Law Test 5
When lead paint is found in a home improvement project, who is responsible for the abatement? homeowner contractor city inspector Department of Building Safety
Correct answer The correct answer is A. homeowner
If the "Arbitration of Disputes" clause in Business and Professions Code 7191 is not included and initialed by both parties in a home improvement contract, arbitration may not be enforced against any persons other than the: licensee homeowner subcontractors material suppliers
Correct answer The correct answer is A. licensee
When a contractor furnishes a performance and payment bond for a home improvement project, it is not necessary for a contractor to provide which of the following? lien notices agreed contract price arbitration clause notice schedule of payments and specifications
Correct answer The correct answer is A. lien notices
When a homeowner requests that the contractor to obtain a payment and performance bond, the owner is wanting coverage for: materials, labor and supplies equipment, tools and supplies personal injury, overhead and equipment property damage, personal injury and acts of God
Correct answer The correct answer is A. materials, labor and supplies
Who of the following may require the contractor to obtain a performance and payment bond? tenant lender subcontractor Contractors State License Board
Correct answer The correct answer is A. tenant
A licensed contractor signs a home improvement contract for $25,000. What is the maximum down payment the contractor may receive? $500 $1,000 $1,500 $2,500
Correct answer The correct answer is B. $1,000
Information on licensing and mechanics' liens must be in: 10-point italic type 10-point roman boldface type 12-point roman italic bold type 12-point roman boldface red type
Correct answer The correct answer is B. 10-point roman boldface type
A subcontractor for a home improvement project decides to file a mechanics' lien after failing to receive payment for work performed. With which of the following is this mechanics' lien filed? Department of Labor County Recorders Office Contractors State License Board City Planning and Building Department
Correct answer The correct answer is B. County Recorders Office
Payment and performance bond information is contained within the: loan documents Mechanics Lien Warning warranty information contractor's license bond
Correct answer The correct answer is B. Mechanics Lien Warning
Consent to a home improvement contract must be given by both parties before: the site is inspected any work is performed the contractor buys materials the contractor hires subcontractors
Correct answer The correct answer is B. any work is performed
A joint control allows the homeowner of a home improvement contract to control with a third party: job inspections construction funds construction time lines materials, shapes and sizes
Correct answer The correct answer is B. construction funds
Who should review the home improvement contract with the owner before signing a contract? lender contractor plan checker city inspector
Correct answer The correct answer is B. contractor
For a security loan purchase, the owner's right to rescind the transaction lasts until midnight of the third business day after the: start of construction creditor's delivery of the required notice to rescind contractor's delivery of the required notice to rescind dated and signed home improvement contract is submitted to the owner for signature
Correct answer The correct answer is B. creditor's delivery of the required notice to rescind
If the total cost of a project exceeds $500, a contractor must: obtain a contract bond have a written contract have a performance and payment bond have a safety environmental inspection
Correct answer The correct answer is B. have a written contract
When contracting for a home improvement, the contract is an agreement between the contractor and the: tenant homeowner salesperson None of the above
Correct answer The correct answer is B. homeowner
Who must sign the 3-day notice of cancellation in order to cancel a home improvement contract? lender homeowner contractor building inspector
Correct answer The correct answer is B. homeowner
In conducting a home improvement business, consent by both parties is required: to give notices on all contracts to hire attorneys to get business licenses
Correct answer The correct answer is B. on all contracts
After the contractor reviews the plans and specifications, what is needed to proceed? title insurance pre-lim property owner's signed approval joint control company's agreement city building inspector's signature
Correct answer The correct answer is B. property owner's signed approval
To be binding, change orders to a home improvement contract must contain which of the following? date of original contract signatures of both parties contractor's surety company signature of the homeowner only
Correct answer The correct answer is B. signatures of both parties
If after starting a home improvement project the contractor discovers that the details and specifications do not correctly show the existing construction, the contractor should: stop and work on a correction stop the job and inform the owner or his agent continue the work if variations are only minor stop the job and inform the Building Department
Correct answer The correct answer is B. stop the job and inform the owner or his agent
Plans and specifications pre-approved by the contractor and owner may receive the final approval after the contract has been signed only when: construction insurance must be acquired the plans and specifications need to be revised subcontractor availability could impact final design plans and specifications development costs are part of the contract
