MICHIGAN RESIDENTIAL BUILDER’S LICENSE EXAM QUESTIONS AND
ANSWERS | VERIFIED & UPDATED 2025
What is the 1st offense penalty for engaging in the practice of residential building without a
license? - Not less than $5K and not more than $25K and/or 1 year
What is the penalty for engaging in the practice of residential building, resulting in a death? -
Not less than $5K and not more than $50K and/or 4 years
On your individual builder's license application, what should you write as your "business
address"? - Your personal address
What is the cost of the individual builder's license? - $195
After receiving your residential builder's license, what are the only trades that are not covered
by your license? - -Plumbing
-Electrical
-HVAC
Who is the TESTING company for the State of Michigan? - PSI
What is the name of the DEPARTMENT that regulates your license? - LARA
Before you may test, what must you do? - Present 2 forms of ID
How should you schedule your test with PSI? - -Online
-Mail
-Phone/Fax
When will you receive your test score? - Immediately following the completion of the test
What are the 2 parts of the Residential Builder's Exam? - -Business & Law
-Practice & Trade
How long will you have to complete the Practice & Trade portion of the exam? - 180 mins
What is a 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 lumbar a floor joist has to be to span a certain distance
,Which topics will be covered on the Practice & Trade portion of the exam? - -Carpentry
-Roofing
-Insulation
Do you need a Residential Builder's License to work on commercial projects? - No
Where does the most fraud occur? - The residential market
As a builder, your license falls under the regulation of what? - -Rules by the director & board
-Laws of The State of Michigan
What is the make up of the 9 members of the board? - -6 individuals that have a
license/registration in the occupation in which the board monitors
-3 members of the general public
Under the definition of occupation 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 completing a hearing, shall assess a penalty(ies)? - The Board
If you fail to renew your license/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 them? - -Cease & desist order
-Formal complaint
-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 the respondent meets with the
department to discuss the complaint against them
What is a possible penalty for operating without a residential builder's license? - -A placement
of a limitation on the license
-Probation
-Suspension of license
What does a residential structure mean? - A premise used or intended to be used for a
residence purpose and related facilities appurtenant to the premises used or intended to be
used as an adjunct of residential occupancy
,When can an employee other than the listed salesperson make a sale? - When it's occasional
and incidental to the person's principle employment
Why would someone be allowed to operate without a residential builder's license? - -They are
an authorized representative of the US 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 Dec 21st, 2007, the department shall issue the license of a
residential builder and residential maintenance and alteration contractor for a period of how
many years 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
How is the salesperson license changed when the salesperson desires to change employment
from 1 residential builder to another? - -License will be forwarded to the department
-An application for transfer is made
-New license under the new employer will be issued
Regarding workmanship, how long does a client have to file a "verified complaint"? - 18 months
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 the notice that the licensee has violated the
asbestos abatement contractors licensing act, what is a possible consequence for this violation?
- -The department may suspend/revoke that person's license
-Fines may be issued
When the board issues the findings of a verified complaint, what happens? - -Department will
post on its website any final order of the board and the date it was issued
According to the Administrative Rules, what does and application for a license include? - -The
residence address of all individuals, partners, officers and/or members as requested by the
board
-The address if the principle place of business in Michigan
Upon final order of license suspension/revocation, the licensee shall surrender the license to
the department within how many days of the date of suspension/revocation? - 10 days
, According to the Administrative Rules, what shall a licensee include on all advertising? - -Name
on license
-License number
-Actual business address as shown on license
According to the purchase & sales agreement, the builder/contractor shall make certain that
the written agreement clearly states the terms of the transaction, including what? - -
Specifications & cost
-Type & quality of materials
-Type & amount of work to be done
After investigation, the department may request a licensee to appear at such
as is necessary to determine whether there is cause for a complaint that
would require a hearing or dismissal of the complaint. - Investigative Conference
Who can represent a respondent in a complaint? - -Attorney
-His/Her own self
What act was created to collect fees for the regulation of certain occupations, professions, and
for certain agencies and businesses; to create certain funds; and to prescribe certain powers
and duties of certain states agencies adepts? - State License Fee Act
What act encourages and contributes to the rehabilitation of former offenders and to assist
them in the assumption of the responsibilities of citizenship - Occupational License for Former
Offenders Act
According to the "Building Contract Fund", evidence of "intent to defraud" is defined as what? -
When a contractor/subcontractor appropriates money to him/her self for building operations
BEFORE the payment by him/her of all money due or so to become due to laborers,
subcontractors, material men, or others entitled to payment
According to the Construction Lien Act, what must be supplied by the owner, general
contractor, subcontractor or supplier within 10 days of being asked for a copy by anyone
entitled to a copy? - Notice of Commencement
How many days does the owner, general contractor, subcontractor or supplier have to produce
a copy of the Notice of Commencement when asked for a copy? - 10 days
The "Claim of Lien" must be filed within how many days of LAST furnishing labor or materials
for a project? - 90 days
Proceedings to foreclose must take place within how many days of the date that the claim lien
