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Business and Law II
Residential Construction Trades Licensing and Regulation 326B.821-.89
| Question | Answer |
|---|---|
| How many hours of continuing education must a qualifying person complete during each two-year licensure period? | 14 hours. (Minn. Stat. §326B.821, Subd. 2 — Continuing education hours) |
| Can continuing education credit be earned twice for the same course taken during the same licensing period? | No. Credit may not be earned for the same course taken during the same licensing period. (Minn. Stat. §326B.821, Subd. 2) |
| How much continuing education must relate to energy codes or energy conservation during each renewal cycle? | 1 hour. (Minn. Stat. §326B.821, Subd. 21) |
| How much continuing education must relate to business management strategies during each renewal cycle? | 1 hour. (Minn. Stat. §326B.821, Subd. 21) |
| What two specific subjects must be included in the continuing education of residential building contractors, remodelers, and roofers? | 1 hour of energy codes or energy conservation and 1 hour of business management strategies applicable to residential construction businesses. (Minn. Stat. §326B.821, Subd. 21) |
| Within how many business days must a licensee notify the commissioner when its qualifying person departs or becomes disqualified? | 15 business days. (Minn. Stat. §326B.825 — Loss of qualifying person) |
| How long does a licensee have after the departure of a qualifying person to obtain a new qualifying person? | 120 days. (Minn. Stat. §326B.825) |
| What happens if a licensee fails to obtain a new qualifying person within 120 days? | The license automatically terminates, with or without notice. (Minn. Stat. §326B.825) |
| What are examples of reasons a qualifying person may depart or become disqualified? | Death, disability, retirement, position change, or another reason. (Minn. Stat. §326B.825) |
| What must accompany an application for a residential contractor license? | The required fees and an application on a form prescribed by the commissioner. (Minn. Stat. §326B.83, Subd. 1 — Application) |
| May the commissioner refuse to issue a license because an application is incomplete? | Yes. The commissioner may refuse an incomplete application or one containing unsatisfactory information. (Minn. Stat. §326B.83, Subd. 1) |
| What workers' compensation information must be included in a license application? | A Minnesota workers' compensation insurance certificate. (Minn. Stat. §326B.83, Subd. 2 — Application contents) |
| What liability insurance documentation must be included with a license application? | A certificate of liability insurance. (Minn. Stat. §326B.83, Subd. 2) |
| What employment insurance information must be included in a license application? | The employment insurance account number. (Minn. Stat. §326B.83, Subd. 2) |
| Must an application identify the type of license requested? | Yes. (Minn. Stat. §326B.83, Subd. 2) |
| Whose name and address must be provided if the qualifying person is someone other than the applicant? | The applicant's qualifying person. (Minn. Stat. §326B.83, Subd. 2) |
| For a corporation, which shareholders must be identified on the license application? | All shareholders holding more than 10% of the outstanding stock. (Minn. Stat. §326B.83, Subd. 2) |
| What ownership percentage triggers disclosure of a corporate shareholder on the application? | More than 10% of the corporation's outstanding stock. (Minn. Stat. §326B.83, Subd. 2) |
| How many years of business history must the applicant and qualifying person provide? | The past 5 years. (Minn. Stat. §326B.83, Subd. 2) |
| How far back must an applicant disclose a sale or transfer of the business or another change in ownership, control, or name? | The last 5 years. (Minn. Stat. §326B.83, Subd. 2) |
| Must an applicant disclose previous disciplinary action involving a professional or vocational license? | Yes. The application asks whether the applicant, any employee, or qualifying person has had a license reprimanded, censured, limited, conditioned, refused, suspended, revoked, or otherwise been subject to administrative action. (Minn. Stat. §326B.83) |
| Must construction-related crimes or crimes involving fraud, misrepresentation, or misuse of funds be disclosed? | Yes. (Minn. Stat. §326B.83, Subd. 2) |
