MICHIGAN RESIDENTIAL BUILDER
LICENSING EXAM WITH ACTUAL
CORRECT Q UESTIONS AND
VERIFIED DETAILED ANSWERS
ALREADY GRADED A+
GUARANTEED PASS
A deed restriction may limit the size of ____________, the use of _______________, landscaping
provisions, etc.
improvements, property.
What is title insurance?
policy that protects the insured against monetar y losses that result due to a defective title.
What kinds of issues can arise from a title?
1. unrecorded instruments
2. forged instruments and deeds
3. information the examining attorney may overlook
4. Undisclosed or missing heirs, etc
What is a bid bond and what is it used for?
a bond that guarantees that you will accept the work if you win the contract. The bid fee (usually 5% or
10%) is a damages calculation that is paid when you win the bid, but then decide not to take the work.
What is a performance and payment bond?
Requires that each contractor to whom a contract is awarded shall furnish bonds which contain 2
obligations :
1. performance to indemnify the owner against loss resulting from the failure of the contractor to
complete work in accordance w ith plans and specs.
2. guarantee payment of all bills incurred by the contractor for labor or materials for work.
Maintenance bonds (AKA warranties)
1 / 3
Agrees to defect all defects of workmanship and materials for a specified time following completion.
Subdi vision Bonds
guarantees all site improvements and utilities as well as individual buildings themselves will be
constructed in accordance with governing codes and ordinances.
Comprehensive General Liability Insurance
protects against liability for bodily in jury to a member of the public arising out of the contractor's
operations, the contractor's employees and the subcontractors.
Builder's Risk Property Damage (Insurance)
Protects partially built structures and contents due to theft, vandalism, or other natu ral causes
Worker's compensation insurance
1. Covers employee loss of wages and medical care due to job injury
Worker's compensation insurance is required if the company employs ______ or more employee for
______ hours or more per week for at least ______ weeks OR employ _____ or more employees full or
part time at the same time.
1, 35, 13, 3
A buyer has the right to cancel a home solicitation sale until _________ of the ___________ business
day.
midnight, third
Notice of commencement
Announces that work is about to begin on a home building or remodeling project.
What does a notice of commencement contain? (3)
1. A legal description of the property
2. Name and address of the owner or lessee of the property
3. Name and address of the contractor.
What does a n otice of commencement indicate? (3)
1. Where the work is being done
2. Where subcontractors, suppliers, and laborer workers are to send their bills for payment.
3. Who the responsible parties are in the contract.
What does a homeowner do with a notice of c ommencement?
1. Provides a copy of the form within 10 days to any subcontractor, supplier, or laborer on the job who
requests a copy
2. If homeowner doesn't live on property, they must post a copy of the form in a conspicuous manner.
3. Keep a copy for his /her records
2 / 3
What does a sub, laborer, or supplier do with a notice of commencement? (3)
1. Use info to determine where to submit bills for payment
2. Use it to determine the responsible party if it becomes necessary to file a lien
3. Use the information t o determine how to file a claim of lien
Notice of Furnishing
A notice to the owner and to the contractor showing that a particular individual or entity is providing
improvements to real property.
Who sends a notice of furnishing?
subcontractors, suppliers, or laborers
What must be included in a notice of furnishing? (3)
1. Name and address of the party who contracted with the subs and supplier (contractor)
2. Description of the type of work performed
3. Names and addresses of potential lien claimants, subco ntractors, suppliers, and laborers .
When should a notice of furnishing be sent?
provide the notice of furnishing within 20 days of the first date of work and/or delivery of materials.
Laborers have 30 days from the date that wages are contractually due.
Proof of Service of Notice of Furnishing
Notarized form which verifies that the notice of furnishing was sent to the appropriate individual .
Why is a Proof of Service of Notice of Furnishing necessary?
If a claim of lien is filed later, this document will be needed in order to prove the sub, laborer, or
supplier gave proper notice of what work or supplies were provided on the job.
What does a sworn statement do?
tells who is owed money, in what amounts, and for what supplies or work done.
Why is a sworn state ment important? (homeowners and suppliers/subs/laborers)
For a homeowner, it's a legal record of all items for which you are being billed
for subs/laborers/suppliers, it is a legal record of money owed to you.
