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Maryland Home Improvement Test NASCLA
Contractors Guide MD 6th Edition Questions and
Answers.
Define home improvement - Correct Answer The addition, alteration, conversion, improvement, modernization, remodeling, repair or replacement of a building or part of a building that is used or was designed to be used as a residence or dwelling place or structure adjacent to that building or an improvement to land adjacent to that building Is a building of a swimming pool, deck, pier or porch included in Home Improvement? - Correct Answer Yes Is work done on apartment complexes of more than 4 units considered home improvement? - Correct Answer No Is work done on individual condominium units considered home improvement? - Correct Answer Yes Is installation in a residence of alarm, awning or fire alarm considered home improvement? - Correct Answer Yes Is now removal or grass cutting home improvement? - Correct Answer No Define contractor - Correct Answer A person who performs or offers or agrees to perform a home improvement for an owner Define Subcontractor - Correct Answer A subcontractor enters into contracts with contractors or other subcontractors to perform
home improvement. A subcontractor is not authorized to enter into agreement directly with the owner Define salesperson - Correct Answer A person who sells a home improvement Define Home Improvement contract - Correct Answer An agrement between a homeowner and a contractor to perform a home improvement. The law requires contracts to be in writing and be signed by the parties to the agreement. Define Owner - Correct Answer Owner, owner's agent , tenant or other person authorized to enter into a home improvement contract Define license - Correct Answer is either a contractor or salesperson license that is issued by the Home Improvement Commission. Does a handyman need a license? - Correct Answer Yes True or False: Home Improvement law does not apply if one of the parties is a government agency - Correct Answer True Work done a residence inside a military base is excluded from licensing requirements - Correct Answer True Can local jurisdictions issue home improvement lincenses - Correct Answer No, only MD Home Improvement Commission is authorized to issue a license to solicit, sell, or perform home improvement services in Maryland Can two or more individuals (such as homeowner and contractor) lawfully agree to ignore the Home Improvement licensing requirement? - Correct Answer No, waiver is prohibited
What do investigators do? - Correct Answer The Commission also employs investigators that review the complaints and Guaranty Fund claims that are received by the Commission. The investigators review complaints against licensed and unlicensed contractors and salespersons. If an investigator determines that a violation may have occurred, what actions can the Commission take? - Correct Answer The Commission may take disciplinary action which may include reprimand, monetary fine or suspension or revocation of the license. True or False: An individual who holds a home improvement license as a contractor is NOT required to obtain a construction license from the Circuit Courts - Correct Answer True How long are exams valid for? - Correct Answer 2 years If a candidate fails the exam, how long must he/she wait before retaking it? - Correct Answer 30 days the first time. After each subsequent failure a candidate must wait 60 days. What is the insurance requirement for contractor? - Correct Answer General Liability at least $50, What is the Home Improvement Guaranty Fund? - Correct Answer One of the Commissions most important function is to administer the Home Improvement Guaranty Fund. The fund compensates homeowners for the actual loss caused by the acts or omissions of a licensed contractor. True or False: Is a homeowner hires an unlicensed contractor he/she is eligible to collect money from the fund? - Correct Answer FALSE - if a homeowner hires an unlicensed contractor, the homeowner will NOT be eligible to collect money from the Fund.
What is Actual Loss? - Correct Answer Actual Loss means the cost to correct or complete a home improvement that is inadequate, unworkmanlike or incomplete. How much can homeowners recover? - Correct Answer Homeowners may recover up to $20,000 per contract, though they are not eligible to recover more than the amount paid to the contractor against whom the claim is based. Certain costs like: legal fees, interest, consequential damages are not covered by the Fund. What is the max amount that can be awarded from the Guaranty Fund for the acts or omissions of a contractor? - Correct Answer $100, How is the Fund maintained? - Correct Answer $100 by each contractor at the time of applying for a license. The Commission may also assess each contractor a fee of $50 if the Fund falls below $250, How many days does the contractor have to respond to claims from a homeowner once it has been received by the commission?
