Michigan Builders
License Exam Study
Guide
What is the first offense penalty for engaging in the practice of residential building without a
license?
Not less than $5,000 and not more than $25,000 and/or one year in prison. Subsequent
violations can extend the prison time to up to 2 years.
What is the penalty for engaging in the practice of residential builder’s license, resulting in a
death?
Not less than $5,000 and not more than $25,000 and/or four years in prison
On your individual builder's license application, what should you write as your "business
address"?
Your personal address
What is the cost for the individual builder's license?
$195
After receiving your residential builder's license, what are the only trades not covered by your
license?
Plumbing, electrical, and HVAC
Who is the TESTING company for the State of Michigan?
PSI
What is the name of the department that regulates your license?
LARA
What are the 2 parts of the Residential Builder Examination?
,Business and Law examination/Practice and Trade examination
What is a good quick asset ratio?
1 to 1
Under the Carpentry section of the test, what does a "span table" tell us?
What species and what grade of lumber a floor joist has to be to span a certain distance
Which is NOT a reason that you need a residential business license?
It allows you to be able to file a lein on property
It allows you to pull a residential permit
It allows you to file a lawsuit if necessary
It allows you to work on commercial properties
It allows you to work on commercial properties
Where does most fraud occur?
In the residential market
As a builder, your license falls under the regulation of:
Both rules by the director and board as well as laws of the state of Michigan
What is the make up of the 9 members of the board?
4 residential builders, 2 M + A contractors, and 3 members of the general public
Under the definition of occupational code, what does the word "limitation" refer to?
A condition, stricture, restraint or probation attached to a license relative to the scope of
practice
Who, upon completion of a hearing, shall assess a penalty or penalties?
The Board
If you fail to renew your license or registration on or before the expiration date, how many
days do you have to resubmit with the proper payment and late fee?
60 days
,When the department is investigating a complaint and finds evidence of a violation, what
actions can be brought against the respondent?
A cease and desist order, a formal complaint, and/or a citation
How many days after the administrative law hearings examiner hears the report, must a
determination of penalties be made by the board?
60 days
What is a compliance conference?
A meeting where ONLY the respondent meets with the department to discuss the complaint
against them
Which of the following terms means a premise used or intended to be used for a residential
purpose and related facilities appurtenant to the premises used or intended to be used as an
adjunct of residential occupancy?
Residential structure
An employee other than the listed salesperson may make a sale when:
It is occasional and incidental to the person's principal employment
The following are reasons that someone would be allowed to operate without a residential
business license:
- They are an authorized representative of the United States government
- They are the owner of a rental property with reference to the maintenance and alteration of
that rental property
- An owner of property with reference to a structure on the property for the owner's own use
and occupancy
Beginning the license cycle after December 21, 2007, the department shall issue the license
of a residential builder and residential maintenance and alteration contractor for a period of
how many years in duration?
3 years
After receiving your initial residential builder's license, how many hours of continuing
competency are required within the next 3 years?
21 hours
, If a salesperson desires to change employment from one residential builder or maintenance
and alteration contractor to another:
The license shall be forwarded to the department, an application will be made for a transfer,
and a new license under the salesperson's new employer will be issued
Regarding workmanship, how long does a client have to file a "verified complaint"?
18 months from the completion of work
If a licensed residential builder or licensed residential maintenance and alteration contractor
wishes to change the control or direction of the business, how long do they have to report that
change to the department?
10 days
The department shall conduct a review upon notice that a licensee has violated the asbestos
abatement contractors licensing act. What are the possible consequences for for this
violation?
The department may suspend or revoke that person's license and fines may be issued
When the board issues the findings of a verified complaint:
- The department shall post on its website any final order of the board and the date it was
issued
- The posting shall occur within 30 days after the final order is issued
- The department shall annually post on its website the number of final orders to the board
According to the Administrative Rules, an application for a license shall include:
- The residence address of all individuals, partners, officers and/or members, as requested by
the department
- The address of the principal place of business in Michigan
Upon final order of license suspension or revocation, the licensee shall surrender the license
to the department within how many days of the date of suspension or revocation?