Should a sworn statement always be obtained by a homeowner before making payments? (Y or N)
Yes
Does the law require a sworn statement be prepared by the sub or supplier whenever payment is
requested? (Y or N)
Yes
What is a construction waiver and what does it do? Powered by TCPDF (www.tcpdf.org)
3 / 3
LICENSING EXAM WITH ACTUAL
CORRECT Q UESTIONS AND
VERIFIED DETAILED ANSWERS
ALREADY GRADED A+
GUARANTEED PASS
A deed restriction may limit the size of ____________, the use of _______________, landscaping
provisions, etc.
improvements, property.
What is title insurance?
policy that protects the insured against monetar y losses that result due to a defective title.
What kinds of issues can arise from a title?
1. unrecorded instruments
2. forged instruments and deeds
3. information the examining attorney may overlook
4. Undisclosed or missing heirs, etc
What is a bid bond and what is it used for?
a bond that guarantees that you will accept the work if you win the contract. The bid fee (usually 5% or
10%) is a damages calculation that is paid when you win the bid, but then decide not to take the work.
What is a performance and payment bond?
Requires that each contractor to whom a contract is awarded shall furnish bonds which contain 2
obligations :
1. performance to indemnify the owner against loss resulting from the failure of the contractor to
complete work in accordance w ith plans and specs.
2. guarantee payment of all bills incurred by the contractor for labor or materials for work.
Maintenance bonds (AKA warranties)
1 / 3
Agrees to defect all defects of workmanship and materials for a specified time following completion.
Subdi vision Bonds
guarantees all site improvements and utilities as well as individual buildings themselves will be
constructed in accordance with governing codes and ordinances.
Comprehensive General Liability Insurance
protects against liability for bodily in jury to a member of the public arising out of the contractor's
operations, the contractor's employees and the subcontractors.
Builder's Risk Property Damage (Insurance)
Protects partially built structures and contents due to theft, vandalism, or other natu ral causes
Worker's compensation insurance
1. Covers employee loss of wages and medical care due to job injury
Worker's compensation insurance is required if the company employs ______ or more employee for
______ hours or more per week for at least ______ weeks OR employ _____ or more employees full or
part time at the same time.
1, 35, 13, 3
A buyer has the right to cancel a home solicitation sale until _________ of the ___________ business
day.
midnight, third
Notice of commencement
Announces that work is about to begin on a home building or remodeling project.
What does a notice of commencement contain? (3)
1. A legal description of the property
2. Name and address of the owner or lessee of the property
3. Name and address of the contractor.
What does a n otice of commencement indicate? (3)
1. Where the work is being done
2. Where subcontractors, suppliers, and laborer workers are to send their bills for payment.
3. Who the responsible parties are in the contract.
What does a homeowner do with a notice of c ommencement?
1. Provides a copy of the form within 10 days to any subcontractor, supplier, or laborer on the job who
requests a copy
2. If homeowner doesn't live on property, they must post a copy of the form in a conspicuous manner.
3. Keep a copy for his /her records
2 / 3
What does a sub, laborer, or supplier do with a notice of commencement? (3)
1. Use info to determine where to submit bills for payment
2. Use it to determine the responsible party if it becomes necessary to file a lien
3. Use the information t o determine how to file a claim of lien
Notice of Furnishing
A notice to the owner and to the contractor showing that a particular individual or entity is providing
improvements to real property.
Who sends a notice of furnishing?
subcontractors, suppliers, or laborers
What must be included in a notice of furnishing? (3)
1. Name and address of the party who contracted with the subs and supplier (contractor)
2. Description of the type of work performed
3. Names and addresses of potential lien claimants, subco ntractors, suppliers, and laborers .
When should a notice of furnishing be sent?
provide the notice of furnishing within 20 days of the first date of work and/or delivery of materials.
Laborers have 30 days from the date that wages are contractually due.
Proof of Service of Notice of Furnishing
Notarized form which verifies that the notice of furnishing was sent to the appropriate individual .
Why is a Proof of Service of Notice of Furnishing necessary?
If a claim of lien is filed later, this document will be needed in order to prove the sub, laborer, or
supplier gave proper notice of what work or supplies were provided on the job.
What does a sworn statement do?
tells who is owed money, in what amounts, and for what supplies or work done.
Why is a sworn state ment important? (homeowners and suppliers/subs/laborers)
For a homeowner, it's a legal record of all items for which you are being billed
for subs/laborers/suppliers, it is a legal record of money owed to you.
Should a sworn statement always be obtained by a homeowner before making payments? (Y or N)
Yes
Does the law require a sworn statement be prepared by the sub or supplier whenever payment is
requested? (Y or N)
Yes
What is a construction waiver and what does it do? Powered by TCPDF (www.tcpdf.org)
3 / 3
