Free Template

Michigan Homeowner-Contractor Agreement

A plain-language contract template built around Michigan law — LARA license verification, Construction Lien Act protections, and cancellation rights.

Michigan MCL 339.2401 v1.0 — March 2026

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Instructions — not part of the agreement

How to Use This Template

This template was built by jaspector.com to help Michigan homeowners protect themselves when hiring a contractor. It covers the key provisions relevant to Michigan law, including licensing requirements, the Construction Lien Act, and the Home Solicitation Sales Act cooling-off period.

Before You Start

Verify the contractor's license. Use the Michigan LARA license lookup at michigan.gov/statelicensesearch to confirm the license is active, the type (Residential Builder or Maintenance & Alteration Contractor) matches your project, and the entity name matches the business you are hiring.
Download and print this document. Fill in all blank fields — do not leave any section empty. Michigan law requires a written contract for the contractor to have construction lien rights (MCL 570.1114).
Review the Legal Notes below. These notes highlight state-specific legal protections. Read them carefully — they explain your rights as a homeowner.
Both parties sign. You and the contractor each get a signed copy before any work starts.
Consult an attorney. This template is a starting point. For large projects or complex scopes, have a Michigan-licensed attorney review the agreement.

Field-by-Field Guide

›Section 1 (Parties): Fill in the legal names exactly as they appear on official documents. The contractor's LARA license number and license type are critical — confirm the entity name on the license matches the contract.
›Section 2 (Scope): Be as specific as possible. "Kitchen remodel" is not enough — list materials, dimensions, finishes, and what is excluded.
›Section 3 (Payment): Michigan has no statutory deposit cap, but negotiate a reasonable down payment. Tie every payment to a completed milestone, not a calendar date.
›Section 4 (Timeline): Get start and completion dates in writing. Fill in the delay penalties — these protect you if the contractor falls behind.
›Section 7 (Warranties): Fill in the warranty period. One year is common; negotiate for more on major work.
›Section 14 (Exhibits): Attach all plans, specs, and the contractor's LARA license printout. Check each box for what you are including.

Michigan Legal Notes

›Section 1 — License Verification: Verify the contractor's license at michigan.gov/statelicensesearch before signing. Confirm the license is active, the license type (Residential Builder or Maintenance & Alteration Contractor) covers your project scope, and the listed entity name matches the business you are hiring. Michigan requires a license for residential work of $600 or more (MCL 339.2401).
›Section 2 — Permits: The contractor, not the homeowner, should pull permits for licensed work. Michigan building codes are enforced by local code enforcement agencies. If a contractor asks the homeowner to pull the permit, that may be an attempt to work outside their license type or avoid LARA oversight.
›Section 3 — Trust Fund Obligation (MCL 570.1118): Michigan does not impose a statutory cap on down payments for residential construction contracts. However, money paid to a contractor constitutes a trust fund for the benefit of subcontractors, suppliers, and laborers. Best practice: negotiate a reasonable down payment and tie all payments to completed work milestones.
›Section 5 — Written Change Orders (MCL 570.1114): To preserve the contractor's construction lien rights, the original contract and any amendments or additions must be in writing. This also protects you as a homeowner — insist that all changes be documented in a signed written change order.
›Section 8 — Workers' Compensation (MCL 418.101 et seq.): Under the Michigan Workers' Disability Compensation Act, employers with three or more employees at any time, or one or more employees working 35+ hours per week for 13+ consecutive weeks, must carry workers' compensation insurance. Ask the contractor to confirm their coverage status before signing.
›Section 9 — Three-Day Right to Cancel (MCL 445.111–445.117): If this contract was solicited at or signed at the Homeowner's residence (a "home solicitation sale"), the Homeowner has the right to cancel until midnight of the third business day after signing, without penalty. The Contractor must provide written notice of this cancellation right at signing. The Contractor may not collect payment until the cancellation period has expired. If the Contractor fails to provide the required cancellation notice, the Homeowner's right to cancel is extended. Emergency exception: the cancellation right may be waived only if the Homeowner requests immediate work due to an emergency and provides a separate, signed, handwritten statement describing the emergency and acknowledging the waiver.
›Section 10 — LARA Complaints: Homeowners may file a complaint with LARA, Bureau of Construction Codes (BCC). LARA investigates complaints involving unlicensed work, work without permits, negligence resulting in physical harm, and fraud. Note: LARA does not have authority over contractual, monetary, or warranty disputes. File at michigan.gov/lara or call 517-241-9316. For suspected fraud, email LARA-Safety@michigan.gov.
›Section 11 — Construction Lien Act (MCL 570.1101 et seq.): Michigan allows contractors, subcontractors, and material suppliers to place a construction lien on your property if they are not paid for work or materials. This lien can affect your ability to sell or refinance. Request lien waivers with each progress payment. Michigan law prohibits requiring a lien waiver in advance of work being performed (MCL 570.1115). A lien claimant must record the claim of lien within 90 days after the last furnishing of labor or materials (MCL 570.1111), and must file suit to enforce the lien within one year after the last date of furnishing (MCL 570.1117).
›Section 12 — Written Contract Requirement (MCL 570.1114): Michigan law requires a written contract between the homeowner and contractor for residential construction work in order for the contractor to have lien rights. The written contract must contain statements about residential builder licensing requirements, electrician licensing, plumbing contractor licensing, and mechanical contractor licensing — all in type no smaller than the body of the contract. See Section 12 for the full required statements.
›Section 12 — Trust Fund (MCL 570.1118): Money paid by a homeowner to a contractor for an improvement to real property constitutes a trust fund in the hands of the contractor for the benefit of subcontractors, suppliers, and laborers. Misappropriation of these funds is a criminal offense.

