I happen to be a Michigan attorney with some experience in
construction law and I was pleased to learn of your question, though I
am afraid that my news for you is not so good.
You indicated that you pulled the city permit which I assume means
that your companys name (or your name personally) was on the building
permit. In addition, the contract that was signed by the homeowner was
presumably accepted by you or your company.
One question for you is whether the homeowner knew of any assignment
of the contract from you to the subcontractor? If the owner did know,
was any assignment of the contract, if it occurred, was made in
writing? I am assuming from your description of the facts is that NO,
the homeowner did not know of an assignment. If this is not the case
the answer below may change. If there was any chance of an assignment
of the contract from you to the subcontractor, please let me know the
ISSUE #1: Whether you have an obligation to make the job right?
ANSWER: Yes, assuming that you did not assign the contract to the
sub, you must make the alterations and repairs so that the project
complies with the applicable building code.
The rules in Michigan that pertain to residential contractors can be
You complied with the regulations by having a contract in place prior
to the work being performed. The performance of the work was by the
subcontractor who was your agent both in fact (you deputized the
sub to do the work) and impliedly (the owner fairly assumed that the
sub worked for you).
The agents (subs) work was therefore your responsibility. The owner
relied upon your license and representations. The obligation to make
the job right would then belong to you, and if not made right, the
owner would have a clear basis to file a complaint with the Michigan
Department of Consumer and Industry Services.
ISSUE #2: Whether the payment by the owner to the sub (your agent)
constituted payment under the contract?
ANSWER: Probably, yes.
IF the contract was, in fact, with you or your company, the payment to
your agent is probably sufficient to relieve the owner from
The payment clause that you refer to, requiring payment only to you,
may give you an opening for a claim filed in the Wayne County District
Court Small Claims Division. In order to prevail, I would suggest
that you would need to show (1) the contract provision concerning the
payments only to you; (2) that the owner recognized that the
subcontractor was an entity separate from you and your company; and
(3) that the owner made the payment to the sub with the knowledge that
the sub was separate from you.
You certainly have a claim against the subcontractor, if you can find
him/her. Again, small claims court may be a useful tool to pursue the
subcontractor and receive the judgment that you seek.
IF, IN THIS CASE, THE HOMEOWNER contracted with the sub on the side
as you suggest may have happened, you may well be free from liability
to repair the faulty work. In such a case, you would merely have
arranged the work for the principals (the owner and the sub), or the
facts may show that even if you had signed the contract, you may have
assigned the contract particularly if this was done with the
owners permission or knowledge.
I hope that this explanation helps. PLEASE LET ME KNOW IF I CAN
CLARIFY ANY PART OF THIS ANSWER.
Best regards and best of luck,
Michigan Department of Consumer and Industry Services: