MHIC NASCLA CONTRACTORS EXAM REVIEW QUESTIONS WITH COMPLETE SOLUTIONS., Exams of Construction

Download MHIC NASCLA CONTRACTORS EXAM REVIEW QUESTIONS WITH COMPLETE SOLUTIONS. and more Exams Construction in PDF only on Docsity! MHIC NASCLA CONTRACTORS EXAM REVIEW QUESTIONS WITH COMPLETE SOLUTIONS Does home improvement include work done on an individual condominium unit? - ANSWER -Yes Does home improvement include work done on a swimming pool? - ANSWER -Yes Does a home improvement contract HAVE to be in writing in order to preserve your lien rights? - ANSWER -Yes Contractors who can only contract with a contractor or a subcontractor are: - ANSWER -Subcontractors A county or municipality in Maryland _____________ require a contractor to get authorization from an official in that city to be able to contract in that municipality. - ANSWER -Cannot A county or municipality in Maryland _______________ regulate the character, performance and quality of home improvement. - ANSWER -Can How many members are there in the Maryland Home Improvement Commission? - ANSWER -7 Of the 7 members on the Commission, how many are experienced in home improvement? - ANSWER -3 What is the term of a member on the Commission? Associated Answers - ANSWER -4 Years How long must a person be a citizen and member of Maryland before they can be appointed to the Commission? - ANSWER -5 years It is illegal for a member of the Commission to receive any compensation from a person regulated by the Commission. - ANSWER -True How often does the Commission hold meetings at a minimum? - ANSWER -12 times a year The _______________ is a full time employee of the State. - ANSWER -Executive Director People hired to investigate complaints about home improvement projects work under: - ANSWER -the Director of the Commission If the Commission decides to sue a contractor because they believe that the contractor has or will cause harm to another person, they can sue for: - ANSWER -1. injunctive relief against the conduct 2. an order for satisfactory completion 3. restitution Can the Commission request financial records at any time? - ANSWER -yes Must a contractor, sub-contractor, or salesperson who places their license on inactive status pay a fee to renew an inactive license? - ANSWER -yes Can the Commission take disciplinary action against an inactive license? - ANSWER -yes How many days does a licensee have to notify the Commission of change in control in ownership, management, address or trade name? - ANSWER -10 days How many contractors may a salesperson represent? - ANSWER -2 The following are exempt from licensure requirements: Associated Answers 1 employees for labor services Licensed Home Improvement Contractors are also required to hold a construction license issued by the Clerk of the Court under Title 17. - ANSWER -False Home owners have a right to bring a claim against the Guaranty Fund for situations of _________________________ concerning restoration, repair, replacement or completion that arise from unworkmanlike, inadequate, or incomplete home improvement. - ANSWER -actual loss What is the fee a Home Improvement Contractor must pay into the Guaranty Fund before the Commission will issue a license? - ANSWER -$100 What is the maximum amount of money the Commission will award to any one claimant from the Guaranty Fund? - ANSWER -$20,000.00 What is the maximum amount of money the Commission will pay out of the fund concerning the affairs of any one contractor? - ANSWER -$100,000.00 Can a person bring a claim against the Guaranty Fund in a contract he has with the employer of his son? - ANSWER -No How long does a claimant have to bring a claim against the Guaranty Fund? - ANSWER -3 years from discovery of the loss or damage How many days does a contractor have to respond in writing to the copy of a claim that was sent by the Commission? - ANSWER -10 days Can a disciplinary hearing and a hearing concerning a claim against the Guaranty Fund be held at the same time if the facts in this situation are the same? - ANSWER -Yes If within ____________ after the Commission gives notice, a contractor on whose account a claim was paid does not reimburse the fund in full, the Commission may sue the contractor for reimbursement. - ANSWER -30 days In addition to full reimbursement of the fund, a contractor is responsible to pay at least ___________ interest on the amount to reimburse. - ANSWER -10 percent The state can record a lien against any real property owned by the contractor for a debt owed to the fund. - ANSWER -True If the Commission pays a claim from the Fund based on the actions or omissions of a contractor, the Commission may suspend the contractor's license until full reimbursement of the Fund plus at least 10% interest. - ANSWER -True A home improvement contract in compliance with the home improvement laws would include all of the following except: - ANSWER -Names and license numbers of subcontractors A salesperson may not represent 2 contractors at the same time for the same project. - ANSWER -True Can a salesperson legally accept money for themselves from the customer? - ANSWER -No It is against the law for building and permits departments to issue a permit to a contractor without the contractor's license number. - ANSWER -True If a contractor fails to correct a violation of the building code within a reasonable time period, the county or municipality inspecting the project shall notify the Commission. - ANSWER -True What is the maximum fine for contracting without a license - first offense? - ANSWER -$1,000 and/or 6 months in jail or both What is the maximum fine for contracting