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