Michigan Builders Business/Law/Accounting Questions
and Answers Already Passed
Verification Form I-9 must be completed by applicants providing proof of identity and
employment eligibility within of employment. - Answer 3 days
What type of business is the easiest to establish and allows the owner to determine
how profits are used although they are personally liable for all debt and assets? -
Answer Sole Proprietorship
A is a joint co-owner partnership established to specifically increase bonding
and bidding capacities and profits. - Answer General Proprietorship
Provisions of the Americans with Disabilities (ADA) Law apply to employers having
employees. - Answer 15 or more
What Federal Act requires those working on federal and federally funded
construction projects to be paid a minimum prevailing wage for their trade? - Answer
Davis Bacon
Which of the following are fringe benefits that supplement an employee's hourly
wage? - Answer Paid vacation, sick leave, 401k plan company vehicle
To avoid being held liable, the contractor must file a once the lien payment
is received. - Answer Lien release
What is the Michigan Act 230? - Answer It creates the Commission and regulates
code and inspections in the State.
What unit is issued a Certificate of Acceptability and will not be inspected at the site?
- Answer Manufactured home
What is the purpose of the subcontractor completing a Sworn Statement? - Answer
To get paid by the contractor
What is the purpose of a Partial Unconditional Waiver? - Answer To prove that
partial payment to subs or suppliers has been received.
The subcontractor has to file a lien against the property for non-payment
from the contractor. - Answer 90 days
What is the penalty to contractors or subcontractors for intentionally trying to defraud
employees or a customer? - Answer A fine of no more than $5,000 and/or 3 yrs in
prison
In accordance with the Michigan Construction Lien Act, the homeowner has to
provide signed copies of the Commencement Agreement to the all parties that
request it. - Answer 10 days
The contractor provides a blank Notice of Furnishing to whomever requests the
Commencement Agreement. It must be completed and returned to the contractor
,every . - Answer 20 days if they are a supplier; 30 days if they are a
laborer
If a builder is required to be licensed, the penalty for working without a license .
- Answer is a fine no less that $5,000 or greater than $25,000
Upon final order of license suspension or revocation, the licensee has in
which to surrender their license to the Department. - Answer 10 days
Failing to renew one's license before the deadline will result in a . - Answer
$20 late fee
How long does the homeowner/business have to file a complaint after the project is
completed? - Answer 18 months
What aids and protects the contractor from accusations of project abandonment
without a good legal excuse? - Answer The arbitration clause
To avoid being fined, the contractor must notify the Department within of
relocating their business or changing the business' name. - Answer 10 days
Definitively, a is a person that constructs, replaces, improves, or
demolishes residential or commercial structures for a fixed or lump sum price or fee.
- Answer Licensed Residential Builder
When can a subcontractor work without being licensed? - Answer When they are
working under a licensed contractor that is not a mechanical contractor
An owner/landlord is not permitted to do their own building alterations .-
Answer When the repairs are structural in nature
A complaint is when it cannot be resolved at the informal investigative
hearing. - Answer referred to the Administrative Law Hearing Examiner
What body assesses the penalty and issues the "Final Order" to settle the
complaint? - Answer The Board
How long does the Respondent have to appeal the "Final Order" decision? - Answer
30 days
Who appoints the Director of the Department? - Answer The Governor with consent
of the Senate
How long does the Board serve? - Answer 4 yrs
A Builder's incompetence refers to . - Answer failure to conform to
minimum accepted professional standards
, What required bond is a percentage of the project cost put up by the builder to
ensure the homeowner or business the project will eventually be completed? -
Answer Performance Bond
What is the biggest environmental/human concern created during masonry
construction? - Answer Silicon dust
What is the layer of flashing installed over base flashing called? - Answer Counter
Flashing
Who pays for planned or unforeseen changes made to the contract scope of work? -
Answer Whomever is specified in the contract
How much retainage may be held? - Answer Whatever is specified in the contract
What determines your working capital? - Answer Assets - Liabilities
How long does the contractor have to complete both sections of the licensing exam?
- Answer 1 year from stamped date on license application
Why is it unwise to do business as a sole proprietorship? - Answer The risk of losing
all personal assets if the project goes wrong
Two contractors that combine their commercial resources form a . - Answer
joint venture
Who regulates the building profession, including the work and licensing? - Answer
The Department of Licensing and Regulatory Affairs
Why is a builder's license required to perform residential work and not for
commercial building? - Answer There is more fraud in residential building
What does a builder's license qualify the licensed builder to do? - Answer Build all of
the home except for mechanical features
Which type of bond guarantees the contractor will perform the scope of work quoted
if they win the bid? - Answer Bid Bond
Which type of bid bond requires the contractor to lose the entire bond to the owner if
the contractor backs out? - Answer Liquidated Damages
Which type of bid bond requires the contractor to pay the difference in cost to the
next lowest bid if the contractor backs out? - Answer Difference in Price
Which type of bond protects the owner from property liens because the general
contractor pays the subcontractors and suppliers? - Answer Payment Bond
How many times a year must the board members meet? - Answer At least 2
and Answers Already Passed
Verification Form I-9 must be completed by applicants providing proof of identity and
employment eligibility within of employment. - Answer 3 days
What type of business is the easiest to establish and allows the owner to determine
how profits are used although they are personally liable for all debt and assets? -
Answer Sole Proprietorship
A is a joint co-owner partnership established to specifically increase bonding
and bidding capacities and profits. - Answer General Proprietorship
Provisions of the Americans with Disabilities (ADA) Law apply to employers having
employees. - Answer 15 or more
What Federal Act requires those working on federal and federally funded
construction projects to be paid a minimum prevailing wage for their trade? - Answer
Davis Bacon
Which of the following are fringe benefits that supplement an employee's hourly
wage? - Answer Paid vacation, sick leave, 401k plan company vehicle
To avoid being held liable, the contractor must file a once the lien payment
is received. - Answer Lien release
What is the Michigan Act 230? - Answer It creates the Commission and regulates
code and inspections in the State.