Correct answer The correct answer is B. the plans and specifications need to be revised
When there is a third party lender, once the transaction is completed and accepted by the homeowner, the homeowner may cancel: until the first draw within 3 business days within 5 business days until the job is started
Correct answer The correct answer is B. within 3 business days
A licensed contractor signs a home improvement contract for $9500. What is the maximum down payment the contractor may receive? $475 $500 $950 $1,000
Correct answer The correct answer is C. $950
If a contractor includes an arbitration provision on a home improvement contract it must be set in at least: 9-point boldface type print 10-point italic boldface type print 10-point roman boldface type print 12-point boldface type print
Correct answer The correct answer is C. 10-point roman boldface type print
How many days, after the approximate start date stipulated in the contract, must the contractor substantially start work before the contractor is in violation of the law? 10 days 15 days 20 days 30 days
Correct answer The correct answer is C. 20 days
The contractor's disciplinary disclosure notice must be in capital letters and in which of the following types? 10-point italic type 10-point italic-red print 8-point roman boldface type print 6-point roman boldface type-red print
Correct answer The correct answer is C. 8-point roman boldface type print
Due to unforeseen complications, the contractor must increase the contract price, therefore the contractor: should get a loan from the bank may request assistance from the subcontractor and the owner must agree to a written and signed change order should request the building inspector to revise the specifications
Correct answer The correct answer is C. and the owner must agree to a written and signed change order
Which of the following must a home improvement contract contain? permit number license bond number approximate starting date local building department requirements
Correct answer The correct answer is C. approximate starting date
Consent to a home improvement contract is given by: the property owner only either spouse in writing both parties to the contract both the contractor and an attorney
Correct answer The correct answer is C. both parties to the contract
A joint control is primarily the third party management of: employees job scheduling construction funds construction inspections
Correct answer The correct answer is C. construction funds
After a hazardous material abatement has been completed on a home improvement project, and prior to resuming work, the: lender should be notified building inspector should be notified contractor should be notified by the owner in writing Environmental Protection Agency should be notified by the contractor
Correct answer The correct answer is C. contractor should be notified by the owner in writing
Prior to signing a home improvement contract, the homeowners shall be informed of the: contractor's references number of subcontractors on the job contractor's name, address, and license number amount of money the contractor allowed for overhead
Correct answer The correct answer is C. contractor's name, address, and license number
A joint control company manages the: time and materials costs home improvement contract writing disbursement of construction funds contractor's personal business also
Correct answer The correct answer is C. disbursement of construction funds
Change orders to a home improvement contract are required to be signed by the: attorney inspector homeowner and contractor general contractor's subcontractors
Correct answer The correct answer is C. homeowner and contractor
Prior to signing a home improvement contract, a critical review of the plans and specifications is required by the: homeowner and lender contractor and lender homeowner and contractor building inspector and contractor
Correct answer The correct answer is C. homeowner and contractor
The Notice to Owner gives the owner information for protection from: fees fines liens additional charges
Correct answer The correct answer is C. liens
When there is a third party lender, the contract is unenforceable against the buyer per the Business and Professions Code 7163 Truth in Lending Act, if the: home improvement contract is sold by a salesperson funding is provided by a government loan or grant obtainment of a loan is a condition precedent to the contract and the loan is not accepted owner decides that a competing contractor will finish the remaining work for less than the amount stated in the contract
Correct answer The correct answer is C. obtainment of a loan is a condition precedent to the contract and the loan is not accepted
A swimming pool contract must include which of the following? contract bond performance bond plan and scale drawings surety company's name and address
Correct answer The correct answer is C. plan and scale drawings
The contractor's disciplinary disclosure notice must be provided to consumers: prior to completion of job before the license is suspended prior to entering into a contract after signing a contract and before 3 business days pass
Correct answer The correct answer is C. prior to entering into a contract
A home improvement salesperson must put his or her: name on the loan papers name on the city inspection card registration number on the contract registration number on the completion notice