was recorded? - 1 year
ANSWERS | VERIFIED & UPDATED 2025
What is the 1st offense penalty for engaging in the practice of residential building without a
license? - Not less than $5K and not more than $25K and/or 1 year
What is the penalty for engaging in the practice of residential building, resulting in a death? -
Not less than $5K and not more than $50K and/or 4 years
On your individual builder's license application, what should you write as your "business
address"? - Your personal address
What is the cost of the individual builder's license? - $195
After receiving your residential builder's license, what are the only trades that are not covered
by your license? - -Plumbing
-Electrical
-HVAC
Who is the TESTING company for the State of Michigan? - PSI
What is the name of the DEPARTMENT that regulates your license? - LARA
Before you may test, what must you do? - Present 2 forms of ID
How should you schedule your test with PSI? - -Online
-Phone/Fax
When will you receive your test score? - Immediately following the completion of the test
What are the 2 parts of the Residential Builder's Exam? - -Business & Law
-Practice & Trade
How long will you have to complete the Practice & Trade portion of the exam? - 180 mins
What is a 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 lumbar a floor joist has to be to span a certain distance
,Which topics will be covered on the Practice & Trade portion of the exam? - -Carpentry
-Roofing
-Insulation
Do you need a Residential Builder's License to work on commercial projects? - No
Where does the most fraud occur? - The residential market
As a builder, your license falls under the regulation of what? - -Rules by the director & board
-Laws of The State of Michigan
What is the make up of the 9 members of the board? - -6 individuals that have a
license/registration in the occupation in which the board monitors
-3 members of the general public
Under the definition of occupation 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 completing a hearing, shall assess a penalty(ies)? - The Board
If you fail to renew your license/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 them? - -Cease & desist order
-Formal complaint
-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 the respondent meets with the
department to discuss the complaint against them
What is a possible penalty for operating without a residential builder's license? - -A placement
of a limitation on the license
-Probation
-Suspension of license
What does a residential structure mean? - A premise used or intended to be used for a
residence purpose and related facilities appurtenant to the premises used or intended to be
used as an adjunct of residential occupancy
,When can an employee other than the listed salesperson make a sale? - When it's occasional
and incidental to the person's principle employment
Why would someone be allowed to operate without a residential builder's license? - -They are
an authorized representative of the US 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 Dec 21st, 2007, the department shall issue the license of a
residential builder and residential maintenance and alteration contractor for a period of how
many years 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
How is the salesperson license changed when the salesperson desires to change employment
from 1 residential builder to another? - -License will be forwarded to the department
-An application for transfer is made
-New license under the new employer will be issued
Regarding workmanship, how long does a client have to file a "verified complaint"? - 18 months
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 the notice that the licensee has violated the
asbestos abatement contractors licensing act, what is a possible consequence for this violation?
- -The department may suspend/revoke that person's license
-Fines may be issued
When the board issues the findings of a verified complaint, what happens? - -Department will
post on its website any final order of the board and the date it was issued
According to the Administrative Rules, what does and application for a license include? - -The
residence address of all individuals, partners, officers and/or members as requested by the
board
-The address if the principle place of business in Michigan
Upon final order of license suspension/revocation, the licensee shall surrender the license to
the department within how many days of the date of suspension/revocation? - 10 days
, According to the Administrative Rules, what shall a licensee include on all advertising? - -Name
on license
-License number
-Actual business address as shown on license
According to the purchase & sales agreement, the builder/contractor shall make certain that
the written agreement clearly states the terms of the transaction, including what? - -
Specifications & cost
-Type & quality of materials
-Type & amount of work to be done
After investigation, the department may request a licensee to appear at such
as is necessary to determine whether there is cause for a complaint that
would require a hearing or dismissal of the complaint. - Investigative Conference
Who can represent a respondent in a complaint? - -Attorney
-His/Her own self
What act was created to collect fees for the regulation of certain occupations, professions, and
for certain agencies and businesses; to create certain funds; and to prescribe certain powers
and duties of certain states agencies adepts? - State License Fee Act
What act encourages and contributes to the rehabilitation of former offenders and to assist
them in the assumption of the responsibilities of citizenship - Occupational License for Former
Offenders Act
According to the "Building Contract Fund", evidence of "intent to defraud" is defined as what? -
When a contractor/subcontractor appropriates money to him/her self for building operations
BEFORE the payment by him/her of all money due or so to become due to laborers,
subcontractors, material men, or others entitled to payment
According to the Construction Lien Act, what must be supplied by the owner, general
contractor, subcontractor or supplier within 10 days of being asked for a copy by anyone
entitled to a copy? - Notice of Commencement
How many days does the owner, general contractor, subcontractor or supplier have to produce
a copy of the Notice of Commencement when asked for a copy? - 10 days
The "Claim of Lien" must be filed within how many days of LAST furnishing labor or materials
for a project? - 90 days
Proceedings to foreclose must take place within how many days of the date that the claim lien
was recorded? - 1 year
