Minnesota Residential Contractor Exam — All Questions

Which agency licenses residential building contractors in Minnesota and also administers the licensing exam?

• a.The Minnesota Department of Commerce
• b.Each county's board of building appeals
• c.The Minnesota Department of Labor and Industry (DLI)✓
• d.PSI, under contract to the Secretary of State

Minnesota residential contractors are licensed by the Department of Labor and Industry (DLI) under Minn. Stat. Chapter 326B. Unlike most states, DLI administers the exam itself rather than outsourcing it to PSI or Prometric.Minn. Stat. Ch. 326B

A Minnesota residential contractor is exempt from the license requirement if gross annual receipts from residential building work are no more than:

• a.$100,000
• b.$15,000✓
• c.$600
• d.$50,000

Under Minn. Stat. 326B.805, a person whose gross annual receipts from residential building or remodeling work are $15,000 or less is exempt from the licensing requirement. Above that figure, a license is required.Minn. Stat. 326B.805 (gross-receipts exemption)

Besides the gross-receipts exemption, what other situation can exempt a Minnesota worker from the residential building contractor license?

• a.Performing work in only a single special skill and not coordinating other trades✓
• b.Owning a truck registered in Minnesota
• c.Being at least 40 years old
• d.Working only on weekends

Minnesota exempts a person who works in only one special skill and does not coordinate other trades. The general residential building contractor license is aimed at those who contract directly with homeowners across more than one special skill.Minn. Stat. 326B.805 (single-skill exemption)

Which best describes the Minnesota residential contractor licensing examination?

• a.An oral interview conducted by PSI
• b.A closed-book exam scored 81 of 115
• c.An open-book exam of 110 questions in 330 minutes, requiring 70% to pass✓
• d.A closed-book exam of 50 questions in 75 minutes

The Minnesota exam is a single open-book test of 110 questions in 330 minutes (5.5 hours), and a candidate must score 70% to pass. Candidates may use the 2020 Minnesota Residential Code and the DLI reference manual.Minnesota DLI examination structure

How does Minnesota treat a passing NASCLA Accredited Commercial General Building Contractor result for residential licensure?

• a.It grants an automatic Minnesota license
• b.It is not accepted; the candidate must still pass the DLI-administered Minnesota exam✓
• c.It replaces the Minnesota exam entirely
• d.It replaces the continuing-education requirement

Minnesota does not accept the NASCLA exam. A candidate must pass the DLI-administered Minnesota residential contractor examination regardless of any NASCLA credential.NASCLA acceptance (Minnesota)

What is the difference between a Minnesota Residential Building Contractor license and a Residential Remodeler license?

• a.There is no difference; the terms are interchangeable
• b.The Building Contractor license covers new construction and additions, while the Remodeler license covers improvements to existing dwellings✓
• c.The Remodeler license authorizes electrical utility work
• d.The Building Contractor license is for commercial towers only

A Residential Building Contractor license covers new home construction and additions, while a Residential Remodeler license covers improvements and repairs to existing dwellings. An applicant chooses the category matching the work it performs.Minnesota residential license categories

How does a Minnesota company satisfy the exam requirement for a residential contractor license?

• a.The company registers its name only, with no individual examinee
• b.Every field employee must individually pass the exam
• c.It designates a qualifying person who passes the DLI examination on the company's behalf✓
• d.The company posts a $50,000 bond in lieu of any exam

A Minnesota company designates a qualifying person who passes the DLI licensing examination. The company then holds the license through that qualifying person, who is responsible for its residential contracting.Minnesota qualifying person requirement

A handyman who earned $12,000 last year in a single skill expects to grow, coordinate multiple trades, and bill $40,000 next year. What must happen?

• a.Nothing; the $15,000 exemption is permanent once claimed
• b.The worker must obtain a Minnesota residential contractor license, because receipts will exceed $15,000 and the work now spans multiple skills✓
• c.The worker may keep operating unlicensed indefinitely
• d.The worker must post a bond but needs no license

Once residential building receipts exceed $15,000 and the worker coordinates more than one special skill, the exemptions no longer apply, and a Minnesota residential contractor license (with a qualifying person passing the DLI exam) is required.Minn. Stat. 326B.805 (growth past exemption)

Instead of requiring each residential contractor to post a surety bond, how does Minnesota protect homeowners from contractor fraud or failure to perform?

• a.It requires a $50,000 cash deposit from every contractor
• b.It requires homeowners to buy title insurance
• c.It has no consumer-protection mechanism
• d.Through the Contractor Recovery Fund, which reimburses homeowners for losses caused by a licensee✓

Minnesota uses the Contractor Recovery Fund under Minn. Stat. 326B.89. Licensees pay into the fund, and homeowners who suffer losses from a licensee's fraudulent or dishonest conduct or failure to perform may recover from it after obtaining a judgment, up to statutory limits.Minn. Stat. 326B.89 (Contractor Recovery Fund)

Under Minnesota's statutory home-warranty law, a new home is warranted against major construction defects for how long?

• a.One year
• b.Two years
• c.Thirty days
• d.Ten years✓

Minn. Stat. Chapter 327A warrants a new home against major construction defects for ten years. Faulty workmanship and materials are warranted for one year, and defective installation of plumbing, electrical, heating, and cooling systems for two years.Minn. Stat. Ch. 327A (statutory home warranty)

Under Minnesota's statutory warranties, defects caused by faulty workmanship and defective materials in a new home are warranted for:

• a.Five years
• b.Ten years
• c.One year✓
• d.Ninety days

Minn. Stat. Chapter 327A provides a one-year warranty against defects caused by faulty workmanship and defective materials, a two-year warranty on plumbing/electrical/HVAC installation defects, and a ten-year warranty against major construction defects.Minn. Stat. Ch. 327A (1-year warranty)

Before a Minnesota homeowner can recover from the Contractor Recovery Fund, what is generally required?

