Michigan Builders License Exam Study Guide
CORRECT QUESTIONS & ANSWERS(RATED A)
What is the first offense penalty for engaging in the practice of residential building without a license? -
ANSWER 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 builders license, resulting in a death? -
ANSWER 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"? -
ANSWER Your personal address
What is the cost for the individual builder's license? - ANSWER $195
After receiving your residential builder's license, what are the only trades not covered by your license? -
ANSWER Plumbing, electrical, and HVAC
Who is the TESTING company for the State of Michigan? - ANSWER PSI
What is the name of the department that regulates your license? - ANSWER LARA
What are the 2 parts of the Residential Builder Examination? - ANSWER Business and Law
examination/Practice and Trade examination
What is a good quick asset ratio? - ANSWER 1 to 1
Under the Carpentry section of the test, what does a "span table" tell us? - ANSWER 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 - ANSWER It allows you to work on commercial
properties
Where does most fraud occur? - ANSWER In the residential market
As a builder, your license falls under the regulation of: - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER 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? - ANSWER 60 days
When the department is investigating a complaint and finds evidence of a violation, what actions can be
brought against the respondent? - ANSWER 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? - ANSWER 60 days
What is a compliance conference? - ANSWER 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? - ANSWER Residential structure
An employee other than the listed salesperson may make a sale when: - ANSWER 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: - ANSWER - 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? - ANSWER 3 years
After receiving your initial residential builder's license, how many hours of continuing competency are
required within the next 3 years? - ANSWER 21 hours
If a salesperson desires to change employment from one residential builder or maintenance and
alteration contractor to another: - ANSWER 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"? - ANSWER 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? - ANSWER 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? - ANSWER 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: - ANSWER - 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: - ANSWER - 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? - ANSWER 10 days
According to Administrative rules, a licensee shall include the following in all advertising: - ANSWER - The
name on the license
- The license number
- The actual business address as shown on the license
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: - ANSWER - Specifications and cost
- The type and quality of materials
- The type and amount of work to be done
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. - ANSWER Investigative conference
A respondent in a complaint may be represented by: - ANSWER An attorney or his/her own self