- Correct Answer Once the Commission receives a claim, it send a copy to the contractor who has 10 days to respond back to the Commission. Who is not eligible to collect from the Fund? - Correct Answer Spouse, relative, or employee of the contractor, or an officer of the corporation. Similarly, an owner may only receive compensation if she/he resides in the house where the work was performed or does not own more than 3 residences. What happens to the license of the contractor after a claim has been paid? - Correct Answer The licensed is suspended, unless
for a homeowner. The commission recommends changes to be in writing. True or False: Before the performance of a home improvement coontract, the owner shall be given a copy of the home improvement contract signed by the contractor - Correct Answer TRUE What is cancellation under Door to Door Sales Act - Correct Answer The Door to Door sales act gives consumers certain rights, including the right to cancel the contract without any penalty or obligation, by sending a notice of cancellation to the seller by midnight of the fifth business day following the sale, or the seventh business day of the buyer is at least 65 years old. If the homeowner cancels the contract, contractor must return the deposit within 10 business days following receipt of cancellation. What is the NOTICE OF CANCELLATION requirement for Door to Door Sales Act? - Correct Answer Each contract must include Notice of Cancellation attached to the contract and contractor must obtain a signed written acknowledgement that the buyer has been informed of his/her cancellation rights. The information must include where to send the cancellation notice, by which date. If this information is not included or given to homeowner, the buyer may cancel in any manner and by any means. Notice of cancellation - good available to buyer - Correct Answer If goods are made available to the contractor and the contractor does not pick them up within 20 days of the date of your notice, you may dispose of the goods without any further obligation When is a Home Improvement Job NOT covered? - Correct Answer The Door to Door sales act does NOT cover a home improvement project made:
- pursuant to prior negotiations at a retail business with a fixed permanent location where consumer goods are exhibited or consumer services are offered for sale on a continuing bases
- In which the buyer has initiated contact and the goods or services are needed to meet a bona fide personal emergency of the buyer and the buyer gives the seller a separate dated and signed personal statement in the buyers handwriting that describes the situation that required immediate remedy and expressly acknowledges and waives rights to cancel the sale, and the seller in good faith makes a substantial beginning of the performance of the contract Who enforces Door to Door sales act? - Correct Answer Attorney General of MD How many contractors can a salesperson represent? - Correct Answer 2 max, but may only represent ONE at the time of sale. What happens if a salesperson leaves a contractor's team? - Correct Answer The contractor is responsible for notifying the commission What are the provisions for advertising under home improvement law? - Correct Answer 1) Advertising must contain name, and MHIC license number regardless of whether the advertisement is in print, radio or TV.
- The advertisement cannot be false, deceptive or misleading For example: if advertisement contains a price which does not include all costs of items necessary for the proper function or appearance of the product, this must be clearly stated. Likewise, any limitation to what will be supplied at the advertised price shall be stated clearly next to the statement; if delivery or installation charges ar extra, the advertisement shall disclose the fact.
Lists exceptions to HI License - Correct Answer - Individual who works for a contractor or suib who is paid by salary and is not a salesperson
- A celrical employee, retail clerk, to a licensed contractor
- A solicitor for a contractor who calls an owner by phone only
- An architect, electriciam, plumber, HVAC contrator (who is reuired by state to meet standards of competency in their profession)
- a licensed secuity system tecitian under Title 18 of the Business Occupations Article
- A licensed Marine contracor under Title 17, Subtitle 3 The commission may issue a license to an applicant who has violated 8-601 if - Correct Answer 1 year has passed since the conviction What is term of license - Correct Answer unless a license is renewed for a 2 year term as provided in this section, the license expires:
- If the Sec staggers the term of the licenses, on the date that the Secretary set
- If the Sec does not stagger the licenses, on the first June 30 that comes after the effective date of the license in an odd number year How long does a licensee have to notify the Commission of change in business ownership or control - Correct Answer 10 days How many people in a Hearing Board - Correct Answer 3 Decision of Hearing Board - Correct Answer Decision of the Hearing Board shall be:
- by majority of votes
- in writing
- submitted to the Commission
Unless, within 15 days after the hearing board submitted its decision to the Commission, the Commission or a member of the Commission finds that a full hearing by the Commission is required: - Correct Answer - the decision of the Board is final
- The decision is a final decision of the Commission
- a party who is aggrieved by the decision may take an appeal provided in 8- How long after being denied after a hearing can a peson reapply for license - Correct Answer 6 months What are the conditions for an owner to put a claim against the Fund? - Correct Answer - Resides in the home as to which the claim is made
- Does not own more than 3 residences
- Limitation period - a claim shall be made against the fund whitin 3 years after the claimant discovers it, or by use of ordinary diligence, should have discovered the loss or damage Inducements - Tangibel items for advertisement - Correct Answer To advertise or to promote sales, a contractor or salesperson may give to a propestive customer a tangible item if the cost to the contractor does not exceed $ Miss-representation - A person MAY NOT make a false promise that is likely to influence, persuade or induce in connection with a home improvement contract - Correct Answer True Violations: Failure to include name or license number in advertisement - Correct Answer First $100; Subsequent $ Violations: Publishing a false or misleading adversitement - Correct Answer First $300, Subsequent $
conflict between specs and applicable codes, you must follow the stricter of the 2 (The codes are the minimum requirements by law) Define contract - Correct Answer the agreement between you and owner Define bond - Correct Answer may be required as part of bid submittal (bid and performance bonds) Determine estimated costs using the QUANTITY TAKE OFF METHOD - Correct Answer After estimating materials and labor, the following are added:
- Subcontractor fees
- labor burden
- project overhead
- project equipment
- contingencies
- allowances
- company overhead
- profit What can help determine labor costs for each task? - Correct Answer Information from previous jobs can help accurate job costs What is used to determine labor burden - Correct Answer - Medicare and SS
- Fed unemployment
- Workers Comp
- Liability ins
- State unemployment ins
- company benefits (health ins , vacations, etc) Project equipment cost - Rented - Correct Answer Take into consideration:
- Equipment rental rate
- labor cost to pick up and return
- labor cost to operate
- other costs (fuel) Rent, lease or buy? What are the advantages of leasing? - Correct Answer - no down payment
- duration of payments over a long period making them lower
- lease payments are deductible
- obsolete equipment is returned to owner Contingencies - Correct Answer A contingency is sometimes added to an estimate to protect the contractor of anticipated problem or condition. For example - a low risk project may have 2% added How much percentage is usually overhead? - Correct Answer 5 to 10 percent Examples of project overhead - Correct Answer - bonds
- temporary storage
- temp office
- security guard
- utilities
- dumpsters
- portable toilets Example of company overhead - Correct Answer - office rent
- accounting fees
- taxes
- telephone
- legal fees
- Admin labor
Some questions that could lead to legal action and are off limits when interviewing a potential employee - Correct Answer - How old are you?