| Must an application disclose previous bankruptcy filings? | Yes. Business history includes whether the applicant, managing employee, or qualifying person has filed for bankruptcy or protection from creditors. (Minn. Stat. §326B.83, Subd. 2) |
| Must an application disclose whether a qualifying person qualifies more than one licensee? | Yes. (Minn. Stat. §326B.83, Subd. 2) |
| Who must pass the written licensing examination? | Each qualifying person. (Minn. Stat. §326B.83, Subd. 3 — Examination) |
| What technical subjects must the qualifying-person examination test at a minimum? | Knowledge of commonly used technical terms and knowledge of reference materials and codebooks used for technical information. (Minn. Stat. §326B.83, Subd. 3) |
| What business/legal subjects must the qualifying-person examination test at a minimum? | Understanding of general principles of business management and other pertinent state laws. (Minn. Stat. §326B.83, Subd. 3) |
| Is the examination the same regardless of the type of license requested? | No. Each examination must be designed for the specified type of license requested. (Minn. Stat. §326B.83, Subd. 3) |
| What additional requirements may the commissioner impose instead of denying a license application? | Additional insurance, bonding, reporting, record keeping, and other reasonable requirements necessary to protect the public. (Minn. Stat. §326B.83, Subd. 5) |
| Can a nonresident of Minnesota obtain a Minnesota residential contractor license? | Yes, if the nonresident complies with all Minnesota requirements. (Minn. Stat. §326B.83, Subd. 6) |
| Can an incomplete, false, or materially misleading license or exemption application be grounds for sanctions? | Yes. (Minn. Stat. §326B.84 — Grounds for sanctions)e grounds for sanctions? Yes. (Minn. Stat. §326B.84 — Grounds for sanctions) |
| Can fraudulent, deceptive, or dishonest practices be grounds for sanctions against a contractor? | Yes. (Minn. Stat. §326B.84) |
| Can being prohibited by a court from engaging in the construction business be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can failure to reasonably supervise employees, agents, subcontractors, or salespersons be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Who sets the amount of an additional contractor recovery fund assessment? | The commissioner, based on a reasonable determination of the amount needed to restore an adequate fund balance. (Minn. Stat. §326B.89, Subd. 16) |
| When may an additional recovery-fund assessment be charged? | When the fund balance is less than the commissioner determines is necessary to carry out the purposes of the fund. (Minn. Stat. §326B.89, Subd. 16) |
| What is the maximum additional contractor recovery fund assessment stated in the course when the fund balance is inadequate? | $200 per renewing licensee. (Minn. Stat. §326B.89, Subd. 16 — Additional assessment) |
| Can negligent performance or breach of contract that causes injury or harm to the public be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can violation of a law, rule, or order be grounds for contractor sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can conviction for violation of the State Building Code be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can failure to properly use customer payments to pay labor, materials, skill, and machinery be grounds for sanctions? | Yes, when the contractor knows that labor, skill, material, or machinery furnished for the improvement remains unpaid. (Minn. Stat. §326B.84) |
| What is the appointment of the DLI commissioner as an applicant's agent for legal process generally called? | Consent to service of process. (Minn. Stat. §326B.855, Subd. 2) |
| Whom must every license or certificate-of-exemption applicant appoint to receive service of legal process arising under the residential contractor laws? | The commissioner of the Department of Labor and Industry. (Minn. Stat. §326B.855, Subd. 2) |
| Why is service of process important? | It establishes that the court hearing the lawsuit has jurisdiction over the defendant. (Minn. Stat. §326B.855) |
| What is "service of process"? | The legal procedure by which a party to a lawsuit gives notice of imminent legal action so the parties can respond before the court hearing. (Minn. Stat. §326B.855 — Service of process) |
| What may a contractor be required to furnish regarding unpaid labor or materials to avoid a listed ground for sanction? | A valid lien waiver or a payment bond in the basic amount of the contract price. (Minn. Stat. §326B.84) |