Correct answer The correct answer is C. registration number on the contract
The 3-day notice of cancellation for a home improvement contract is also known as an: shop notice notice to correct right to rescind notice insufficient funds notice
Correct answer The correct answer is C. right to rescind notice
A home improvement salesperson who sells a home improvement project must include what information on the contract? material suppliers' names salesperson's insurance company name salesperson's name and registration number salesperson's name and certification number
Correct answer The correct answer is C. salesperson's name and registration number
For which of the following types of construction contracts does the Business and Professions Code Section 7165 allow substitute provisions, if the job is to be financed by a third party lender? roofing job landscaping job swimming pool job heating and air conditioning job
Correct answer The correct answer is C. swimming pool job
A home improvement salesperson's registration must be renewed every: job year two years four years
Correct answer The correct answer is C. two years
Under proper circumstances, the Contractors State License Board will arbitrate home improvement contract disputes: of any amount over $25,000 only up to $50,000 only between $5,000 and $50,000 only
Correct answer The correct answer is C. up to $50,000 only
When there is a third party lender, once the transaction is completed and accepted by the homeowner, the homeowner may cancel: within five working days until the job is started within three business days until the job phase is completed
Correct answer The correct answer is C. within three business days
A down payment for a home improvement contract can be accepted by the contractor up to: 20% of the contract, if it is over $25,000 30% of the contract, if there are special orders any amount the owner and the contractor agree upon $1000 or 10% of the contract amount, whichever is less
Correct answer The correct answer is D. $1000 or 10% of the contract amount, whichever is less
Time and materials contracts must be written with a fixed price whenever the cost of the contract could exceed: $100 $200 $300 $500
Correct answer The correct answer is D. $500
How long can a licensed contractor be liable for latent defects? 2 years 4 years 5 years 10 years
Correct answer The correct answer is D. 10 years
What is the statute of limitations for a consumer's complaint on latent defects? 2 years 4 years 5 years 10 years
Correct answer The correct answer is D. 10 years
The contractor's disciplinary notice must be in all capital letters and in which of the following types? 8-point italic type-red print 8-point roman type-black print 6-point roman boldface type-red print 10-point roman boldface type-black print
Correct answer The correct answer is D. 10-point roman boldface type-black print
When using the Contractor's State License Board's voluntary or mandatory arbitration, who pays for the costs? homeowner contractor homeowner and contractor Contractor's State License Board
Correct answer The correct answer is D. Contractor's State License Board
Latent defects are: illegal contracts the owner's responsibility the lender's responsibility Hidden defects that may take much time to discover and can be costly.
Correct answer The correct answer is D. Hidden defects that may take much time to discover and can be costly.
Truth in Lending Act rescission rights apply when: any loan is signed for any home improvement work the dollar amount of the contract exceeds $20,000 a home improvement salesperson procured the contract a nonpurchase lien or security interest is taken in the consumer's principal dwelling
Correct answer The correct answer is D. a nonpurchase lien or security interest is taken in the consumer's principal dwelling
The Truth in Lending Act applies to home improvements when: the dwelling is a rental the dwelling is over 10 years old the contracted project is over $10,000 a security interest in the home applies
Correct answer The correct answer is D. a security interest in the home applies
A joint control company is: the primary construction lender owned by the general contractor the mortgage company for the homeowner a service which acts as an escrow holder for construction funds
Correct answer The correct answer is D. a service which acts as an escrow holder for construction funds
For which of the following needs to be a licensed contractor? landscaping a bathroom remodel extending a driveway all of the above
Correct answer The correct answer is D. all of the above
In a home improvement contract, a contractor must give the owner a schedule of the: payroll dates material dates anticipated inspection dates approximate starting and completion dates
Correct answer The correct answer is D. approximate starting and completion dates
When should contractor licensing and lien information be given to a homeowner who contracts for a home improvement project? once the work has started at the end of the project when requested by the homeowner before the contract is signed
Correct answer The correct answer is D. before the contract is signed
Contracts should be freely exercised by: the homeowner only the contractor only either party's attorney both parties to the contract
Correct answer The correct answer is D. both parties to the contract
A joint control is a: financial advisor joint personnel advisor building inspection control service builder's construction control service
Correct answer The correct answer is D. builder's construction control service
