MI BUILDERS BUSINESS AND LAW 370 FINAL
PAPER 2026 COMPLETE ANSWERS VERIFIED
◉ 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
◉ How many board members are there? Answer: 9
◉ What kind of members does the board consist of? Answer: 4
licensed builders, 2 licensed maintenance and alteration contractors,
1 registered inspector, 2 general public
◉ How long is each license cycle? Answer: 3 yrs
◉ How much time does the department have to accept receipt of
complaint to complainant? Answer: 15 days
◉ How much time is allotted to respond to a formal complaint?
Answer: 15 days
, ◉ How much time does the board have to determine penalties after
an administrative hearing? Answer: 60 days
◉ How much time does a person have to request a limitation be
removed after such notice? Answer: 30 days
◉ How much time does a licensed person have to submit financial
records after the board requests them? Answer: 30 days
◉ How much time does a licensee have to notify the department of a
change in name or address of the person? Answer: 30 days
◉ How much time is allotted to a licensee notifying them of an
investigative conference? Answer: 10 days
◉ How much time is allotted to a residential builder to return sales
person's license and for sales person to return I.D. card by certified
mail? Answer: 5 days
◉ How much time does a licensee have to repay the construction
lien fund in order to avoid suspension of license? Answer: 90 days
◉ Who issues subpoenas? Answer: Circuit court
PAPER 2026 COMPLETE ANSWERS VERIFIED
◉ 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
◉ How many board members are there? Answer: 9
◉ What kind of members does the board consist of? Answer: 4
licensed builders, 2 licensed maintenance and alteration contractors,
1 registered inspector, 2 general public
◉ How long is each license cycle? Answer: 3 yrs
◉ How much time does the department have to accept receipt of
complaint to complainant? Answer: 15 days
◉ How much time is allotted to respond to a formal complaint?
Answer: 15 days
, ◉ How much time does the board have to determine penalties after
an administrative hearing? Answer: 60 days
◉ How much time does a person have to request a limitation be
removed after such notice? Answer: 30 days
◉ How much time does a licensed person have to submit financial
records after the board requests them? Answer: 30 days
◉ How much time does a licensee have to notify the department of a
change in name or address of the person? Answer: 30 days
◉ How much time is allotted to a licensee notifying them of an
investigative conference? Answer: 10 days
◉ How much time is allotted to a residential builder to return sales
person's license and for sales person to return I.D. card by certified
mail? Answer: 5 days
◉ How much time does a licensee have to repay the construction
lien fund in order to avoid suspension of license? Answer: 90 days
◉ Who issues subpoenas? Answer: Circuit court