| What repayment is identified in the course after an act results in compensation from the contractor recovery fund? | Twice the amount paid from the fund, plus interest at 12% per year. (Minn. Stat. §326B.84) |
| What interest rate applies to the recovery-fund repayment described in the sanctions section? | 12% per year. (Minn. Stat. §326B.84) |
| What minimum surety bond is identified in connection with the recovery-fund sanction provision? | At least $40,000. (Minn. Stat. §326B.84) |
| Can bad faith, unreasonable delays, or frivolous claims in defense of a civil lawsuit be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can a judgment for failure to pay employees, subcontractors, or suppliers be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| What must a permit office do when an unlicensed person applies for a building permit? | Report the applicant to the commissioner, who may bring an action against the person. (Minn. Stat. §326B.85, Subd. 1) |
| May an unlicensed person use another person's license number to obtain a building permit? | No. Fraudulent use of a fictitious or another person's license number is grounds for enforcement. (Minn. Stat. §326B.84) |
| May a licensed contractor apply for a building permit on behalf of an unlicensed person? | No. This is listed as grounds for sanctions. (Minn. Stat. §326B.84) |
| Is use of a forged mechanic's lien waiver grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can providing false, misleading, or incomplete information to the commissioner be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can refusing to permit a reasonable inspection be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| May a political subdivision issue a building permit to an unlicensed person when licensure is required? | No. (Minn. Stat. §326B.85, Subd. 1 — Building permit) |
| Can conduct demonstrating untrustworthiness, financial irresponsibility, or incompetence be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| Can failure to comply with department requests for information or documents be grounds for sanctions? | Yes. (Minn. Stat. §326B.84) |
| What criminal level applies to a person who violates an order of the commissioner? | Gross misdemeanor. (Minn. Stat. §326B.845 — Penalties) |
| What lien rights does an unlicensed person have if the person knowingly violates §§326B.802–326B.885? | No right to claim a lien; the lien is void. (Minn. Stat. §326B.845 — Lien rights) |
| Does the loss of lien rights of an unlicensed violator eliminate the lawful lien rights of material suppliers or licensed contractors? | No. Their lien rights are unaffected to the extent provided by law. (Minn. Stat. §326B.845) |
| Which two license types identified in the course must maintain a bond to the state? | Licensed residential roofers and licensed manufactured home installers. (Minn. Stat. §326B.86, Subd. 1 — Bond) |
| What minimum bond must a licensed residential roofer maintain? ) | $15,000. (Minn. Stat. §326B.86, Subd. 1 |
| What minimum bond must a licensed manufactured home installer maintain? | $2,500. (Minn. Stat. §326B.86, Subd. 1) |
| Are bonds issued under §§326B.802–326B.885 state bonds or contracts? | No. (Minn. Stat. §326B.86, Subd. 1) |
| What type of insurance must each licensee maintain? | Commercial general liability insurance. (Minn. Stat. §326B.86, Subd. 2 — Insurance) |
| What coverages must the commercial general liability insurance include? | Premises and operations insurance and products and completed operations insurance. (Minn. Stat. §326B.86, Subd. 2) |
| What is the minimum bodily-injury liability limit per occurrence under the separate-limit option described in the course? | $100,000 per occurrence. (Minn. Stat. §326B.86, Subd. 2) |
| What is the minimum aggregate bodily-injury liability limit under the separate-limit option? | $300,000 aggregate. (Minn. Stat. §326B.86, Subd. 2) |
| What is the minimum property-damage insurance limit under the separate-limit option? | $25,000. (Minn. Stat. §326B.86, Subd. 2) |
| What single-limit liability option is identified in the course? | $300,000 per occurrence and $300,000 aggregate for bodily injury and property damage. (Minn. Stat. §326B.86, Subd. 2) |
| Must the liability insurer be licensed to do business in Minnesota? | Yes. (Minn. Stat. §326B.86, Subd. 2) |