About Jaspector

Jaspector is an AI-powered property advisory service that helps homeowners navigate construction projects, verify contractors, and resolve disputes. If a dispute arises during your project, we can help you document the issue and build a resolution strategy.

Learn more at jaspector.com — or email hi@jaspector.com to get started.

The instructions above are provided by jaspector.com as an educational resource. They are not part of the agreement, do not constitute legal advice, and do not create an attorney-client or endorsement relationship.

Before You Begin: This template helps you understand what a strong Michigan contractor agreement looks like. It is an educational starting point provided by jaspector.com — not a finished contract, and not legal advice. Michigan law imposes specific requirements on residential construction contracts, and local jurisdictions may add further obligations. Have this document reviewed by a Michigan-licensed attorney before use. Use of this template does not create an attorney-client relationship, and jaspector.com assumes no liability for any outcomes arising from its use.

Parties

Homeowner (Property Owner)

Name(s)
Property Address
Mailing Address
Phone
Email

Contractor

Business Name (Legal Entity)
LARA License Number
License Type (RB or M&A)
M&A Classification(s) (if applicable)
Qualifying Individual Name
Business Address
Phone
Email
Workers' Compensation Policy #
General Liability Policy #

Michigan Requirement: Verify the contractor's license at Michigan LARA License Lookup before signing. Confirm the license is active, the license type (Residential Builder or Maintenance & Alteration Contractor) covers your project scope, and the listed entity name matches the business you are hiring. Michigan requires a license for residential work of $600 or more (MCL 339.2401).

SCOPE OF WORK

2.1 Project Description

Describe the work in specific, measurable detail. Include materials, methods, dimensions, and reference any plans, drawings, or specifications attached as exhibits.

2.2 Work NOT Included

Explicitly list work that is excluded from this contract to prevent scope disputes.

2.3 Permits and Inspections

Contractor is responsible for obtaining all required building permits

Contractor is responsible for scheduling all required inspections

Permit costs are: [ ] Included in contract price / [ ] Billed separately at cost

Michigan Note: The contractor, not the homeowner, should pull permits for licensed work. Michigan building codes are enforced by local code enforcement agencies. If a contractor asks the homeowner to pull the permit, that may be an attempt to work outside their license type or avoid LARA oversight.

