MICHIGAN BUILDERS LICENSE FINAL EXAM/PRACTICE EXAM 400+ QUESTIONS AND
ANSWERS 2025-2026|WELL STRUCTURED|100% PASS|
QUESTIONS ANSWERS
Not less than $5,000 and not more than $25,000 and/or one year
What is the first offense penalty for engaging in the practice of
in prison. Subsequent violations can extend the prison time to up
residential building without a license?
to 2 years.
What is the penalty for engaging in the practice of residential Not less than $5,000 and not more than $25,000 and/or four years
builders license, resulting in a death? in prison
On your individual builder's license application, what should you
Your personal address
write as your "business address"?
What is the cost for the individual builder's license? $195
After receiving your residential builder's license, what are the only
Plumbing, electrical, and HVAC
trades not covered by your license?
Who is the TESTING company for the State of Michigan? PSI
What is the name of the department that regulates your license? LARA
What are the 2 parts of the Residential Builder Examination? Business and Law examination/Practice and Trade examination
What is a good quick asset ratio? 1 to 1
Under the Carpentry section of the test, what does a "span table" What species and what grade of lumber a floor joist has to be to
tell us? 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 work on commercial properties
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
Where does most fraud occur? In the residential market
Both rules by the director and board as well as laws of the state
As a builder, your license falls under the regulation of:
of Michigan
4 residential builders, 2 M + A contractors, and 3 members of the
What is the make up of the 9 members of the board?
general public
Under the definition of occupational code, what does the word A condition, stricture, restraint or probation attached to a license
"limitation" refer to? relative to the scope of practice
Who, upon completion of a hearing, shall assess a penalty or
The Board
penalties?
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 60 days
proper payment and late fee?
When the department is investigating a complaint and finds ev-
idence of a violation, what actions can be brought against the A cease and desist order, a formal complaint, and/or a citation
respondent?
How many days after the administrative law hearings examiner
hears the report, must a determination of penalties be made by 60 days
the board?
A meeting where ONLY the respondent meets with the department
What is a compliance conference?
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
Residential structure
to the premises used or intended to be used as an adjunct of
residential occupancy?
An employee other than the listed salesperson may make a sale It is occasional and incidental to the person's principal employ-
when: ment
- They are an authorized representative of the United States
The following are reasons that someone would be allowed to government
operate without a residential business license: - 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 depart-
ment shall issue the license of a residential builder and residential
3 years
maintenance and alteration contractor for a period of how many
years in duration?
After receiving your initial residential builder's license, how many
hours of continuing competency are required within the next 3 21 hours
years?
The license shall be forwarded to the department, an application
If a salesperson desires to change employment from one residen-
will be made for a transfer, and a new license under the salesper-
tial builder or maintenance and alteration contractor to another:
son's new employer will be issued
Regarding workmanship, how long does a client have to file a
18 months from the completion of work
"verified complaint"?
If a licensed residential builder or licensed residential mainte-
nance and alteration contractor wishes to change the control or
10 days
direction of the business, how long do they have to report that
change to the department?
The department shall conduct a review upon notice that a licensee The department may suspend or revoke that person's license and
has violated the asbestos abatement contractors licensing act.
fines may be issued
What are the possible consequences for for this violation?
- 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
When the board issues the findings of a verified complaint:
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 The residence address of all individuals, partners, officers and/or
-
members, as requested by the department
shall include:
- 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 10 days
days of the date of suspension or revocation?
- The name on the license
According to Administrative rules, a licensee shall include the
- The license number
following in all advertising:
- The actual business address as shown on the license
According to purchase and sale agreements, the builder or con- - Specifications and cost
tractor shall make certain that the written agreements clearly state - The type and quality of materials
the terms of the transaction, including: - 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
Investigative conference
there is cause for complaint which would require a hearing on, or
dismissal of, the complaint.
A respondent in a complaint may be represented by: 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 busi-
State License Fee Act
nesses; to create certain funds; and to prescribe certain powers
and duties of certain state agencies and departments?
An act to encourage and contribute to the rehabilitation of former
What is the "Occupational License For Former Offenders Act"? offenders and to assist them in the assumption of the responsibil-
ities of citizenship
When a contractor, or any subcontractor, appropriates moneys to
According to the "Building Contract Fund", evidence of "intent to his/her self for building operations BEFORE the payment by him
defraud" is defined as: 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 Notice of commencement
days of being asked for a copy by anyone entitled to a copy?
The "Claim of Lien" must be filed within how many days of LAST
90 days
furnishing labor or materials for a project?
Proceedings to foreclose must take place within of the date
1 year
that the claim lien was recorded.
- Never use your assets to complete someone's project
- Get sufficient down payments and/or obtain sufficient progress
According to the Construction Lien Act, what recommendations
payments as the job progresses
are given for your protection?
- Have well defined contracts which include rights and responsi-
bilities 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
The sworn statement
(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?
A claim of lien MUST be completed within how many days of last
90 days
being on the job site?
If after filing a claim of lien, you DO get paid before the lawsuit,
Discharge of construction lien
what form must you complete?
What is the maximum amount you can collect through a judgment
in the small claims division of the district court using the small $6,000
claims form DC84?
After Mr. Jones receives a sworn statement that he owes ABC
framing $40,000, how does Mr. Jones know that ABC framing was The proof of service of notice of furnishing
ever on the jobsite?
According to the State Construction Code Act, how often will the
Every 3 years
state code be updated by the Construction Code Commission?
The Uniform Commercial Code states that a contract for the sale
In writing sufficient to indicate a sale between parties and signed
of goods for the price of $1,000.00 or more must be:
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 Employees are allowed to require a medical exam before making
a job offer a job offer
The first violation results in a $55,000 fine
ADA requirements are enforceable only through the U.S. Depart-
ment of Justice
- After 40 hours in any one work week, compensation is 1 1/2 times
the regular rate
Minimum Wage Law states:
- 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 Stan-
Ages 14, 15, 16, and 17
dards Act?
- Employees may receive unpaid leave for certain reasons
- Employees may receive up to 12 weeks of leave in a 12 month
The Family Medical Leave Act states: period
- This law pertains to employers with 50 or more employees
engaged in commerce or affecting commerce
- A minor shall not work more than 6 days a week
Which of the following is true in regard to employing minors?
- Every 5 hours of work requires a 30 minute break
What is a disadvantage of a sole proprietorship? Owner is liable for all debts
What is a disadvantage of a general partnership? Each partner is liable for the business debts of the other partner
ANSWERS 2025-2026|WELL STRUCTURED|100% PASS|
QUESTIONS ANSWERS
Not less than $5,000 and not more than $25,000 and/or one year
What is the first offense penalty for engaging in the practice of
in prison. Subsequent violations can extend the prison time to up
residential building without a license?
to 2 years.
What is the penalty for engaging in the practice of residential Not less than $5,000 and not more than $25,000 and/or four years
builders license, resulting in a death? in prison
On your individual builder's license application, what should you
Your personal address
write as your "business address"?
What is the cost for the individual builder's license? $195
After receiving your residential builder's license, what are the only
Plumbing, electrical, and HVAC
trades not covered by your license?
Who is the TESTING company for the State of Michigan? PSI
What is the name of the department that regulates your license? LARA
What are the 2 parts of the Residential Builder Examination? Business and Law examination/Practice and Trade examination
What is a good quick asset ratio? 1 to 1
Under the Carpentry section of the test, what does a "span table" What species and what grade of lumber a floor joist has to be to
tell us? 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 work on commercial properties
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
Where does most fraud occur? In the residential market
Both rules by the director and board as well as laws of the state
As a builder, your license falls under the regulation of:
of Michigan
4 residential builders, 2 M + A contractors, and 3 members of the
What is the make up of the 9 members of the board?
general public
Under the definition of occupational code, what does the word A condition, stricture, restraint or probation attached to a license
"limitation" refer to? relative to the scope of practice
Who, upon completion of a hearing, shall assess a penalty or
The Board
penalties?
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 60 days
proper payment and late fee?
When the department is investigating a complaint and finds ev-
idence of a violation, what actions can be brought against the A cease and desist order, a formal complaint, and/or a citation
respondent?
How many days after the administrative law hearings examiner
hears the report, must a determination of penalties be made by 60 days
the board?
A meeting where ONLY the respondent meets with the department
What is a compliance conference?
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
Residential structure
to the premises used or intended to be used as an adjunct of
residential occupancy?