| Where must a license number appear on building-permit documents? | On all building permits and building-permit applications. (Minn. Stat. §326B.87, Subd. 1 — License number) |
| Where must the license number appear in jurisdictions that have not adopted the State Building Code? | On the site plan review or zoning permit. (Minn. Stat. §326B.87, Subd. 1) |
| Must a contractor's license number appear on business cards? | Yes. (Minn. Stat. §326B.87, Subd. 1) |
| Must a contractor's license number appear on contracts for work requiring a license? | Yes. (Minn. Stat. §326B.87, Subd. 1) |
| Must a contractor's license number appear in advertising? | Yes. (Minn. Stat. §326B.87, Subd. 2 — Advertising) |
| What are examples of advertising on which the license number must appear? | Signs, vehicles, business cards, published display ads, flyers, brochures, websites, and digital ads. (Minn. Stat. §326B.87, Subd. 2) |
| What two licensing statements must a contractor's contract contain? | The contract must state that the person is licensed and state the license number. (Minn. Stat. §326B.87, Subd. 3 — Contracts) |
| What disclosure is required when a licensee sells residential property constructed and occupied by that licensee? ) | Before the purchase agreement, the licensee must give the buyer a written disclosure regarding limitations on statutory-warranty and contractor-recovery-fund claims. (Minn. Stat. §326B.875 — Disclosures |
| What must the disclosure say about claims arising from the licensee's construction of property the licensee has occupied? | The claims will not be covered by the statutory warranty established by Chapter 327A. (Minn. Stat. §326B.875) |
| What happens to contractor-recovery-fund eligibility if the licensee has occupied the property for one year or more? | Claims arising from the licensee's construction will not be eligible for reimbursement from the contractor recovery fund. (Minn. Stat. §326B.875) |
| How long must the licensee have occupied the property before the recovery-fund disclosure applies? | One year or more. (Minn. Stat. §326B.875) |
| By what date is a license renewal application considered timely? | If received by March 1 of the renewal year. (Minn. Stat. §326B.885, Subd. 1 — Renewal) |
| What happens to an incomplete renewal application? | It will not be processed. (Minn. Stat. §326B.885, Subd. 1) |
| What is the renewal period for a residential contractor, remodeler, or roofer license? | Two years. (Minn. Stat. §326B.885, Subd. 2) |
| What is the renewal period for a manufactured home installer license? | Three years. (Minn. Stat. §326B.885, Subd. 2) |
| What does "gross annual receipts" mean for purposes of the contractor recovery fund? | The total amount derived from residential contracting or remodeling activities, regardless of where performed, without reduction for cost of goods sold, expenses, losses, or other amounts. (Minn. Stat. §326B.89, Subd. 1 — Definitions) |
| Who is a "licensee" for purposes of the contractor recovery fund section? | A person licensed as a residential contractor or residential remodeler. (Minn. Stat. §326B.89, Subd. 1) |
| What is "residential real estate" for purposes of the contractor recovery fund? | A new or existing building constructed for habitation by one to four families, including detached garages intended for storage of vehicles associated with the residential real estate. (Minn. Stat. §326B.89, Subd. 1) |
| What does "fund" mean in §326B.89? | The contractor recovery fund. (Minn. Stat. §326B.89, Subd. 1) |
| Who qualifies as an "owner" for purposes of the contractor recovery fund? | A person having a legal or equitable interest in real property, including qualifying condominium or townhome associations owning common property. (Minn. Stat. §326B.89, Subd. 1) |
| What contractor recovery fund fee applies to gross annual receipts from $1,000,000 to $5,000,000? | $420. (Minn. Stat. §326B.89, Subd. 3) |
| What contractor recovery fund fee applies to gross annual receipts over $5,000,000? | $520. (Minn. Stat. §326B.89, Subd. 3) |
| What is one primary purpose of the contractor recovery fund? | To compensate qualifying owners of residential property. (Minn. Stat. §326B.89, Subd. 4) |
| May contractor recovery fund money reimburse the department for legal and administrative expenses? | Yes. (Minn. Stat. §326B.89, Subd. 4) |
| May contractor recovery fund money be used for residential-contracting education or research? | Yes. (Minn. Stat. §326B.89, Subd. 4) |
