Michigan Builders License Exam Study Guide
1. 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.
2. What is the penalty for engaging in the practice of residential builders
license, resulting in a death?: Not less than $5,000 and not more than
$25,000 and/or four years in prison
3. On your individual builder's license application, what should you write as
your "business address"?: Your personal address
4. What is the cost for the individual builder's license?: $195
5. After receiving your residential builder's license, what are the only trades
not covered by your license?: Plumbing, electrical, and HVAC 6. Who is the
TESTING company for the State of Michigan?: PSI
7. What is the name of the department that regulates your license?: LARA
8. What are the 2 parts of the Residential Builder Examination?: Business and
Law examination/Practice and Trade examination
9. What is a good quick asset ratio?: 1 to 1
10. 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
11. 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
12. Where does most fraud occur?: In the residential market
13. 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
14. 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
15. 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
16. Who, upon completion of a hearing, shall assess a penalty or penalties?:
The Board
, Michigan Builders License Exam Study Guide
17. 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
18 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
19. How many days after the administrative law hearings examiner hears
the report, must a determination of penalties be made by the board?: 60
days 20. What is a compliance conference?: A meeting where ONLY the
respondent meets with the department to discuss the complaint against them
21. 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
22. An employee other than the listed salesperson may make a sale when::
It is occasional and incidental to the person's principal employment
23. 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
24. 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
25. After receiving your initial residential builder's license, how many hours
of continuing competency are required within the next 3 years?: 21 hours 26.
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
27. Regarding workmanship, how long does a client have to file a "verified
complaint"?: 18 months from the completion of work
28. 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?:
, Michigan Builders License Exam Study Guide
10 days 29. 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
30 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
31. 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
32. 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
33. According to Administrative rules, a licensee shall include the following
in all advertising:: - The name on the license
- The license number
- The actual business address as shown on the license
34. According to purchase and sale agreements, the builder or contractor
shall make certain that the written agreements clearly state the terms of the
transaction, including:: - Specifications and cost
- The type and quality of materials
- The type and amount of work to be done
35. The department, after investigation, may request a licensee to appear at
such _________ as is necessary to determine whether there is cause for
complaint which would require a hearing on, or dismissal of, the complaint.:
Investigative conference
36. A respondent in a complaint may be represented by:: An attorney or
his/her own self
37. What act was created to collect fees for the regulation of certain
occupations and professions, and for certain agencies and businesses; to
create certain funds; and to prescribe certain powers and duties of certain
state agencies and departments?: State License Fee Act
, Michigan Builders License Exam Study Guide
38. What is the "Occupational License For Former Offenders Act"?: An act to
encourage and contribute to the rehabilitation of former offenders and to assist them
in the assumption of the responsibilities of citizenship
39. According to the "Building Contract Fund", evidence of "intent to
defraud" is defined as:: When a contractor, or any subcontractor, appropriates
moneys to his/her self for building operations BEFORE the payment by him of all
moneys due or so to become due laborers, subcontractors, materialmen or others
entitled to payment
40 According to the Construction Lien Act, what must be supplied by owner,
General Contractor, Sub-Contractor, or Supplier within 10 days of being
asked for a copy by anyone entitled to a copy?: Notice of commencement
41. The "Claim of Lien" must be filed within how many days of LAST
furnishing labor or materials for a project?: 90 days
42. Proceedings to foreclose must take place within ____ of the date that the
claim lien was recorded.: 1 year
43. According to the Construction Lien Act, what recommendations are
given for your protection?: - Never use your assets to complete someone's
project - Get sufficient down payments and/or obtain sufficient progress payments
as the job progresses
- Have well defined contracts which include rights and responsibilities of binding
parties
44. Which document lists each subcontractor, supplier and laborer, for whom
payment of wages or fringe benefits and withholdings is due but unpaid,
with whom the (contractor)(subcontractor) has
(contracted)(subcontracted) for performance under the contract with the
owner or lessee, and the amounts due to the persons as of the date of the
statement?: The sworn statement
45. A claim of lien MUST be completed within how many days of last being on
the job site?: 90 days
46. If after filing a claim of lien, you DO get paid before the lawsuit, what form
must you complete?: Discharge of construction lien
47. What is the maximum amount you can collect through a judgment in the
small claims division of the district court using the small claims form
DC84?: $6,000
48. After Mr. Jones receives a sworn statement that he owes ABC framing
$40,000, how does Mr. Jones know that ABC framing was ever on the jobsite?-
1. 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.
