Michigan Builders License Exam Study Guide With Complete Solution

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 What act was created to collect fees for the regulation of certain occupations and professions, and for certain agencies and businesses; to create certain funds; and to prescribe certain powers and duties of certain state agencies and departments? - Answer State License Fee Act What is the "Occupational License For Former Offenders Act"? - Answer An act to encourage and contribute to the rehabilitation of former offenders and to assist them in the assumption of the responsibilities of citizenship According to the "Building Contract Fund", evidence of "intent to defraud" is defined as: - Answer When a contractor, or any subcontractor, appropriates moneys to his/her self for building operations BEFORE the payment by him of all moneys due or so to become due laborers, subcontractors, materialmen or others entitled to payment According to the Construction Lien Act, what must be supplied by owner, General Contractor, Sub-Contractor, or Supplier within 10 days of being asked for a copy by anyone entitled to a copy? - Answer Notice of commencement The "Claim of Lien" must be filed within how many days of LAST furnishing labor or materials for a project? - Answer 90 days Proceedings to foreclose must take place within ____ of the date that the claim lien was recorded. - Answer 1 year According to the Construction Lien Act, what recommendations are given for your protection? - Answer - Never use your assets to complete someone's project - Get sufficient down payments and/or obtain sufficient progress payments as the job progresses - Have well defined contracts which include rights and responsibilities of binding parties Which document lists each subcontractor, supplier and laborer, for whom payment of wages or fringe benefits and withholdings is due but unpaid, with whom the (contractor)(subcontractor) has (contracted)(subcontracted) for performance under the contract with the owner or lessee, and the amounts due to the persons as of the date of the statement? - Answer The sworn statement A claim of lien MUST be completed within how many days of last being on the job site? - Answer 90 days If after filing a claim of lien, you DO get paid before the lawsuit, what form must you complete? - Answer Discharge of construction lien What is the maximum amount you can collect through a judgment in the small claims division of the district court using the small claims form DC84? - Answer $6,000 After Mr. Jones receives a sworn statement that he owes ABC framing $40,000, how does Mr. Jones know that ABC framing was ever on the jobsite? - Answer The proof of service of notice of furnishing According to the State Construction Code Act, how often will the state code be updated by the Construction Code Commission? - Answer Every 3 years The Uniform Commercial Code states that a contract for the sale of goods for the price of $1,000.00 or more must be: - Answer In writing sufficient to indicate a sale between parties and signed According to the Americans With Disabilities Act (ADA), which of the following is NOT true? The law applies to employers with 15 or more employees Employees are allowed to require a medical exam before making a job offer The first violation results in a $55,000 fine ADA requirements are enforceable only through the U.S. Department of Justice - Answer Employees are allowed to require a medical exam before making a job offer Minimum Wage Law states: - Answer - After 40 hours in any one work week, compensation is 1 1/2 times the regular rate - An employer shall not discriminate based on sex when paying employees for the same work requirement Who is covered by the Employing Minors Youth Employment Standards Act? - Answer Ages 14, 15, 16, and 17 The Family Medical Leave Act states: - Answer - Employees may receive unpaid leave for certain reasons - Employees may receive up to 12 weeks of leave in a 12 month period - This law pertains to employers with 50 or more employees engaged in commerce or affecting commerce Which of the following is true in regard to employing minors? - Answer - A minor shall not work more than 6 days a week - Every 5 hours of work requires a 30 minute break What is a disadvantage of a sole proprietorship? - Answer Owner is liable for all debts What is a disadvantage of a general partnership? - Answer Each partner is liable for the business debts of the other partner What allows an individual to invest in a general partnership but have no input to how the partnership is operated? - Answer Limited partnership What is it called when several business members come together to form a new business entity larger and financially stronger than if they acted alone? - Answer Joint Venture How many days after notification of a complaint does the respondent have to respond? - Answer 15 days Once the investigative unit receives a complaint, who do they verify the legitimacy of the complaint with? - Answer The building inspector of the local jurisdiction (city building department) If the dispute cannot be resolved at the informal conference, where does it go next? - Answer The administrative law hearing examiner (also known as hearing officer/presiding officer) The findings/penalty of the Administrative Law Hearing Examiner are reported to: - Answer - The respondent and claiment - The board - The investigative unit In reference of the lien law, what is the FIRST document that has to be filled out to continue the lien process? - Answer The notice of commencement Homes built prior to what year require at least 1 smoke detector? - Answer 1974 What STATE law regulates discrimination on the jobsite? - Answer The Elliott-Larsen Civil Rights Act A contract is not required if the job is under: - Answer $1,000 Within how many days of being on the jobsite must the I9 form be completed? - Answer 3 days What act requires prevailing wages to be paid out? - Answer The Davis-Bacon Act What is the most common type of contract used in residential construction? - Answer Lump sum contract What should you be sure to include in your contracts? - Answer - Change orders - Weather/ground conditions - Buried debris What is true in regard to a cost plus/fee contract (Construction Management)? - Answer - The total construction costs are unknown to the owner - The contractor provides a target estimate - You must have written agreement concerning payment of contractor fees What type of contract is used when the scope of work is poorly defined and/or to cover emergency repairs and renovations to occupied facilities? - Answer Cost plus percentage of cost contract (Time and Materials) What type of