Under Michigan Act 299, what is the minimum net worth requirement for a residential builder license?
Correct Answer
D) $50,000
Michigan Act 299 requires residential builders to maintain a minimum net worth of $50,000 as demonstrated through financial statements.
Why This Is the Correct Answer
Option D ($50,000) is correct. Michigan Act 299 (the Occupational Code) specifically requires residential builders to demonstrate a minimum net worth of $50,000 through financial statements submitted with the license application.
Why the Other Options Are Wrong
Option A: $100,000
Option A ($100,000) is double the actual requirement. This figure may be confused with bonding amounts or insurance limits in other trades, but it is not the statutory net worth threshold for residential builders under Act 299.
Option B: $75,000
Option B ($75,000) is not a threshold established by Act 299 for residential builders. It may seem like a compromise figure, but the law sets a clear $50,000 minimum.
Option C: $25,000
Option C ($25,000) is half the required amount. Students sometimes confuse this with the net worth requirement for a residential maintenance and alteration contractor (a lower-tier license), but the residential builder license requires $50,000.
Memory Technique
Associate 'builder' with '50' — a builder constructs things in halves: half of $100,000 = $50,000. Or simply memorize: '50K to build in Michigan.'
More Michigan Questions
A Michigan contractor forms an S-Corporation. What is the maximum number of shareholders allowed?
A contractor's employee is injured on a job site in Michigan. The contractor's workers' compensation insurance has a $500 deductible per claim. The total medical costs are $12,500 and lost wages are $3,200. What is the contractor's out-of-pocket cost for this claim?
What is the minimum general liability insurance coverage amount required for Michigan residential builders?
Under Michigan Act 299, what is the consequence for a contractor who performs work outside the scope of their license classification?
A contractor discovers that a subcontractor has filed a construction lien against their project. The general contractor believes the lien is invalid. What is the primary legal mechanism to challenge the lien in Michigan?
Under Michigan Act 299, what happens if a contractor continues to work without a valid license after it expires?
Which of the following best describes the 'pay when paid' clause limitation under Michigan law?
A project has total costs of $180,000 including $75,000 labor and $105,000 materials. With workers compensation at 7.8% of labor costs and general liability at 0.4% of total costs, what are the combined insurance costs?
A Michigan contractor is forming an LLC. What is the minimum general liability insurance coverage required for residential builders under Michigan law?
Under Michigan Act 299, a contractor's license must be renewed every:
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass