Permit Scope and Licensing on a Multi-Trade Residential Job
A Michigan HVAC contractor is hired to replace a furnace and AC, add a bathroom exhaust fan, and run a new gas line to a range in a single-family home. The contractor holds a mechanical contractor license but no plumbing license. The homeowner wants the work done in two weeks and asks the contractor to 'pull whatever permits you need and just get it done.' The contractor plans to have a helper (unlicensed) run the gas line and wire the new furnace disconnect. The local municipality requires separate mechanical, plumbing, and electrical permits. The contractor's insurance certificate lists the company but the helper is a 1099 subcontractor with no license.
1. Identify the licensing and permit problems and the correct course of action.
Read the worked answer
Problems:
- Gas line to range: In Michigan, fuel-gas piping is generally under the mechanical code, but local jurisdictions may require a plumbing or mechanical permit; the contractor must confirm which license covers it. If a plumbing license is required, the contractor cannot legally perform it - a licensed plumber must be subcontracted.
- Unlicensed helper running gas piping: Gas piping must be installed by a licensed individual under the contractor's license; a 1099 helper without a license cannot legally install it. The contractor is responsible for supervision and for ensuring only licensed persons perform regulated work.
- Electrical disconnect: Wiring the furnace disconnect is electrical work requiring an electrical license/permit unless the contractor holds that license or uses a licensed electrician. The helper cannot do it.
- Permits: Separate mechanical, plumbing, and electrical permits must be pulled by the appropriately licensed party. 'Pull whatever you need' does not authorize the contractor to pull permits outside their license scope.
Correct course: pull the mechanical permit for furnace/AC/bath fan; subcontract licensed plumber for the gas range line if required and licensed electrician for the disconnect; do not let the unlicensed helper perform regulated work. Verify the helper's status and insurance.
2. What are the risks of using the 1099 unlicensed helper for this scope, and how should the contractor document the job?
Read the worked answer
Risks:
- License law violation: Performing regulated work without a license can result in fines, stop-work orders, and license discipline for the contractor.
- Insurance/liability: An unlicensed 1099 worker may not be covered; if injured or if their work fails, the contractor bears liability. Workers' comp and general liability may exclude unlicensed subs.
- Code/inspection failure: Inspectors can reject work performed by unlicensed persons; the contractor must redo it at their cost.
- Warranty and homeowner risk: Gas leaks or electrical faults create life-safety exposure.
Documentation:
- Written scope and contract listing licensed parties for each trade.
- Copies of licenses and insurance certificates for all subs.
- Permit numbers and inspection records.
- A signed change order if the homeowner insists on a compressed schedule that requires additional trades.
Recommendation: decline to have the helper perform gas or electrical work; schedule licensed trades and communicate the two-week timeline realistically.
3. The homeowner pushes back on cost and timeline. How should the contractor respond professionally while staying compliant?
Read the worked answer
Respond with a clear, written explanation:
- Explain the law, not just the price: The gas and electrical portions require licensed trades and separate permits; this is a legal requirement, not an upsell.
- Offer a realistic schedule: Mechanical work can start immediately; gas and electrical depend on sub availability. Provide dates.
- Provide options: Bundle the gas range line and electrical disconnect into one sub visit to reduce cost; or phase the work (furnace/AC first, range line later).
- Put it in writing: A revised proposal with line items, permit fees, and sub costs; a change order for any added scope.
- Do not compromise: Never agree to have an unlicensed person do regulated work to meet a deadline - the liability and license risk outweigh the schedule.
This protects the homeowner (inspection, warranty, insurance) and the contractor (license, liability). Frame it as quality and safety, and let the homeowner decide on phasing.