contract requires the owner/architect to compile a list of total quantities as well as the contractor to provide the cost per unit to supply and install? - Answer Unit price contract When having a contract signed, what should you be sure to verify first online or at the assessors office? - Answer Legal ownership When asking a customer for a certain percent of money after a section(s) of a job is completed, it is called: - Answer Progress payments What is it called when, at the end of a job, you walk through with a customer and check off any needed repairs or discuss work to be redone? - Answer A final punch list What are 2 items suggested to avoid in your contracts? - Answer Start and completion dates Kitchen cabinet layouts from the kitchen designer are an example of what? - Answer Shop drawings Change in conditions should be the responsibility of: - Answer The owner What should be included in close out documents? - Answer - Owner/operator manuals - Copies of all warranties - Check off list from mechanical contractors With a permit, when should final payment be due? - Answer Upon final inspection In a contract, it is wise to include that care and maintenance of the owner's pet(s) is the responsibility of: - Answer The owner only On new construction sites what are you required to have for everyone onsite? - Answer Toilet facilities In regard to moving personal items, it is best if: - Answer - You do not move them - You give written notice to neighbors if work will include any major vibrations that could cause items to fall While on the jobsite, when is it important to take pictures and keep photo records? - Answer - Before work begins - After work completion - At various stages during the work What things should be included in a log book? - Answer - Weather conditions - What subcontractors are onsite - Various levels of progress/times As a general contractor, what must you always have onsite? - Answer A competent employee with a first aid card Who is responsible for temporary power? - Answer Whoever is stated in the contract According to the sample contract on page 27, when is full payment of a change order due? - Answer Upon agreement and signing of the change order What should a quality contract contain? - Answer - Name and location of the project - Drawings and specifications identified as "Project Number" - Insurance requirements for owner and contractor In order to protect yourself from potentially costly changes, what should you include in any contract to build a new house? - Answer "Per project number, last revised on" then list specific page numbers and revision dates What is a verbal direction from an architect or designer to change something called? - Answer A modification Ownership of drawings must be: - Answer Defined Who is responsible for corrections to completed work according to the subcontract? - Answer The subcontractor responsible for the correction (whoever installed it protects it) When can the builder substitute materials? - Answer Only with the permission of the owner The cost of moving equipment on and off the jobsite is called: - Answer Mobilization costs Whatever contract you decide to use should be reviewed by: - Answer An attorney Who is responsible for collecting and maintaining safety data sheets on the jobsite? - Answer The general contractor Any code related penalties that are caused for the general contractor are the responsibility of: - Answer The subcontractor Which of the following is NOT a responsibility of the subcontractor? provide progress reports provide material safety data information as requested provides for toolbox safety talks provides for the protection and safety of persons and property - Answer Provides for toolbox safety talks What are the three methods for alternative dispute resolution? - Answer Mediation, arbitration, facilitation In which method of alternative dispute resolution is the award settlement binding and there is no appeal process? - Answer Arbitration When is substantial completion of work obtained? - Answer When the owner can take possession and use the structure for its intended purpose (received a certificate of occupancy) According to the video "Lead Paint: A Toxic Legacy", what are the possible effects that lead paint can have on children? - Answer - Brain damage - Behavioral problems - Propensity to violence and aggression How far back does the data and research show the dangers of lead paint? - Answer The early 1900s According to the video "Don't Spread Lead", if a house was built before what year, you should assume the house has lead paint as a safety precaution? - Answer 1978 To protect yourself from lead dust and debris, what should you do? - Answer - Wear safety glasses - Wear disposable coveralls and shoe covers - Wear a respirator When working with lead paint: - Answer Work wet and clean Which of the following statements about lead exposure are true? - Answer - Lead stays in the blood stream for approximately 30 days - Lead stays in soft organs for 6 to 8 months What current techniques are there to identify lead paint? - Answer - X-ray fluorescence - Laboratory analysis - 3rd party inspections (risk assessment) What are the controls for lead based paint? - Answer - Removal of LBP through safe work practices - Enclosure/encapsulation Contractors are not required to be "certified renovators" if they do the following: - Answer - Demolition of unoccupied structures - MIOSHA Part 603 Rules are still applicable Lead dust breathed in by adults can create disorders, including: - Answer Kidney and brain damage What is a colorless, odorless, radioactive gas that is caused naturally in the soil but can seep out? - Answer Radon The EPA has set a "Take Action Level" for radon at: - Answer 4 PCI/L Radon is the second leading cause of ________. There are 21,000 related deaths in the U.S. each year. - Answer Lung cancer Up until the ______, asbestos was commonly used in many building materials - Answer 1980s To protect yourself from asbestos during renovations or demolition, what is the most important thing you can do? - Answer Have the house surveyed by a qualified asbestos professional Asbestos containing material (ACM) means any material containing more than _____ asbestos - Answer 1% One who is capable of identifying existing asbestos hazards in the workplace and selecting the appropriate control strategy for asbestos exposure, who has the authority to take prompt corrective measures to eliminate them is called: - Answer The competent person Common products that might have contained asbestos in the past, and conditions which may release fibers, include: - Answer - Steam pipes, boilers and furnace ducts - Resilient floor tiles