A party may be owed money for services they performed, however, if they do not have the proper license for their field of practice, they may be out of luck.
Michigan’s Occupational Code (the “Code”) requires a license to engage in many professions (barber, cosmetologist, architect, real estate broker, residential building contractor). If a person engages in one of these professions without a license, the Code bars them from maintaining a lawsuit seeking compensation for their services.
While this applies to any occupation for which the Code requires a license, we see this quite frequently in our construction litigation practice. With regard to contractors, the Code clearly states:
“A person or qualifying officer for a corporation or member of a residential builder or residential maintenance and alteration contractor shall not bring or maintain an action in a court of this state for the collection of compensation for the performance of an act or contract for which a license is required by this article without alleging and proving that the person was licensed under this article during the performance of the act or contract.”
Thus, under the Code, a residential building contractor must prove he was licensed when he performed his work in order to maintain a suit seeking payment for his services.
Case In Point
An unlicensed roofing contractor installs a new roof on a homeowner’s home. When the contractor is not paid, he sues the homeowner seeking compensation for his services. Under the Code, the unlicensed contractor is absolutely barred from maintaining his suit for compensation, including being paid for the materials he provided. As a result, the Court dismissed the suit, leaving the contractor without legal recourse. While harsh, that is one of the penalties for not being properly licensed and a risk the unlicensed contractor takes. This is an actual case decided by Michigan’s own Supreme Court. See Stokes v. Millen Roofing Company, 466 Mich 660 (2002).
Time and time again, the above scenario plays out in our courts. Most common are the cases where a party has no license at all—either because it lapsed or was not obtained in the first place. However, we also see cases where the company’s owner has a license but the company does not, as also required by the Code. Such cases are typically brought to a quick end by citing the Code and applicable law to the Court.
These types of cases illustrate how critical it is for a client, whether bringing suit or defending one, to understand the legal requirements necessary to maintain a claim. Neuman Anderson knows these “tools of the trade” and can use them to guide you in your legal matters.
For further examples or to discuss what impact the Occupational Code may have on your legal matters, contact Leif Anderson via email or at (248) 594-5252.