2.4 Plans and Specifications

Attached as Exhibit A (architectural/engineering plans)

Attached as Exhibit B (material specifications)

No formal plans — scope defined by Section 2.1 above

CONTRACT PRICE AND PAYMENT SCHEDULE

3.1 Total Contract Price

Item Total Contract Price$ Sales Tax (if applicable)$ Permit Fees (if billed separately)$ Total Amount Due**$ **

3.2 Payment Schedule

Michigan Law: Michigan does not impose a statutory cap on down payments for residential construction contracts. However, Michigan treats contractor payments as trust funds for the benefit of subcontractors, suppliers, and laborers (MCL 570.1118). Best practice: negotiate a reasonable down payment tied to initial material costs, and tie all subsequent payments to completed work milestones.

Payment Down Payment$ Progress Payment 1$ Progress Payment 2$ Progress Payment 3$ Final Payment$ Total**$ **

3.3 Payment Terms

›Payments are due within ___ days of written invoice

›Acceptable payment methods: ________________________________

›No payment shall be due for work not yet performed or materials not yet delivered to the job site

›Final payment is due only after: (a) all work is complete, (b) final inspection is passed (if applicable), and (c) Homeowner has had reasonable opportunity to inspect

PROJECT TIMELINE

Milestone Estimated Start Date Estimated Completion Date

4.1 Delays

›Contractor shall notify Homeowner in writing within 48 hours of any event that may delay the project

›Excusable delays include: weather, permit delays, material shortages, acts of God, government orders

›Non-excusable delays exceeding ___ business days entitle Homeowner to a daily credit of $ _________ (liquidated damages), not to exceed _____% of the total contract price

›If the project is not substantially complete within ___ days of the estimated completion date (excluding excusable delays), Homeowner may terminate this contract under Section 9

CHANGE ORDERS

Any changes to the scope, price, or timeline of this contract must be documented in a written Change Order signed by both parties before the changed work begins.

Each Change Order shall include:

Description of the changed work

Addition to or deduction from the contract price

Impact on the project timeline

Signature of both Homeowner and Contractor

Michigan Requirement (MCL 570.1114): To preserve the contractor's construction lien rights, the original contract and any amendments or additions must be in writing. This also protects you as a homeowner — insist that all changes be documented in a signed written change order.

No verbal agreements will modify this contract.

MATERIALS AND WORKMANSHIP

6.1 Materials

›All materials shall be new unless otherwise specified in writing

›Specific materials, brands, and grades are listed in: [ ] Section 2.1 / [ ] Exhibit B

›Substitutions require prior written approval from Homeowner

›Contractor warrants that all materials comply with applicable building codes

6.2 Workmanship Standards

›All work shall be performed in a professional, workmanlike manner

›All work shall comply with applicable Michigan building codes and local ordinances

›All work shall conform to the plans, specifications, and scope described in this contract

›Contractor shall maintain a clean and safe job site

6.3 Subcontractors

›Contractor [ ] will / [ ] will not use subcontractors

›If subcontractors are used, Contractor remains fully responsible for their work, licensing, and insurance

›All subcontractors performing work that requires a LARA license must hold a valid, active license

›Homeowner may request LARA license numbers for any subcontractor working on the project

WARRANTIES

7.1 Contractor Warranty

Contractor warrants all labor and workmanship for a period of ___ year(s) from the date of completion. During this period, Contractor shall repair or correct, at Contractor's expense, any defects in workmanship or materials furnished by Contractor.

7.2 Manufacturer Warranties

Contractor shall provide Homeowner with all manufacturer warranties for materials and equipment installed. Contractor shall ensure installations comply with manufacturer specifications to preserve warranty coverage.

7.3 Warranty Exclusions

This warranty does not cover:

›Normal wear and tear

›Damage caused by Homeowner negligence or misuse

›Damage caused by third parties or acts of God

›Items specifically excluded in writing

INSURANCE AND BONDING

8.1 Contractor Insurance Requirements

Contractor shall maintain, at minimum, the following coverage for the duration of the project:

Coverage General Liability$ Workers' Compensation Automobile Liability (if applicable)$

›Contractor shall provide certificates of insurance upon request

›Homeowner shall be named as additional insured on the general liability policy

8.2 Michigan Workers' Compensation

Michigan Requirement: Under the Michigan Workers' Disability Compensation Act (MCL 418.101 et seq.), employers with three or more employees at any time, or one or more employees working 35 or more hours per week for 13 or more consecutive weeks, must carry workers' compensation insurance. Ask the contractor to confirm their coverage status before signing.