without a license - second offense? - ANSWER -$5,000 and/or 2 years in jail or both Contractor, Jack Smith, is not getting along with Hector Jones, his customer. If he decides not to complete the contract, has Jack broken any law? - ANSWER -Yes Can a contractor decide to use a material other than specified in the contract documents without getting permission from the owner? - ANSWER -No Contractors may not: 1 misrepresent their service or product 2 make false promises 3 lie on their license application 4 all of the above - ANSWER -All of the above Contractor, Jack Brown, makes a deal with customer, Ameal Cougar, to provide an estimate of $40,000 on a project where the actual costs are $30,000, allowing Ameal to pocket $10,000 after securing a mortgage at $40,000 and paying off Jack. This is: 1 fraud 2 an illegal act 3 a misdemeanor 4 all of the above - ANSWER -All of the above A licensed salesperson can only sell the services of licensed contractor or subcontractors. - ANSWER - True If a contractor's salesperson stops selling or working with the contractor for any reason, the contractor has a responsibility to the State to inform the Commission. - ANSWER -True All advertising has to provide the identifier "Maryland Home Improvement Commission License No ______________" or "MHIC#__________". - ANSWER -True What is the maximum penalty the Commission may impose upon a contractor, licensed or unlicensed, per violation of these laws: - ANSWER -$5,000 Estimate Planning - ANSWER -In order for a contractor to present a proposal to a customer, they first have to create a cost estimate of the entire project. Review the project documents (drawings, specifications, contracts and bonds). Attend all pre-bid meetings. Determine costs of labor, materials, equipment and subcontractors. Consider the degree of difficulty the job poses, the overhead involved, and the profit expected. Conduct a site visit! The Quantity Take-off Method involves - ANSWER -counting the number of items associated with a particular construction project, determining the associated materials and labor costs, and formulating a bid (or estimate) as part of the bidding process. Quantity take-off is also applied to the pricing process. First determine labor costs (by considering historical information) and burden (employment taxes and insurance). Figure out materials, allowances and contingencies, and how they will impact the outcome of the project. Include the direct costs of rented or leased equipment. Also consider: * Subcontractors if needed * Project overhead * Company overhead * Add markup for profit being careful to keep your bid competitive Labor Costs - ANSWER -The cost of labor will vary from job to job. Historical information will help you arrive at an accurate estimate. Labor Burden. - ANSWER -Labor burden refers to the "indirect" administrative costs of employing laborers. The cost of employment taxes and insurance (Medicare, Social Security, unemployment insurance, workers' compensation, liability insurance etc.) must be considered. Indirect labor costs can range from 25 to 70 percent of the base wage rate, and once that percentage is determined, it should be added to the direct labor costs to come up with a single hourly or "shop" rate. Materials - ANSWER -The costs of materials can fluctuate, and it is important to be current in your estimate of material costs. Be sure to get several bids from each supplier. Add contingency costs for waste. Equipment Cost. - ANSWER -Large equipment required to complete a project, for example a loader needed for moving stockpiled dirt for removal, is considered a direct cost. These costs will differ depending on whether or not you own or rent the equipment. If you own, calculate the unit cost of the equipment by determining the actual value (depreciation from original price), operation and maintenance costs, taxes and fees, labor and insurance. If the equipment is rented, factor in the rental rate, delivery fees, labor, fuel etc. Finally, the option of subcontracting the work is available, and this cost would appear under subcontractor fees. Contingencies - ANSWER -Contingencies are added to allow for unanticipated problems. Adding contingency costs to the estimate from the start allows more flexibility to absorb these additional expenses without going over budget. Project Overhead - ANSWER -These are costs (soft costs) that are associated with the project, but are not labor and materials. Examples of project overhead are: utilities, temporary storage and office costs, security, dumpsters and sanitation. Determine project overhead by adding all your project costs from the previous year, and then divide that number by your revenues to arrive at your overhead percentage. Annual Company Overhead - ANSWER -This is the cost of running the business itself. Permanent office costs, taxes, telephones, legal/accounting fees, and administration costs are all considered company overhead. Company overhead is calculated by a percentage of annual gross revenue. Annual company overhead, divided by annual gross revenues, provides the percentage amount to add to each bid to cover company overhead. So, for example, if your company overhead is 2%, you know to add that amount to every bid. When interviewing a person for employment, is it legal to ask them about their mental health history? - ANSWER -No Employers are required to report a new employee or rehired employee to the State Directory of New Hires. - ANSWER -True What Federal form are employers required to complete within 3 days of their hire for the U.S. Customs and Immigrations Service? - ANSWER -I-9 What Federal law provides employers with their minimum wage and overtime requirements? - ANSWER -Fair Labor Standard Act Do employers have to pay overtime pay to employee who works on a holiday? - ANSWER -No The Wage Garnishment Law prohibits an employer from firing an employee whose pay is garnished for payment of a single debt. - ANSWER -True What is the purpose of New Hire Reporting? 