Residential Construction Licensing and Regulations, Exams of Advanced Education

Download Residential Construction Licensing and Regulations and more Exams Advanced Education in PDF only on Docsity! Michigan Residential Builder Licensing Exam With 100% Correct Answers 2023 M&A contractors include: - Correct Answer-A = Carpentry B = Concrete D = Excavation G = Insulation Work I = Masonry J = Painting & Decorating K = Siding M = Roofing If more than one office is used for work, the branch office must be __________ - Correct Answer-Licensed The one who obtains the residential builder's license is called a _____________ ____________ - Correct Answer-Qualifying Officer First Offense for practicing without a license - Correct Answer-Misdemeanor fine of $5,000 - $25,000 or prison for not more than 1 year, or both. Second offense for practicing without a license - Correct Answer-Misdemeanor fine of $5,000 - $25,000 or prison for not more than 2 years, or both. Death or serious injury - Correct Answer-Felony fine of $5,000 - $25,000 or prison for not more than 4 years, or both. Define a Residential Builder - Correct Answer-A person or entity who is involved in the construction of a residential structure or a combination residential and commercial structure. Define M&A contractor - Correct Answer-Person who for a fixed sum/price other than wages for personal labor for the repair, alteration, or addition/improvement to residential/commercial or residential structure. Salesperson - Correct Answer-employee of agent other than a qualifying officer who sells business for the contractor. who reissues licenses for salespeople? - Correct Answer-LARA (The Department) Which types of trade work require a different type of license other than the resi license? - Correct Answer-Plumbing, Electrical, and Mechanical. Who issues the license? - Correct Answer-LARA How is the director of LARA appointed? - Correct Answer-by the governor What types of people make up the Board of Residential Builders? - Correct Answer-4 Licensed residential builders 2 M&A contractors 3 members of the public What are the duties of the board of residential builders? (4) - Correct Answer-1. Interpretation of a license requirement 2. Aid in investigations 3. Set acceptable practice standards 4. Assess penalties for those who are licensed and are in violation of rules What happens if the qualifying officer's license is revoked? - Correct Answer-The entity's license is revoked as well. How can a foreign entity get a license? - Correct Answer-Only if authorized by the Corporations and Securities Commission. Non residents must file this to be considered for a license. - Correct Answer-An Irrevocable consent to service of process T or F, Builders must maintain a place of business in the state they operate in. - Correct Answer-True T of F, Contractors must maintain an accurate set of books/records open to inspection by the department (LARA). - Correct Answer-True If the department inquires, licensees must submit ___________ _____________ ___________ showing licensee's current financial status, and must do so within 30 days of inquiry. - Correct Answer-sworn financial statements T or F, Advertising must not misrepresent material facts. - Correct Answer-True Licensee shall include ____________, _______________, and ________________ in all advertising - Correct Answer-name, license number, and actual business address Is it legal to pay money or give gifts to customers in exchange for the use of their home as a model for potential clients? - Correct Answer-No. a portion of each builder license fee is put into a _________ _____________ ___________, used by the attorney general to investigate unlicensed activities - Correct Answer-Builder Enforcement Fund unlicensed builders cannot impose a _______ on properties - Correct Answer-lien What is a building contract fund? - Correct Answer-money paid to a contractor/subcontractor should be considered to be a "trust fund" for the benefit of the person making the payment. The contractor who is paid is considered the trustee. funds paid to the contractor shall first be applied to pay _____________, ____________, and ____________. A licensee who fails to apply the funds to the appropriate individuals shall be guilty of a ________ - Correct Answer-laborers, subcontractors, material men. felony. The appropriation of a contractor of any monies paid to him for building operations before the payment by him of all monies due to ____________, _____________, or _______________ shall be evidence of ______________ to __________________. - Correct Answer-laborers, subcontractors, material men, intent, defraud. Define legal description - Correct Answer-A description of real property that gives the exact location anywhere in the world. give the dimensions of an acre in square feet as well as the _____ x _____ dimensions in ft - Correct Answer-1 Acre = 43,560 Sq ft 1 Acre = 208 ft by 208 ft property is described through a series of ____________ and ______________ ______________ - Correct Answer-distances, angular measurements. The description of a property always begins at a point called _____________ of _______________ (P.O.B) - Correct Answer-Point of beginning surveyors use a ________ which is any physical evidence of a boundary line - Correct Answer-monument define a percolation test - Correct Answer-Performed to measure how well land absorbs water in order to determine the design of a septic system. Define easement - Correct Answer-A right to use a part or all of property. May consist of the right to install and maintain sewers, electric and telephone lines, or the right of passage Define condominium ownership - Correct Answer-A system of ownership reflecting in owning 1 unit in a multi-unit structure, combined with the ownership of common elements. Define common elements in condo ownership - Correct Answer-Common elements would include portions of the multi-unit structure owned by unit owners together HOA bylaws and fees, what are they and what is the builder's role with them? - Correct Answer-Provides for regulations aimed at preserving and maintaining property values and neighborhood relations. This includes a fee to be paid by the homeowner. The builder's job regarding this is to make a purchaser aware of binding bylaws as well as inform the purchaser of the association fee. Define ownership by syndication - Correct Answer-A group of investors join funds in a pool to purchase property and operate as partners. (Think of a syndicate as a group) Define general partnership - Correct Answer-All members share equally in profits and losses as well as liabilities and management decisions. What is an LLC (Limited Liability Company)? - Correct Answer-Hybrid entity that combines the limited liability of a corporation and the tax advantages of a partnership; entity of choice for businesses Limited partnership - Correct Answer-all members except the general partners are only investors and have no decision making power. Limited partners share profits but can only lose their investment. (No personal liability.) the "C" corporation - Correct Answer-What remains after taxes can be used to pay dividends to the stockholders, who, in turn, pay personal income tax on their dividend income. Negative factor in "C" corporations - Correct Answer-double taxation of income for stockholders positive factor in "C" corporations - Correct Answer-Entity aspect shields investors from unlimited liability. "S" corporation - Correct Answer-Provides limited liability, but taxed like a partnership. (no double taxation). Direct profit and loss pass through investors. define planning - Correct Answer-An act of local governments aimed at controlling the growth of local community. many factors are considered such as the density of the population, need for housing, recreation, commercial, retail establishments, etc. define zoning - Correct Answer-The act of local governments to determine the use of certain properties such as RESIDENTIAL, COMMERCIAL, INDUSTRIAL, AND AGRICULTURAL. Zoning can also control the size of improvements made, architectural layout, building height, etc. Zoning Ordinance - Correct Answer-exercise of police power by a municipality to regulate and control the character and use of property Buffer zone - Correct Answer-Used to separate two different use districts. An example would be a park between land zoned for industrial use and land zoned for residential use. Non-conforming use - Correct Answer-The use of the land that does not match the zoning law. Grandfather clause - Correct Answer-provision in the law that allows the continuation of a non-conforming use when such use had preceded a zoning change. zoning variance - Correct Answer-Allows the introduction (by a government) of a non- conforming use. Setback - Correct Answer-The minimum distance from the lot line where a building can be erected. Civil rights act of 1968, TITLE 8 - Correct Answer-Prohibits discrimination because of race, color, religion, or national origin. Housing and Community Development Act of 1974 - Correct Answer-prohibits discrimination based on sex; requires use of an equal housing opportunity poster The Michigan Civil Rights Act "Elliot Larsen" - Correct Answer-Prohibits against discrimination because of age and marital status and with regards to employment height and weight. It was amended in 1992 to include "familial status" Define contract - Correct Answer-A binding legal agreement between 2 or more parties who agree to conduct business. Define Purchase Agreement - Correct Answer-AKA the "buy-sell" agreement or the "sales contract". An agreement between the seller and buyer of property used to set the price and terms of sale. Amendment - Correct Answer-addition or alteration to a document Statute