TERMINATION

9.1 Homeowner's Right to Terminate

Homeowner may terminate this contract at any time by providing written notice to Contractor. Upon termination:

›Homeowner shall pay for all work satisfactorily completed and materials delivered to the job site as of the termination date

›Contractor shall provide an itemized accounting of all work completed and materials delivered within 10 business days of termination

›Contractor shall not charge a cancellation penalty exceeding the actual costs reasonably incurred

9.2 Contractor's Right to Terminate

Contractor may terminate this contract if:

›Homeowner fails to make a payment due under this contract within ___ days of written notice of default

›Conditions at the job site make the work unsafe or illegal to continue

9.3 Three-Day Right to Cancel (Home Solicitation Sales)

Michigan Law (Home Solicitation Sales Act, MCL 445.111-445.117): If this contract was solicited at or signed at the Homeowner's residence (a "home solicitation sale"), the Homeowner has the right to cancel this contract until midnight of the third business day after the day on which the Homeowner signs the agreement, without penalty. The Contractor must provide a written notice of this cancellation right at the time of signing. The Contractor may not collect any payment or acquire any negotiable instrument from the Homeowner until the three-business-day cancellation period has expired. If the Contractor fails to provide the required cancellation notice, the Homeowner's right to cancel is extended. Emergency exception: the cancellation right may be waived if the Homeowner requests immediate work due to an emergency and provides a separate, signed, handwritten statement describing the emergency and acknowledging the waiver.

10.

DISPUTE RESOLUTION

10.1 Informal Resolution

The parties agree to attempt informal resolution of any dispute by written notice describing the issue. The other party shall respond in writing within 15 business days.

10.2 Mediation

If informal resolution fails, the parties agree to submit the dispute to non-binding mediation before a mutually agreed mediator. Mediation costs shall be shared equally.

10.3 LARA Complaint

Michigan Resource: Homeowners may file a complaint with the Michigan Department of Licensing and Regulatory Affairs (LARA), Bureau of Construction Codes (BCC). LARA investigates complaints involving unlicensed work, work without permits, negligence resulting in physical harm, and fraud. Note: LARA does not have authority over contractual, monetary, or warranty disputes. File a complaint at michigan.gov/lara or call 517-241-9316. For suspected fraud, email LARA-Safety@michigan.gov.

10.4 Legal Action

If mediation fails, either party may pursue legal action in the county where the property is located. Michigan follows the American Rule: each party pays their own attorney's fees unless a statute or this contract provides otherwise. The prevailing party in any legal action arising from this contract shall be entitled to recover reasonable attorney's fees and costs. Michigan small claims court handles disputes up to $7,000; no attorney representation is permitted in small claims.

11.

CONSTRUCTION LIEN NOTICE

Michigan Law (Construction Lien Act, MCL 570.1101 et seq.): Michigan allows contractors, subcontractors, and material suppliers to place a construction lien on your property if they are not paid for work or materials. This lien can affect your ability to sell or refinance.

11.1 Protecting Against Construction Liens

›Request lien waivers from the contractor and all subcontractors with each progress payment

›Michigan law prohibits requiring a lien waiver in advance of work being performed (MCL 570.1115)

›At completion, require the Contractor to provide a Sworn Statement listing all subcontractors and suppliers and the amounts owed or paid to each (MCL 570.1110)

›Upon receipt of a Sworn Statement, the Homeowner must notify each subcontractor and supplier listed within the time required by law

›Consider requiring Contractor to provide a list of all subcontractors and material suppliers at the start of the project

11.2 Notice of Furnishing

Under Michigan law, subcontractors and suppliers must provide a Notice of Furnishing to the property owner or designee within 20 days of first furnishing labor or materials (MCL 570.1109). If you receive a Notice of Furnishing, it does not mean there is a problem — it preserves the sender's right to file a lien if they are not paid. Keep all Notices of Furnishing on file.

11.3 Lien Enforcement Deadline

A lien claimant must record the claim of lien within 90 days after the last furnishing of labor or materials (MCL 570.1111). A lien claimant must file suit to enforce the lien within one year after the last date of furnishing (MCL 570.1117).

