Summary
Operating as a general contractor in Ann Arbor requires compliance with both Michigan state licensing requirements and local city regulations. Contractors must obtain appropriate state licensing through LARA, which includes passing examinations, meeting financial requirements, and maintaining bonds and insurance. The City of Ann Arbor has a well-established permitting process that requires careful attention to submittal requirements and inspection scheduling. Ann Arbor's market serves a mix of historic homes, university-related properties, and upscale residential projects, creating opportunities for contractors who can navigate both renovation and new construction requirements. Success in this market requires understanding local building codes, environmental regulations, and the expectations of educated clientele while maintaining compliance with state licensing and insurance requirements throughout all project phases.
License Requirements
Michigan requires general contractors to register with the Department of Licensing and Regulatory Affairs (LARA) as a Residential Builder if working on 1-4 family homes, or as a Maintenance and Alteration Contractor for smaller projects. Residential Builders must pass a state exam, provide proof of $50,000 net worth, and maintain $20,000 surety bond. License renewal is required every 3 years. Ann Arbor does not require separate local contractor licensing beyond state requirements.
Permit Requirements
Building permits are required through the City of Ann Arbor Building Department for most construction projects. Applications can be submitted online through the city's permitting portal or in-person at 301 E. Huron Street. Permit fees range from $50 for minor alterations to several thousand dollars for new construction based on project valuation. Plan review typically takes 2-3 weeks for residential projects, 3-4 weeks for commercial. Electrical, plumbing, and mechanical permits may be required separately.
Insurance Requirements
Michigan requires general contractors to carry minimum $100,000 general liability insurance. Workers' compensation insurance is mandatory for contractors with employees. Many projects require additional coverage - the city and clients often require $1 million general liability minimum. Professional liability insurance is recommended. Residential builders must maintain a $20,000 surety bond filed with the state.
Typical Cost Ranges
In Ann Arbor's market: Kitchen renovations $25,000-$80,000, bathroom remodels $15,000-$45,000, whole house renovations $100,000-$300,000, room additions $50,000-$150,000, new single-family homes $250,000-$750,000, commercial tenant improvements $50-$200 per square foot. Costs reflect Ann Arbor's higher-end market and proximity to University of Michigan.
Compliance Checklist
- ✓Obtain Michigan Residential Builder license or Maintenance and Alteration Contractor registration through LARA
- ✓Secure required insurance coverage including general liability and workers compensation
- ✓File $20,000 surety bond with the state (if applicable for license type)
- ✓Register business with Michigan Department of Treasury for tax purposes
- ✓Obtain building permits from Ann Arbor Building Department before starting work
- ✓Schedule required inspections during construction phases
- ✓Ensure all subcontractors are properly licensed and insured
- ✓Comply with Ann Arbor's noise ordinance and construction hour restrictions
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