1 to collect taxes 2 to detect benefits fraud 3 to enforce child support orders 4 both b and c - ANSWER -to detect benefits fraud and to enforce child support orders both b and c Employers in Maryland are required to report their payroll and pay unemployment insurance taxes on their Quarterly Contribution Report - ANSWER -True How many employees must an employer have before they are required to purchase Workers Compensation Insurance? - ANSWER -1 What benefit is provided to an injured employee if needed? 1 Wage replacement and payment for loss or permanent damage to body parts 2 Rehabilitation costs 3 Current and future medical costs 4 All of the above - ANSWER -all of the above are benefits provided to an injured employee if needed If, due to an injury that occurred at work, an employee is unable to return to work after three work days, how long does the employer have to report this accident to the Workers Compensation Commission? - ANSWER -10 days What is the penalty for not providing Workers Compensation Insurance to your employee(s)? - ANSWER -Up to $5000 fine, imprisoned for one year, or both treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." Wage Garnishment Law. - ANSWER -This law limits the amount of income that may be legally withheld from an employees income There are 4 components to Workers' Compensation: - ANSWER -1.Medical Expenses 2. Disability Pay 3. Vocational Rehabilitation 4. Benefits to dependents Employers should submit a Combined Registration Form - ANSWER -no later than 20 days after the first day of business. Required Postings. - ANSWER --Wage and Hour Fact Sheet -Equal Pay for Equal Work -Employment of Minors -Unemployment Insurance and Benefits -Unemployment Insurance Coverage -Workers' Compensation Commission Notice C-24 -Employment Discrimination is Illegal -Occupational Safety and Health Law (MOSH) Federal postings that may apply to you: - ANSWER --Safety and Health Protection on the Job -Equal Opportunity is the Law -Employee Rights for Workers with Disabilities -Your Rights under the Family Leave and Medical Leave Act -FLSA Minimum Wage Poster How long does a claimant have to bring a claim against the guaranty fund? - ANSWER -3 years from discovery of the loss or damage How many days does a contractor have to respond in writing to the copy of claim that was sent by the commission? - ANSWER -10 days If within ________ after the commission gives notice , a contractor on whose amount a claim was paid does not reimburse the fund in full, the commission may sue the contractor for reimbursement. - ANSWER -60 days In addtion to full reimbursement of the fund, a contractor is responsible to pay at least _________interest on the amount to reimburse. - ANSWER -10 % The state can record a lien against any real property owners by the contractor for a debt owed to the fund. - ANSWER -True If the commission pays a claim from the fund base on the actions or omissions of a contractor, the commission may suspend the contractors license until full reimbursement of the fund plus at least 10%interest - ANSWER -True A home improvement contract in compliance with the home improvement laws would include all of the following except - ANSWER -Names and license numbers of subcontractors A salesperson may not represent 2 contractors at the same time for the same project. - ANSWER -True Can a sales person legally accept money for themselves from the customer - ANSWER -No It is against the law for building and permits departments to issue a permit to contractor without the contractors license number. - ANSWER -True If a contractor fails to correct violation of the building code within reasonable time period, the county or municipality inspecting the project shall notify the commission - ANSWER -True What is the maximum fine for contracting without a license-second offense - ANSWER -$5,000 and/or 2 years in jail or both Contractor, jack smith, is not getting along with hector jones , his customer. If he decides not to complete the contract, has jack broken any laws? - ANSWER -Yes Can a contractor decide to use material other than specified in the contract documents without getting permission from the owner? - ANSWER -No Contractors may not : - ANSWER -Lie on their license application Make false promises Misrepresent their service or product Contractor, jack brown, makes a deal with customer, ameal cougar , to provide an estimate of $40,000 on project where the actual cost are $30,000,allowing ameal to pocket $10,000 after securing a mortgage at $40,000 and paying off jack this is : - ANSWER -Fraud An illegal act A misdemeanor All of the about If a contractor sells personstoos selling or working with the contractor for any reason, the contractor has a responsibility to the state to inform the commission? - ANSWER -True All advertising has to provide the identifier "Maryland home improvement commission license no___________"or "MHIC - ANSWER -True What is the maximum penalty the commission may impose upon a contractor, licensed or unlicensed , per violation of these laws - ANSWER -$5,000 Advertising must be done in a way as to avoid misrepresentating the product, service or Terms of sale so as not to deceive the customer. - ANSWER -True