Change orders are required when the: contractor's personnel are changed material suppliers are changed contract start day is changed contract amount is changed
Correct answer The correct answer is D. contract amount is changed
Who is ultimately responsible for approving the plans and specifications for a home improvement contract? architect salesperson contractor and inspector contractor and owner
Correct answer The correct answer is D. contractor and owner
Plans and specifications require critical review by the: owner to check all the subcontractors owner to check all the material suppliers contractor and owner to establish all the payment schedules contractor and owner to establish an agreement on the work descriptions
Correct answer The correct answer is D. contractor and owner to establish an agreement on the work descriptions
According to the Truth in Lending Act, homeowners may rescind a transaction within three business days after the: first payment deposits made homeowner evaluates the workmanship creditor's delivery of all the required notices
Correct answer The correct answer is D. creditor's delivery of all the required notices
When there is a third party lender, a contractor can enforce the home improvement contract after 3 business days from the: salesperson turning in a signed contract contractor and buyer signing the contract buyer submitting the loan package to the lender date the loan and the contract are completed and accepted by the buyer
Correct answer The correct answer is D. date the loan and the contract are completed and accepted by the buyer
In contract consent, duress or threats of harm CAN be committed by: only the owner the joint control only the contractor either party to the transaction
Correct answer The correct answer is D. either party to the transaction
A builder's construction control service primarily acts as an: payroll service independent cost analyst architect reference service escrow holder of a consumer's contract money
Correct answer The correct answer is D. escrow holder of a consumer's contract money
When a licensed contractor obtains a payment and performance bond, which of the following would be one of the things the contractor has covered? permits rentals overhead materials
Correct answer The correct answer is D. materials
A Notice to Owner provides information to protect the owner against: aulty work incomplete work material changes mechanics' liens
Correct answer The correct answer is D. mechanics' liens
A preliminary lien notice for a home improvement project is used to: obtain a building permit obtain financing for the project protect the contractor against financial loss notify owners of monies owed and insure payment to the supplier or subcontractor
Correct answer The correct answer is D. notify owners of monies owed and insure payment to the supplier or subcontractor
When there is a third party lender, the rescission provisions of Business and Professions Code 7163 Truth in Lending Act apply, if the: improvement contract is sold by a salesperson funds are to be provided by any government agency value of the home improvement contract exceeds $10,000 obtainment of a loan is a condition precedent to the home improvement contract
Correct answer The correct answer is D. obtainment of a loan is a condition precedent to the home improvement contract
To ensure a clear understanding of the contractual parties' commitments prior to signing the contract, both parties should critically review the: suppliers list building permits requests for variance plans and specifications
Correct answer The correct answer is D. plans and specifications
When is the contractor required to provide the owner with the Notice to Owner? at groundbreaking at final inspection after first progress payments prior to entering into the contract
Correct answer The correct answer is D. prior to entering into the contract
Which of the following should appear on the final construction plans and specifications? supplier's approval subcontractor's approval city building inspector's signature property owner's approval and signature
Correct answer The correct answer is D. property owner's approval and signature
All salespersons who solicit home improvements must be: insured with a surety company licensed by a general contractor certified by the Contractors State License Board registered with the Contractors State License Board
Correct answer The correct answer is D. registered with the Contractors State License Board
The 3-day notice of cancellation is required on the home improvement contract at the: job walk execution of loan time of the proposal signing of the contract
Correct answer The correct answer is D. signing of the contract
Following the completion of a home improvement project of a major phase of construction and upon payment, who is responsible for signing a labor lien release? homeowner contractor each worker subcontractor
Correct answer The correct answer is D. subcontractor
If a customer initials the arbitration clause of a contract, they are indicating they will: sue in superior court be reimbursed for legal expenses have the district attorney litigate the matter submit a dispute to resolution outside of the court system
Correct answer The correct answer is D. submit a dispute to resolution outside of the court system
A Notice to Owner is required to be given to the owner prior to: starting the job completion of the job the job inspection by the city the owner's signing of the contract
Correct answer The correct answer is D. the owner's signing of the contract