| May contractor recovery fund money be used to provide public information concerning residential contracting? | Yes. (Minn. Stat. §326B.89, Subd. 4) |
| What is the maximum recovery-fund compensation stated in the course for one owner per licensee? | $75,000. (Minn. Stat. §326B.89, Subd. 5 — Payment limitations) |
| What is the maximum total recovery-fund compensation to all owners per licensee? | $300,000. (Minn. Stat. §326B.89, Subd. 5) |
| What type of judgment will the contractor recovery fund compensate according to the course? | A final judgment based on a contract directly between the licensee and the homeowner. (Minn. Stat. §326B.89, Subd. 5) |
| Must an owner obtain a final judgment before applying for contractor recovery fund compensation? | Yes. The verified application must show that the owner obtained a final judgment against the licensee in a court of competent jurisdiction. (Minn. Stat. §326B.89, Subd. 6) |
| What types of misconduct may support the final judgment used for a contractor recovery fund claim? | Fraudulent, deceptive, or dishonest practices; conversion of funds; or failure of performance arising directly out of a contract. (Minn. Stat. §326B.89, Subd. 6) |
| What type of financial loss must the owner identify in a recovery-fund application? | The owner's or lessee's actual and direct out-of-pocket loss. (Minn. Stat. §326B.89, Subd. 6) |
| Where must residential real estate be located to qualify for the contractor recovery fund? | In Minnesota. (Minn. Stat. §326B.89, Subd. 6) |
| May the spouse of the licensee qualify for recovery-fund compensation under the requirements listed in the course? | No. (Minn. Stat. §326B.89, Subd. 6) |
| Must an applicant for recovery-fund compensation diligently pursue remedies against judgment debtors and other liable persons? | Yes. (Minn. Stat. §326B.89, Subd. 6) |
| Within how long after a judgment becomes final must the verified contractor recovery fund application be served? | Within 2 years. (Minn. Stat. §326B.89, Subd. 6) |
| What documentation of financial loss must accompany a verified recovery-fund application? | Documents showing the amount of the owner's actual and direct out-of-pocket loss. (Minn. Stat. §326B.89, Subd. 6) |
| How long does the commissioner have after receiving a recovery-fund application to resolve it by agreement or issue an order? | 120 days. (Minn. Stat. §326B.89, Subd. 7 — Commissioner review) |
| What may the commissioner do within 120 days after receiving a recovery-fund application? | Enter into an agreement resolving the application or issue an order accepting, modifying, or denying it. (Minn. Stat. §326B.89, Subd. 7) |
| Who has the burden of proof at an administrative hearing concerning recovery-fund compensation? | The owner. (Minn. Stat. §326B.89, Subd. 8) |
| What standard of proof does the course state applies to the owner at a recovery-fund administrative hearing? | Substantial evidence. (Minn. Stat. §326B.89, Subd. 8) |
| What is the effect of the administrative law judge's order in the contested recovery-fund case? | It constitutes the final decision of the agency. (Minn. Stat. §326B.89, Subd. 8) |
| What happens to the owner's rights in a judgment when the commissioner pays compensation from the contractor recovery fund? | The commissioner is subrogated to the owner's or lessee's rights, title, and interest in the judgment up to the amount paid by the fund. (Minn. Stat. §326B.89, Subd. 10) |
| Does repayment of obligations to the contractor recovery fund eliminate other disciplinary proceedings against the licensee? | No. (Minn. Stat. §326B.89, Subd. 11) |
| Will the contractor recovery fund pay claims by insurers or sureties based on subrogation or similar theories? | No. (Minn. Stat. §326B.89, Subd. 12) |
| Will the fund generally pay an owner for contracting activity performed under a contract with a prior owner? | No, unless the claim is brought and judgment rendered for breach of the statutory warranty under Chapter 327A. (Minn. Stat. §326B.89, Subd. 12) |
| For recovery-fund purposes, does the number of units in a condominium or townhouse building prevent a condo or townhouse owner from being considered an owner of residential property? | No. The condo or townhouse owner or lessee is considered an owner or lessee of residential property regardless of the number of units per building. (Minn. Stat. §326B.89, Subd. 13) |
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