Michigan Residential Builder Licensing Exam Latest Updated

M&A contractors include: - Answer A = Carpentry B = Concrete D = Excavation G = Insulation Work I = Masonry J = Painting & Decorating K = Siding M = Roofing If more than one office is used for work, the branch office must be __________ - Answer Licensed The one who obtains the residential builder's license is called a _____________ ____________ - Answer Qualifying Officer First Offense for practicing without a license - Answer Misdemeanor fine of $5,000 - $25,000 or prison for not more than 1 year, or both. Second offense for practicing without a license - Answer Misdemeanor fine of $5,000 - $25,000 or prison for not more than 2 years, or both. Death or serious injury - Answer Felony fine of $5,000 - $25,000 or prison for not more than 4 years, or both. Define a Residential Builder - Answer A person or entity who is involved in the construction of a residential structure or a combination residential and commercial structure. Define M&A contractor - Answer Person who for a fixed sum/price other than wages for personal labor for the repair, alteration, or addition/improvement to residential/commercial or residential structure. Salesperson - Answer employee of agent other than a qualifying officer who sells business for the contractor. who reissues licenses for salespeople? - Answer LARA (The Department) Which types of trade work require a different type of license other than the resi license? - Answer Plumbing, Electrical, and Mechanical. Who issues the license? - Answer LARA How is the director of LARA appointed? - Answer by the governor What types of people make up the Board of Residential Builders? - Answer 4 Licensed residential builders 2 M&A contractors 3 members of the public What are the duties of the board of residential builders? (4) - Answer 1. Interpretation of a license requirement 2. Aid in investigations 3. Set acceptable practice standards 4. Assess penalties for those who are licensed and are in violation of rules What happens if the qualifying officer's license is revoked? - Answer The entity's license is revoked as well. How can a foreign entity get a license? - Answer Only if authorized by the Corporations and Securities Commission. Non residents must file this to be considered for a license. - Answer An Irrevocable consent to service of process T or F, Builders must maintain a place of business in the state they operate in. - Answer True T of F, Contractors must maintain an accurate set of books/records open to inspection by the department (LARA). - Answer True If the department inquires, licensees must submit ___________ _____________ ___________ showing licensee's current financial status, and must do so within 30 days of inquiry. - Answer sworn financial statements T or F, Advertising must not misrepresent material facts. - Answer True Licensee shall include ____________, _______________, and ________________ in all advertising - Answer name, license number, and actual business address Is it legal to pay money or give gifts to customers in exchange for the use of their home as a model for potential clients? - Answer No. All agreements between builders and customers should be in writing and signed. (T or F). All changes require ___________ ____________ added to the contract. - Answer True, change orders Licensee violations include: 1. _________________ without legal excuse of contract 2. ______________ of funds/property 3. willful _____________ from or ______________ of plans/specs without authorization of owner 4. Willful ___________ of building laws 5. Failure to deliver entire _______________. 6. If a _______________ fails to pay money received to the contractor. 7. _____________ or _______________ an unlicensed person 8. Allowing a _____________ to be used by an unlicensed individual. 9. Accepting a _____________, ______________, or _______________ by a salesperson 10. becoming _______________ 11. poor ____________ - Answer 1. Abandonment 2. Diversion 3. Departure, disregard 4. Violation 5. Agreement/contract 6. salesperson 7. Aiding, abetting 8. license 9. commission, bonus, consideration 10. Insolvent (filing for bankruptcy) 11. Workmanship Other violations of license 1 _________ in obtaining license 2 _____________ in practicing an occupation 3 _______________ of a rule of conduct 4 _______ of good moral character 5 commit of acts of gross ______________ 6 Practice in false ______________ 7 demonstrate ________________ 8 fail to __________ with subpeona 9 fail to respond to __________ 10 fail to comply with final __________ issued by the board. - Answer 1. Fraud 2. Fraud 3. Violation 4. Lack 5. Negligence 6. Advertising 7. Incompetence 8. comply 9. citation 10. Order Complain against a build must be made within ____ months after completion, occupancy, or purchase, whichever occurs later. - Answer 18 Complaint will be lodged with the ______________. - Answer department (LARA) the department of attorney general, the department, a board, or any other person may file a complaint with or WITHOUT a complaint from the _________ - Answer public Upon receipt of a building inspection report issued to the department by a state or local building enforcement official, which report verifies or confirms the nature of the complaint, department will send by certified mail a copy of the complaint to both the ________________ and _________________. - Answer complaintent, licensee (called an arbitration clause). This avoids the use of courts to settle claims in order to save both the contractor and customer money. another name for an alternative dispute resolution written into contracts - Answer an arbitration clause The department will not initiate a proceeding against a licensee unless licensee has not complied with a decision ordered as a result of an arbitration within _____ days after complaint was filed with the department - Answer 90 A licensed builder who commits a violation may be assessed one or more of these penalties 1. Requirement that licensee must deposit money received into an __________ account which can be used only under certain conditions 2. _______ of a license (2) 3. Revocation of a __________ 4. A _______ __________, paid to the department (LARA), not to exceed ____________ 5. Censure (define) 6. License is put under __________ for a period of time 7. a requirement that ________________ be made. - Answer 1. escrow 2. suspension/denial 3. license 4. civil fine, $10,000 5. formal disapproval 6. review/evaluation 7. restitution a portion of each builder license fee is put into a _________ _____________ ___________, used by the attorney general to investigate unlicensed activities - Answer Builder Enforcement Fund unlicensed builders cannot impose a _______ on properties - Answer lien What is a building contract fund? - Answer money paid to a contractor/subcontractor should be considered to be a "trust fund" for the benefit of the person making the payment. The contractor who is paid is considered the trustee. funds paid to the contractor shall first be applied to pay _____________, ____________, and ____________. A licensee who fails to apply the funds to the appropriate individuals shall be guilty of a ________ - Answer laborers, subcontractors, material men. felony. The appropriation of a contractor of any monies paid to him for building operations before the payment by him of all monies due to ____________, _____________, or _______________ shall be evidence of ______________ to __________________. - Answer laborers, subcontractors, material men, intent, defraud. Define legal description - Answer A description of real property that gives the exact location anywhere in the world. give the dimensions of an acre in square feet as well as the _____ x _____ dimensions in ft - Answer 1 Acre = 43,560 Sq ft 1 Acre = 208 ft by 208 ft property is described through a series of ____________ and ______________ ______________ - Answer distances, angular measurements.