- Do you have an disabilities?
- Are you pregnant?
- Are you married?
- Do you have any children?
- What is your religious affiliation?
- What is your sexual orientation?
- What is your ethnic background? Questions should be ask in a job interview - Correct Answer - Ability to work in team
- ability to handle conflict
- expectations of job (salary, benefits, working hours, etc)
- past work history and reasons for leaving previous job
- level of expertise or skill
- training or education
- safety record
- questions about the job Reporting new hires to MD in how many days? - Correct Answer 20 Working hours for minor 16-17 are - Correct Answer 8 hrs of non school land non work time in each 24 hour period Prohibited tasks for minors - Correct Answer cleaning or adjusting of any power driven machine with exception of office machines T or F - All minors are prohibited from employment in occupations considered hazzrdous - Correct Answer True
What are hazzardous tasks - Correct Answer Specific tasks outlined as hazardous or detrimental that apply to the construction industry (with the exception of apprentices as described by law) include but are not limited to:
- operating power driven machines such as woodworking machines, power driven circular saws, guillotine shears
- elevator or power driver hoisting apparatus
- metal forming punching or shearing machines
- driving any motor vehicle and being outside helper
- exposure to radioactive substances and ionizing radiations
- manufacturing brick, tile or related products
- roofing operations
- excavating operations Employee documentation and files - Correct Answer Once an employee is hired a file should be set up and include: I- W- W- State tax form Employment application Policy sign off Emergency notification form What is in I-9 - Correct Answer Documents that shows that the employee has the legal immigration status to work in the US What is W-4 - Correct Answer Form to determine proper federal tax withholding What is W-5 - Correct Answer Form to receive EIC (Earned income credit) in advance Fair Labor Standards Act (FLSA) which define standards for basic min wage and OT pay covers what? - Correct Answer - Min wage
What are acceptable documents for I9 - Correct Answer US passport certificate of US citizenship certificate of naturalization permanent resident card unexpired foreign passport with stamp What is regulated by Americans with Disabilities Act (ADA)? - Correct Answer The law prohibits discriminating against persons with disabilities and applies to employers with 15 or more employees. In general the employment provisions of ADA require (1) equal opportunity in selecting, testing, and hiring qualified applicants with disabilities. (2) Job accommodations for applicants and workers with disabilities (3) and equal opportunities in promotion and benefits. Conditions covered under ADA - Correct Answer epilepsy paralysis HIV AIDS Substantial hearing or visual impairment Mental retardation specific learning disability Name laws that protect rights of employees - Correct Answer - David Bacon (prevailing wage)
- Walsh-Healy Public contracts Act (min wage reg and ot contracts for federal government)
- Service-Contract Act (prevailing wage on contracts to provide services to the federal government)
- Wage Garnishment Law (limits the amount that can ve legally garnished and prohibits firing an employee whose pay is garnished for payment of a single debt)
- Family and Medical Leave Act (
Workers Comp requirements? - Correct Answer An employer who has one or more employees must carry workers comp insurance Unemployment requirements? - Correct Answer Program that provides unemployment benefits top eligible workers who become unemployed through no fault of their own. Required postings by law - Correct Answer See page 3- Basics to include in Company handbook - Correct Answer - Company history
- Compensation guidelines (introductory period, full time requirements etc)
- Payroll distribution dates and times
- Benefits
- Normal working hours
- Overtime pay
- Vacation time
- Sick days
- Policy on sexual harassment
- Policy on use of illegal drugs
- Non discrimination policy
- Rules of conduct (disciplinary action for insubordination, fighting, etc)
- Safety policies
- Equipment and tool policies
- Disciplinary actions procedures Ways to motivate employees - Correct Answer - provide formal and informal opportunities for employees to learn new skills
- Empower employees to make decisions and give positive and constructive feedback
- provide clear expectations for your employees
- Conduct performance reviews on a regular basis
