2025 MICHIGAN BUILDERS LICENSE EXAM. ACTUAL
QUESTIONS WITH ACCURATE SOLUTIONS.
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 builder’s license, resulting in a death? -
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 makeup 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? - 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 this violation?
- The department may suspend or revoke that person's license and fines may be issued
, 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 this violation?
- 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? - 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: - - 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
QUESTIONS WITH ACCURATE SOLUTIONS.
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 builder’s license, resulting in a death? -
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 makeup 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? - 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 this violation?
- The department may suspend or revoke that person's license and fines may be issued
, 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 this violation?
- 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? - 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: - - 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