12.

ADDITIONAL MICHIGAN REQUIREMENTS

12.1 Written Contract Requirement (MCL 570.1114)

Michigan law requires a written contract between the homeowner and contractor for residential construction work in order for the contractor to have lien rights. The written contract must contain the following statements in type no smaller than the body of the contract:

That a residential builder or maintenance and alteration contractor is required to be licensed under Article 24 of the Michigan Occupational Code (MCL 339.2401-339.2412)

If the contractor is required to be licensed, a statement that the contractor is licensed and the contractor's license number

That electricians are required to be licensed under the Skilled Trades Regulation Act (MCL 339.5701-339.5739)

That plumbing contractors are required to be licensed under the Skilled Trades Regulation Act (MCL 339.6101-339.6133)

That mechanical contractors are required to be licensed under the Skilled Trades Regulation Act (MCL 339.5801-339.5819)

12.2 Licensing Threshold

Michigan requires a Residential Builder or Maintenance and Alteration Contractor license for residential construction work of $600 or more in combined labor and materials. Working without a license on projects at or above this threshold is a violation of the Michigan Occupational Code.

12.3 LARA License Statement

Residential builders and residential maintenance and alteration contractors are required to be licensed by the Michigan Department of Licensing and Regulatory Affairs (LARA) under Article 24 of the Occupational Code, 1980 PA 299. Questions about a contractor may be directed to LARA, Bureau of Construction Codes, P.O. Box 30254, Lansing, MI 48909, or call 517-241-9316.

12.4 Trust Fund Obligation

Michigan Law (MCL 570.1118): Money paid by a homeowner to a contractor for an improvement to real property constitutes a trust fund in the hands of the contractor for the benefit of subcontractors, suppliers, and laborers. Misappropriation of these funds is a criminal offense.

13.

GENERAL PROVISIONS

13.1 Entire Agreement

This contract, including all exhibits and change orders, constitutes the entire agreement between the parties. No prior verbal or written representations shall be binding unless incorporated herein.

13.2 Severability

If any provision of this contract is found unenforceable, the remaining provisions shall continue in full force and effect.

13.3 Governing Law

This contract shall be governed by the laws of the State of Michigan.

13.4 Notice

All notices under this contract shall be in writing and delivered to the addresses listed in Section 1, by personal delivery, certified mail, or email with confirmed receipt.

13.5 Assignment

Neither party may assign this contract without the prior written consent of the other party.

14.

EXHIBITS AND ATTACHMENTS

Exhibit A: Plans and Drawings

Exhibit B: Material Specifications

Exhibit C: Notice of Three-Day Right to Cancel (if home solicitation sale)

Exhibit D: Contractor's LARA License Printout

Exhibit E: Certificates of Insurance

Exhibit F: Contractor's Sworn Statement (upon completion)

Additional: _________________________________

Signatures

By signing below, both parties acknowledge that they have read, understand, and agree to all terms of this contract.

Homeowner

Signature

Printed Name
Date

Homeowner (if jointly owned)

Signature

Printed Name
Date

Contractor

Signature

Printed Name
Title
LARA License #
Date

Michigan Pre-Signing Checklist

Before signing, confirm each item:

Verified contractor's LARA license is active at michigan.gov/statelicensesearch
License type (Residential Builder or M&A) covers the project scope
If M&A contractor, confirmed classifications match the specific work
Entity name on license matches the business name on this contract
Workers' compensation status confirmed (if contractor has employees)
General liability insurance confirmed
Contract includes required MCL 570.1114 licensing statements
Three-Day Right to Cancel notice provided (if signed at home)
All blank fields in this contract are filled in — no blank spaces
Received a signed copy of the complete contract before work starts
Payment schedule tied to work milestones, not calendar dates
Plans, specs, and material lists are attached or described in detail

Next step

Verify your contractor's Michigan license

Look up LARA license status, license type, and complaint history before you sign.

Michigan License Lookup

This template was prepared by jaspector.com as an educational resource for Michigan homeowners.

It is not legal advice. Consult a Michigan-licensed attorney before executing any construction contract.

Template Version 1.0 — March 2026

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