

 

consistent with the Stille-DeRossett-Hale single state construction

 

code act, 1972 PA 230, MCL 125.1501 to 125.1531, the department

 

shall consider those guidelines in evaluating the complaint.

 

     (5) If the a 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 on proofs

 

submitted to and findings made by the hearing examiner after a

 

contested case.

 

     (6) As used in this section, "verified complaint" means a

 

complaint in which all or a portion of the allegations have been

 

are confirmed by an affidavit of the state or local building

 

official.