Following the completion of a home improvement project phase and upon making payment, what type of lien release should the owner require? partial release full lien release conditional lien release unconditional waiver and release
Correct answer The correct answer is D. unconditional waiver and release
Failure to substantially commence work within 20 days from the approximate starting date specified in the contract, without lawful excuse is a: Class C misdemeanor violation of the performance bond violation of the Home Solicitation Sales Act violation of the Business and Professions Code
Correct answer The correct answer is D. violation of the Business and Professions Code
Waiver to the Business and Professions Code Section 7163 Truth in Lending Act rescission is permitted if the: weather prohibits starting on time contract work is extended for additions contractor does not agree with the buyer on workmanship waiver is written and signed by the owner of the property and the work is for emergency repairs
Correct answer The correct answer is D. waiver is written and signed by the owner of the property and the work is for emergency repairs
A contractor must be licensed: to improve structures on his or her own property when entering into a home improvement contract under $500 when contracting work for $300 or more, including labor and materials when contracting work for $500 or more, including labor and materials
Correct answer The correct answer is D. when contracting work for $500 or more, including labor and materials
The Contractors State License Board's arbitration program provides an arbitrator and one expert witness: free of charge at shared expense at nominal expense and one licensee attorney
The correct answer is A. free of charge
When asbestos is found in a home improvement project, who is responsible for the abatement? homeowner contractor city inspector Department of Building Safety
The correct answer is A. homeowner
A licensed contractor signs a home improvement contract for $19,800. What is the maximum down payment the contractor may receive? $1,000 $1,500 $1,980 $2,000
The correct answer is A. $1,000
Within how many business days, after the signing of a home improvement contract, is the buyer allowed to cancel? 3 business days 7 business days 10 business days 15 business days
The correct answer is A. 3 business days
If a contractor includes a provision for private arbitration in a printed contract, it must be set out in at least: 8-point roman boldface type in contrasting red print 8-point roman boldface type in black print 10-point italic boldface type in red print 10-point roman type in black print
The correct answer is A. 8-point roman boldface type in contrasting red print
A contractor must provide the homeowner who contracts for a home improvement project with a: Notice to Owner list of material suppliers copy of all insurance documents list of other projects completed
The correct answer is A. Notice to Owner
When a job requires the contractor to pressure wash paint from an older home, it is best for the contractor to inform the homeowner about the possible existence of lead paint material issues: at their first meeting only if lead is discovered at the completion of the job at the signing of the contract
The correct answer is A. at their first meeting
When remodeling an older home it is best for the contractor to inform the homeowner about the possible existence of asbestos materials: at their first meeting as the job progresses when the contract is signed at the completion of the job
The correct answer is A. at their first meeting
When there is a third party lender, the contract is unenforceable against the buyer per the Business and Professions Code 7163 Truth in Lending Act, if the: buyer rescinds the loan within 3 business days funding is provided by a government loan or grant home improvement contract is sold by a salesperson owner decides that a competing contractor will finish the remaining work for less than the amount stated in the contract
The correct answer is A. buyer rescinds the loan within 3 business days
Including specific layouts, sizes, locations and materials on plans ensures a clear understanding of the contracted work to be done for the agreement of the: contractor and owner contractor and lender building inspector and lender architect and building inspector
The correct answer is A. contractor and owner
The Contractors State License Board has authority to enforce the: contractor's warranties manufacturer's warranties lender's rates of interest consumer's change of plans
The correct answer is A. contractor's warranties
Home improvement contracts must be consented to by both parties: freely under duress after work is started before the price is established
The correct answer is A. freely
When a home improvement contractor discovers a hazardous material, the contractor must inform the: homeowner local inspector state Environmental Protection Agency federal Environmental Protection Agency
The correct answer is A. homeowner
When a licensed contractor obtains a payment and performance bond, which of the following would be one of the things the contractor has covered? labor equipment personal injury property damage
The correct answer is A. labor
The plans and specifications of a home improvement project usually describe which of the following? layout sizes liquidated damages consent to arbitrate neighborhood regulations
The correct answer is A. layout sizes
A home improvement contract can be canceled when there is consent through fraud by: the other party the homeowner only the contractor only a government agency
The correct answer is A. the other party