What unit is issued a Certificate of Acceptability and will not be inspected at the site?
- Answer Manufactured home
What is the purpose of the subcontractor completing a Sworn Statement? - Answer
To get paid by the contractor
What is the purpose of a Partial Unconditional Waiver? - Answer To prove that
partial payment to subs or suppliers has been received.
The subcontractor has to file a lien against the property for non-payment
from the contractor. - Answer 90 days
What is the penalty to contractors or subcontractors for intentionally trying to defraud
employees or a customer? - Answer A fine of no more than $5,000 and/or 3 yrs in
prison
In accordance with the Michigan Construction Lien Act, the homeowner has to
provide signed copies of the Commencement Agreement to the all parties that
request it. - Answer 10 days
The contractor provides a blank Notice of Furnishing to whomever requests the
Commencement Agreement. It must be completed and returned to the contractor
,every . - Answer 20 days if they are a supplier; 30 days if they are a
laborer
If a builder is required to be licensed, the penalty for working without a license .
- Answer is a fine no less that $5,000 or greater than $25,000
Upon final order of license suspension or revocation, the licensee has in
which to surrender their license to the Department. - Answer 10 days
Failing to renew one's license before the deadline will result in a . - Answer
$20 late fee
How long does the homeowner/business have to file a complaint after the project is
completed? - Answer 18 months
What aids and protects the contractor from accusations of project abandonment
without a good legal excuse? - Answer The arbitration clause
To avoid being fined, the contractor must notify the Department within of
relocating their business or changing the business' name. - Answer 10 days
Definitively, a is a person that constructs, replaces, improves, or
demolishes residential or commercial structures for a fixed or lump sum price or fee.
- Answer Licensed Residential Builder
When can a subcontractor work without being licensed? - Answer When they are
working under a licensed contractor that is not a mechanical contractor
An owner/landlord is not permitted to do their own building alterations .-
Answer When the repairs are structural in nature
A complaint is when it cannot be resolved at the informal investigative
hearing. - Answer referred to the Administrative Law Hearing Examiner
What body assesses the penalty and issues the "Final Order" to settle the
complaint? - Answer The Board
How long does the Respondent have to appeal the "Final Order" decision? - Answer
30 days
Who appoints the Director of the Department? - Answer The Governor with consent
of the Senate
How long does the Board serve? - Answer 4 yrs
A Builder's incompetence refers to . - Answer failure to conform to
minimum accepted professional standards
, What required bond is a percentage of the project cost put up by the builder to
ensure the homeowner or business the project will eventually be completed? -
Answer Performance Bond
What is the biggest environmental/human concern created during masonry
construction? - Answer Silicon dust
What is the layer of flashing installed over base flashing called? - Answer Counter
Flashing
Who pays for planned or unforeseen changes made to the contract scope of work? -
Answer Whomever is specified in the contract
How much retainage may be held? - Answer Whatever is specified in the contract
What determines your working capital? - Answer Assets - Liabilities
How long does the contractor have to complete both sections of the licensing exam?
- Answer 1 year from stamped date on license application
Why is it unwise to do business as a sole proprietorship? - Answer The risk of losing
all personal assets if the project goes wrong
Two contractors that combine their commercial resources form a . - Answer
joint venture
Who regulates the building profession, including the work and licensing? - Answer
The Department of Licensing and Regulatory Affairs
Why is a builder's license required to perform residential work and not for
commercial building? - Answer There is more fraud in residential building
What does a builder's license qualify the licensed builder to do? - Answer Build all of
the home except for mechanical features
Which type of bond guarantees the contractor will perform the scope of work quoted
if they win the bid? - Answer Bid Bond
Which type of bid bond requires the contractor to lose the entire bond to the owner if
the contractor backs out? - Answer Liquidated Damages
Which type of bid bond requires the contractor to pay the difference in cost to the
next lowest bid if the contractor backs out? - Answer Difference in Price
Which type of bond protects the owner from property liens because the general
contractor pays the subcontractors and suppliers? - Answer Payment Bond
How many times a year must the board members meet? - Answer At least 2