• a.The homeowner must file with the IRS
• b.The homeowner must first obtain a judgment against the licensed contractor✓
• c.Nothing; the fund pays on request
• d.The homeowner must post a bond

A claimant generally must obtain a court judgment against the licensee and be unable to collect it before recovering from the Contractor Recovery Fund. The fund then reimburses the owner up to the statutory limits and may pursue the contractor.Minn. Stat. 326B.89 (claim process)

Which of the following is a prohibited practice that can lead DLI to discipline a Minnesota residential contractor?

• a.Hiring licensed subcontractors
• b.Carrying more insurance than required
• c.Diverting funds received for a project, or abandoning the project✓
• d.Charging fair market prices

Minn. Stat. Chapter 326B allows DLI to discipline a contractor for fraudulent or deceptive practices, diverting project funds, abandoning a project, failing to pay subcontractors, code violations, or operating while unlicensed.Minn. Stat. Ch. 326B (prohibited practices)

A homeowner discovers, 18 months after closing, that the plumbing was installed defectively in a Minnesota new home. Which statutory warranty period applies?

• a.The ten-year major-defect warranty only
• b.The one-year workmanship warranty, which has expired
• c.The two-year warranty on faulty installation of plumbing, electrical, heating, and cooling✓
• d.No warranty applies to plumbing

Faulty installation of plumbing, electrical, heating, and cooling systems is covered by the two-year statutory warranty under Minn. Stat. Chapter 327A, so a defect found at 18 months is within that period.Minn. Stat. Ch. 327A (warranty of systems)

What is the effect in Minnesota of contracting to build residential structures for others without the required license while exceeding the exemptions?

• a.It automatically results in a license being issued
• b.It is a violation subject to DLI enforcement and penalties, and undermines the contractor's standing to collect✓
• c.It is fully lawful as long as the work is good
• d.It only affects the contractor's income taxes

Operating as an unlicensed residential contractor beyond the exemptions violates Minn. Stat. Chapter 326B, exposing the person to DLI enforcement and penalties and weakening the contractor's legal standing to enforce payment.Minn. Stat. Ch. 326B (unlicensed practice)

How much continuing education must a Minnesota residential contractor's qualifying person complete during each two-year renewal cycle?

• a.40 hours
• b.14 hours, including at least one hour on energy code and one on business/law✓
• c.60 hours every year
• d.None

Minnesota requires 14 hours of DLI-approved continuing education per two-year cycle, including at least one hour on energy code and at least one hour on business and law topics.Minnesota continuing-education requirement

How often must a Minnesota residential contractor license be renewed?

• a.It never expires
• b.Every three years
• c.Every two years✓
• d.Every year

Minnesota residential contractor licenses are renewed on a two-year cycle, and the qualifying person must complete the required continuing education within that period to renew.Minnesota license renewal cycle

Roughly how is the Minnesota residential contractor exam weighted between code and law?

• a.About 60% Minnesota Residential Building Code and about 40% statutes, licensing, and business law✓
• b.Half federal tax, half OSHA
• c.100% business law, no code
• d.100% code, no law

DLI weights the Minnesota exam approximately 60% toward the 2020 Minnesota Residential Building Code and about 40% toward statutes, licensing, and business law.Minnesota exam content weighting

Which references may a candidate use during the open-book Minnesota residential contractor exam?

• a.Any personal notes and a laptop with internet
• b.No references; the exam is closed book
• c.Only the federal International Building Code
• d.The 2020 Minnesota Residential Code and the DLI-provided reference manual✓

The Minnesota exam is open book. Candidates may use the 2020 Minnesota Residential Code and the DLI-provided reference manual, so quick navigation of those references is key.Minnesota open-book exam references

A Minnesota residential contractor hires employees. What coverage is generally required?

• a.Only a surety bond in place of any insurance
• b.Workers' compensation insurance, in addition to general liability✓
• c.No insurance is ever required
• d.Only flood insurance

A Minnesota employer with employees generally must carry workers' compensation insurance, and residential contractors also carry general liability. Because Minnesota uses the Recovery Fund instead of a universal bond, these policies remain the contractor's primary risk protection.Minnesota workers' compensation

A candidate expects to schedule the Minnesota contractor exam through PSI, like in other states. What is correct for Minnesota?

• a.The exam is administered by the county building official
• b.The exam is administered directly by DLI, not by PSI✓
• c.Minnesota uses ProV for this exam
• d.Minnesota uses Prometric for this exam

Minnesota administers the residential contractor exam directly through DLI, not through PSI or another third-party vendor, which is a distinctive feature of the Minnesota process.Minnesota DLI-administered exam logistics

A Minnesota applicant asks what surety bond amount the state requires of every residential contractor. What is the best answer?

• a.$550,000 for every contractor
• b.Minnesota does not require a universal per-contractor bond; consumer protection runs through the Contractor Recovery Fund✓
• c.$15,000 for every contractor
• d.$50,000 for every contractor

Minnesota does not impose a universal surety-bond requirement on residential contractors. Instead, homeowner protection is provided through the Contractor Recovery Fund under Minn. Stat. 326B.89.Minn. Stat. 326B.89 vs. bonding