2. What is the penalty for engaging in the practice of residential builders
license, resulting in a death?: Not less than $5,000 and not more than
$25,000 and/or four years in prison
3. On your individual builder's license application, what should you write as
your "business address"?: Your personal address
4. What is the cost for the individual builder's license?: $195
5. After receiving your residential builder's license, what are the only trades
not covered by your license?: Plumbing, electrical, and HVAC 6. Who is the
TESTING company for the State of Michigan?: PSI
7. What is the name of the department that regulates your license?: LARA
8. What are the 2 parts of the Residential Builder Examination?: Business and
Law examination/Practice and Trade examination
9. What is a good quick asset ratio?: 1 to 1
10. 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
11. 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
12. Where does most fraud occur?: In the residential market
13. 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
14. 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
15. 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
16. Who, upon completion of a hearing, shall assess a penalty or penalties?:
The Board
, Michigan Builders License Exam Study Guide
17. 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
18 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
19. How many days after the administrative law hearings examiner hears
the report, must a determination of penalties be made by the board?: 60
days 20. What is a compliance conference?: A meeting where ONLY the
respondent meets with the department to discuss the complaint against them
21. 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
22. An employee other than the listed salesperson may make a sale when::
It is occasional and incidental to the person's principal employment
23. 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
24. 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
25. After receiving your initial residential builder's license, how many hours
of continuing competency are required within the next 3 years?: 21 hours 26.
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
27. Regarding workmanship, how long does a client have to file a "verified
complaint"?: 18 months from the completion of work
28. 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?:
, Michigan Builders License Exam Study Guide
10 days 29. 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
30 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
31. 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
32. 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
33. According to Administrative rules, a licensee shall include the following
in all advertising:: - The name on the license
- The license number
- The actual business address as shown on the license
34. According to purchase and sale agreements, the builder or contractor
shall make certain that the written agreements clearly state the terms of the
transaction, including:: - Specifications and cost
- The type and quality of materials
- The type and amount of work to be done
35. The department, after investigation, may request a licensee to appear at
such _________ as is necessary to determine whether there is cause for
complaint which would require a hearing on, or dismissal of, the complaint.:
Investigative conference
36. A respondent in a complaint may be represented by:: An attorney or
his/her own self
37. What act was created to collect fees for the regulation of certain
occupations and professions, and for certain agencies and businesses; to
create certain funds; and to prescribe certain powers and duties of certain
state agencies and departments?: State License Fee Act
, Michigan Builders License Exam Study Guide
38. What is the "Occupational License For Former Offenders Act"?: An act to
encourage and contribute to the rehabilitation of former offenders and to assist them
in the assumption of the responsibilities of citizenship
39. According to the "Building Contract Fund", evidence of "intent to
defraud" is defined as:: When a contractor, or any subcontractor, appropriates
moneys to his/her self for building operations BEFORE the payment by him of all
moneys due or so to become due laborers, subcontractors, materialmen or others
entitled to payment
40 According to the Construction Lien Act, what must be supplied by owner,
General Contractor, Sub-Contractor, or Supplier within 10 days of being
asked for a copy by anyone entitled to a copy?: Notice of commencement
41. The "Claim of Lien" must be filed within how many days of LAST
furnishing labor or materials for a project?: 90 days
42. Proceedings to foreclose must take place within ____ of the date that the
claim lien was recorded.: 1 year
43. According to the Construction Lien Act, what recommendations are
given for your protection?: - Never use your assets to complete someone's
project - Get sufficient down payments and/or obtain sufficient progress payments
as the job progresses
- Have well defined contracts which include rights and responsibilities of binding
parties
44. Which document lists each subcontractor, supplier and laborer, for whom
payment of wages or fringe benefits and withholdings is due but unpaid,
with whom the (contractor)(subcontractor) has
(contracted)(subcontracted) for performance under the contract with the
owner or lessee, and the amounts due to the persons as of the date of the
statement?: The sworn statement
45. A claim of lien MUST be completed within how many days of last being on
the job site?: 90 days
46. If after filing a claim of lien, you DO get paid before the lawsuit, what form
must you complete?: Discharge of construction lien
47. What is the maximum amount you can collect through a judgment in the
small claims division of the district court using the small claims form
DC84?: $6,000
48. After Mr. Jones receives a sworn statement that he owes ABC framing
$40,000, how does Mr. Jones know that ABC framing was ever on the jobsite?-