An employee other than the listed salesperson may make a sale It is occasional and incidental to the person's principal employ-
when: ment
- They are an authorized representative of the United States
The following are reasons that someone would be allowed to government
operate without a residential business license: - 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 depart-
ment shall issue the license of a residential builder and residential
3 years
maintenance and alteration contractor for a period of how many
years in duration?
After receiving your initial residential builder's license, how many
hours of continuing competency are required within the next 3 21 hours
years?
The license shall be forwarded to the department, an application
If a salesperson desires to change employment from one residen-
will be made for a transfer, and a new license under the salesper-
tial builder or maintenance and alteration contractor to another:
son's new employer will be issued
Regarding workmanship, how long does a client have to file a
18 months from the completion of work
"verified complaint"?
If a licensed residential builder or licensed residential mainte-
nance and alteration contractor wishes to change the control or
10 days
direction of the business, how long do they have to report that
change to the department?
The department shall conduct a review upon notice that a licensee The department may suspend or revoke that person's license and
has violated the asbestos abatement contractors licensing act.
fines may be issued
What are the possible consequences for for this violation?
- 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
When the board issues the findings of a verified complaint:
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 The residence address of all individuals, partners, officers and/or
-
members, as requested by the department
shall include:
- 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 10 days
days of the date of suspension or revocation?
- The name on the license
According to Administrative rules, a licensee shall include the
- The license number
following in all advertising:
- The actual business address as shown on the license
According to purchase and sale agreements, the builder or con- - Specifications and cost
tractor shall make certain that the written agreements clearly state - The type and quality of materials
the terms of the transaction, including: - 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
Investigative conference
there is cause for complaint which would require a hearing on, or
dismissal of, the complaint.
A respondent in a complaint may be represented by: 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 busi-
State License Fee Act
nesses; to create certain funds; and to prescribe certain powers
and duties of certain state agencies and departments?
An act to encourage and contribute to the rehabilitation of former
What is the "Occupational License For Former Offenders Act"? offenders and to assist them in the assumption of the responsibil-
ities of citizenship
When a contractor, or any subcontractor, appropriates moneys to
According to the "Building Contract Fund", evidence of "intent to his/her self for building operations BEFORE the payment by him
defraud" is defined as: 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 Notice of commencement
days of being asked for a copy by anyone entitled to a copy?
The "Claim of Lien" must be filed within how many days of LAST
90 days
furnishing labor or materials for a project?
Proceedings to foreclose must take place within of the date
1 year
that the claim lien was recorded.
- Never use your assets to complete someone's project
- Get sufficient down payments and/or obtain sufficient progress
According to the Construction Lien Act, what recommendations
payments as the job progresses
are given for your protection?
- Have well defined contracts which include rights and responsi-
bilities 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
The sworn statement
(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?
A claim of lien MUST be completed within how many days of last
90 days
being on the job site?
If after filing a claim of lien, you DO get paid before the lawsuit,
Discharge of construction lien
what form must you complete?
What is the maximum amount you can collect through a judgment
in the small claims division of the district court using the small $6,000
claims form DC84?
After Mr. Jones receives a sworn statement that he owes ABC
framing $40,000, how does Mr. Jones know that ABC framing was The proof of service of notice of furnishing
ever on the jobsite?
According to the State Construction Code Act, how often will the
Every 3 years
state code be updated by the Construction Code Commission?
The Uniform Commercial Code states that a contract for the sale
In writing sufficient to indicate a sale between parties and signed
of goods for the price of $1,000.00 or more must be:
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 Employees are allowed to require a medical exam before making
a job offer a job offer
The first violation results in a $55,000 fine
ADA requirements are enforceable only through the U.S. Depart-
ment of Justice
- After 40 hours in any one work week, compensation is 1 1/2 times
the regular rate
Minimum Wage Law states:
- 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 Stan-
Ages 14, 15, 16, and 17
dards Act?
- Employees may receive unpaid leave for certain reasons
- Employees may receive up to 12 weeks of leave in a 12 month
The Family Medical Leave Act states: period
- This law pertains to employers with 50 or more employees
engaged in commerce or affecting commerce
- A minor shall not work more than 6 days a week
Which of the following is true in regard to employing minors?
- Every 5 hours of work requires a 30 minute break
What is a disadvantage of a sole proprietorship? Owner is liable for all debts
What is a disadvantage of a general partnership? Each partner is liable for the business debts of the other partner
