Which of the following is NOT a good strategy for ensuring that subcontractors are financially sound?

Prepare for the Michigan Builders License Exam. Study with flashcards and multiple choice questions, each question having hints and explanations. Get ready for your exam!

Choosing to allow subcontractors to figure out their financial stability themselves is not a good strategy for ensuring that they are financially sound. This approach leaves the financial assessment entirely in the hands of the subcontractors, which can lead to a lack of accountability and possibly overlook significant financial issues.

In contrast, conducting financial assessments, requiring performance bonds, and monitoring payment history are proactive strategies that help a builder gauge the financial health of subcontractors. Conducting financial assessments involves reviewing financial statements and credit history to evaluate a subcontractor's ability to fulfill their obligations. Requiring performance bonds protects against financial loss by ensuring that funds are available to complete the work if a subcontractor cannot. Monitoring payment history allows for insight into how consistently subcontractors meet their financial obligations, providing vital information about their reliability. By focusing on these assessments and requirements, builders can make informed decisions and mitigate the risks associated with subcontractor financial instability.

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