The block contains parchment paper tubes for nesting. The tubes are longer that the block and are folded over on the back and held flat with the screwed on back. Each season the nest block is put up in the spring and the bees do the rest. After nesting the block is taken down and stored in a safe place. In the winter the back is removed and the paper tubes are removed and stored in an unheated area until spring. I just put tubes and all in a small box like the type checks come in. Really any small box will do. While the back is off the holes are reloaded with new parchment paper and the back is put on. The block is ready for next year. I store mine face down on a flat surface to keep other bugs from finding the holes attractive. The second spring when you put the nest block back up, you put the box with the tubes nearby. You must make a hole big enough for a pencil to slide easily through so the bees can get out. The top of the block is decoration only and should not be viewed as weather protection. The block as it is should be used in a sheltered area. Since the back is held in place with screws water can get it and wet the tubes.
If you are putting the block in a protected area, you can just put the top on and put it up. I like to put Duck tape over the crack where the block and back come together then put the top on. That will keep any small critters out of the back of the block. Any protected location will work but south facing to get a little morning sun is best. You can screw it to something or just put it on a high shelf. Either way it should not be allowed to wiggle. They need a supply of mud nearby and if it starts to dry up then you will have to wet it.
If you want to put it out in the weather you must ensure that it is protected from the rain. First, tape the seams then put the roof on and tape the new seam made by the roof and the back. Your goal is to keep rain from getting in. You could add a piece of plastic or even a larger board on the roof to make a larger overhang if you like. Remember also, wherever it is mounted it should not move.
The best time to put the nest block up is when the fruit trees just start to bloom. If you are a little early they will find something to eat. If this is the second year or later don't forget your release box. You may have bees in tubes from some other source (seed bees) and they should be released in the same manner. Make sure it is close to the nest block as most females will seek new nest holes close to home. One easy way is to duck tape the release box to the bottom or side of the nest block and pin the tape with push pins. When left in their tubes the males will emerge first and hang around waiting for the females to come out. If the males get hungry they will go eat off whatever is available. They will not all go at once and the release box will be well attended.
My nest blocks stay up from mid March to mid July. So far over the last 4 years I have not used any protective measures for pests. Some folks use screens for wasps (after nesting is complete) or cages for woodpeckers (anytime). With these protections you could leave your boxes up until it is time to replace the tubes. If you take your box down as I do; handle them carefully so as not to bump the developing bees around. You do not want to separate the egg/worm from the pollen ball. I store my carefully removed block on a shelf in the unheated garage and there it sits until January.
In January when you take off the back of the block the bees are developed and in there cocoons. There is no need to worry about roughing them up in the block any more. Simply unscrew the back and remove it. The flattened portion of the tube makes a nice pull tab to remove the nest tubes. Pull gently straight back and the whole tube will come out intact. At this point I put my nest tubes in the release box and move them to the storage shed where it gets much colder for the remainder of their sleep. If you want to inspect your cocoons you can do so at any time before spring. I usually get the release box out of the shed and go in the garage to inspect the tubes. I use a block of softwood and push pins to hold 2 corners while I unroll the parchment paper tubes. With the tube unrolled completely, pin the last 2 corners. Now the contents are there for you to inspect. I do not inspect every tube. While I find a few unwelcome guests they don't seem to have a profound effect on the overall outcome for my colony. You can remove the cocoons or just roll them back up. If you roll them up you can use the flattened end as a guide to put the tube back in shape. Remember to put cocoons and or tubes back in the release box and store them where it is cold. I actually like the hands off method because it is ANAP! In fact the only reason I ever unroll a tube is curiosity; I just can't help myself.You have until spring to refill your nest block but I do it right after I remove the nest tubes. Get a roll of parchment paper, scissors, and a pencil (small enough to fit in and long enough to reach through the holes). Tear off half as many strips you have holes; each strip will fill two holes. Strips should be 3 or 4 inches wide to give several wraps on the pencil. Cut the strips an inch or so longer than the block so they stick out the back. Tightly roll the paper on the pencil and put the tube in the block just even with the front of the block. Remove the pencil and tap the ends of the tube with your finger to help it expand and fill the hole. Make sure as it expands that it stays flush with the front of the block. Continue stuffing until all tubes are full. Turn the block face down on the table or flat surface and sharply bend the protruding tubes down toward the bottom. If the bottom row hangs below the bottom of the block you can trim them now; you don't want the flattened straws hanging out of the back of the box. The upper ones shouldn't matter as they are all going to be covered by the back. With the block still face down you can screw the back on and you're done; ready for spring. I store mine on a shelf in the garage: face down to keep any happy garage inhabitants from taking up residence in my tidy little tubes.