10 days
According to Administrative rules, a licensee shall include the following in all advertising:
- The name on the license
License Exam Study
Guide
What is the first offense penalty for engaging in the practice of residential building without a
license?
Not less than $5,000 and not more than $25,000 and/or one year in prison. Subsequent
violations can extend the prison time to up to 2 years.
What is the penalty for engaging in the practice of residential builder’s license, resulting in a
death?
Not less than $5,000 and not more than $25,000 and/or four years in prison
On your individual builder's license application, what should you write as your "business
address"?
Your personal address
What is the cost for the individual builder's license?
$195
After receiving your residential builder's license, what are the only trades not covered by your
license?
Plumbing, electrical, and HVAC
Who is the TESTING company for the State of Michigan?
PSI
What is the name of the department that regulates your license?
LARA
What are the 2 parts of the Residential Builder Examination?
,Business and Law examination/Practice and Trade examination
What is a good quick asset ratio?
1 to 1
Under the Carpentry section of the test, what does a "span table" tell us?
What species and what grade of lumber a floor joist has to be to span a certain distance
Which is NOT a reason that you need a residential business license?
It allows you to be able to file a lein on property
It allows you to pull a residential permit
It allows you to file a lawsuit if necessary
It allows you to work on commercial properties
It allows you to work on commercial properties
Where does most fraud occur?
In the residential market
As a builder, your license falls under the regulation of:
Both rules by the director and board as well as laws of the state of Michigan
What is the make up of the 9 members of the board?
4 residential builders, 2 M + A contractors, and 3 members of the general public
Under the definition of occupational code, what does the word "limitation" refer to?
A condition, stricture, restraint or probation attached to a license relative to the scope of
practice
Who, upon completion of a hearing, shall assess a penalty or penalties?
The Board
If you fail to renew your license or registration on or before the expiration date, how many
days do you have to resubmit with the proper payment and late fee?
60 days
,When the department is investigating a complaint and finds evidence of a violation, what
actions can be brought against the respondent?
A cease and desist order, a formal complaint, and/or a citation
How many days after the administrative law hearings examiner hears the report, must a
determination of penalties be made by the board?
60 days
What is a compliance conference?
A meeting where ONLY the respondent meets with the department to discuss the complaint
against them
Which of the following terms means a premise used or intended to be used for a residential
purpose and related facilities appurtenant to the premises used or intended to be used as an
adjunct of residential occupancy?
Residential structure
An employee other than the listed salesperson may make a sale when:
It is occasional and incidental to the person's principal employment
The following are reasons that someone would be allowed to operate without a residential
business license:
- They are an authorized representative of the United States government
- They are the owner of a rental property with reference to the maintenance and alteration of
that rental property
- An owner of property with reference to a structure on the property for the owner's own use
and occupancy
Beginning the license cycle after December 21, 2007, the department shall issue the license
of a residential builder and residential maintenance and alteration contractor for a period of
how many years in duration?
3 years
After receiving your initial residential builder's license, how many hours of continuing
competency are required within the next 3 years?
21 hours
, If a salesperson desires to change employment from one residential builder or maintenance
and alteration contractor to another:
The license shall be forwarded to the department, an application will be made for a transfer,
and a new license under the salesperson's new employer will be issued
Regarding workmanship, how long does a client have to file a "verified complaint"?
18 months from the completion of work
If a licensed residential builder or licensed residential maintenance and alteration contractor
wishes to change the control or direction of the business, how long do they have to report that
change to the department?
10 days
The department shall conduct a review upon notice that a licensee has violated the asbestos
abatement contractors licensing act. What are the possible consequences for for this
violation?
The department may suspend or revoke that person's license and fines may be issued
When the board issues the findings of a verified complaint:
- The department shall post on its website any final order of the board and the date it was
issued
- The posting shall occur within 30 days after the final order is issued
- The department shall annually post on its website the number of final orders to the board
According to the Administrative Rules, an application for a license shall include:
- The residence address of all individuals, partners, officers and/or members, as requested by
the department
- The address of the principal place of business in Michigan
Upon final order of license suspension or revocation, the licensee shall surrender the license
to the department within how many days of the date of suspension or revocation?
10 days
According to Administrative rules, a licensee shall include the following in all advertising:
- The name on the license