of Frauds - Correct Answer-requires certain contracts to be in writing and parties to be bound by their terms. Statute of Limitations - Correct Answer-a law that restricts the period of time within which an action may be brought to court 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. - Correct Answer-1, 35, 13, 3 A buyer has the right to cancel a home solicitation sale until _________ of the ___________ business day. - Correct Answer-midnight, third Notice of commencement - Correct Answer-Announces that work is about to begin on a home building or remodeling project. What does a notice of commencement contain? (3) - Correct Answer-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 notice of commencement indicate? (3) - Correct Answer-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 commencement? - Correct Answer-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 What does a sub, laborer, or supplier do with a notice of commencement? (3) - Correct Answer-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 to determine how to file a claim of lien Notice of Furnishing - Correct Answer-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? - Correct Answer-subcontractors, suppliers, or laborers What must be included in a notice of furnishing? (3) - Correct Answer-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, subcontractors, suppliers, and laborers. When should a notice of furnishing be sent? - Correct Answer-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 - Correct Answer-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? - Correct Answer-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? - Correct Answer-tells who is owed money, in what amounts, and for what supplies or work done. Why is a sworn statement important? (homeowners and suppliers/subs/laborers) - Correct Answer-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) - Correct Answer-Yes Does the law require a sworn statement be prepared by the sub or supplier whenever payment is requested? (Y or N) - Correct Answer-Yes What is a construction waiver and what does it do? - Correct Answer-given by contractor, sub, supplier, or laborer whenever payment is made. It relinquishes the rights of the contractor to file a lien on the property. They must be specific. Full unconditional waiver - Correct Answer-States that full payment was received and there is no claim/lien on the homeowner's property full conditional waiver - Correct Answer-States that as soon as full payment is received, there will be no claim of lien against the homeowner's property. partial unconditional waiver - Correct Answer-A "receipt" for partial payment. no claim can be made for the amount already paid. partial conditional waiver - Correct Answer-a "receipt" for partial payment which may still have a condition pending. In a partial waiver, the lien right still exists for any _________ _________ owed to the contractor. - Correct Answer-unpaid debts Claim of Lien - Correct Answer-any group not paid must record a claim of lien with the register of county deeds office within 90 days after furnishing last labor or material for the job. any group not paid must record a claim of lien with the register of county deeds office within ______ days after furnishing last labor or material for the job. - Correct Answer- 90 What does a claim of lien contain? (4) - Correct Answer-1. First day labor was commenced or materials were provided 2. Last day labor was completed or materials were provided. 3. Name and address of the party or parties placing the claim 4. name and address of the homeowner or lessee (Obtained from the notice of commencement) Within ______ days of filing the lien, the filee must present the lien to the homeowner - Correct Answer-15 a proof of service of claim of lien must also be prepared in the event that a lien is placed (T or F) - Correct Answer-T Discharge of Lien - Correct Answer-Once a dispute is settled and the contractor is paid, a discharge of lien must be issued by the contractor and recorded. Claim of lien must be filed within _____ days - Correct Answer-90 days Claims of lien are valid for _____ _______. Claims must be presented to a court within that time frame or the lien is lost. - Correct Answer-one year Estimate - Correct Answer-Result of material + labor + overhead + profit. Good estimators have the following 4 qualities: - Correct Answer-1. Understand details required for job 2. Know a variety of construction techniques 3. Detail - oriented 4. possess good management skills Conceptual estimate - Correct Answer-"Ballpark" estimate. done without specific drawings and usually provided when owner isn't sure if the project is economically feasable. Preliminary estimate - Correct Answer-prepared based on preliminary drawings, higher level of accuracy than a conceptual estimate, and shouldn't be used to commit to a contract price.