MI BUILDERS BUSINESS AND LAW 370 ACTUAL
EXAM PAPER 2026 QUESTIONS SOLUTIONS
GRADED A+
◉ 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
EXAM PAPER 2026 QUESTIONS SOLUTIONS
GRADED A+
◉ 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
