Contractors License Regulations Quiz

Questions and Answers

Who does not need a contractor's license?

Someone who does certain construction on commercial agricultural property.

The contractor surety bond necessary for most contractors to obtain their license is in the amount of?

$15,000

When licensed as a sole proprietor, the license belongs to?

The Company

An inactive license must be renewed every 4 years.

True Signup and view all the answers

How many classifications can an RME apply for?

As many classifications as he or she can qualify for. Signup and view all the answers

A prime contractor shall pay his or her subcontractors?

Within 7 days of receipt of each progress payment. Signup and view all the answers

When does the fictitious name statement need to be filed?

Before conducting business. Signup and view all the answers

During a declared state of emergency, how much may a contractor increase his prices?

10% above the price just prior to the declared state of emergency. Signup and view all the answers

Which name styles are not permitted for John Burroughs, the sole proprietor of a plumbing company?

John Burroughs Inc. Signup and view all the answers

Active licenses must be registered every _ and inactive licenses should be registered every _

2 years, 4 years Signup and view all the answers

What should you do in order to receive an active license number after passing the state license test?

Pay your registration fees, submit a complete asbestos open book examination, show proof of workers comp insurance or submit a waiver of workers comp, and submit your 'pass' letter. Signup and view all the answers

Which of the following may qualify for more than one contractor's license?

Sole proprietor. Signup and view all the answers

How many classifications may a qualifier add to a license?

As many qualifications as he qualifies for. Signup and view all the answers

Which of the following may be protected by a contract bond? (Select all that apply)

A client damaged by the contractor's violation of the contract. Signup and view all the answers

What is the best way for the homeowner to protect his property from having a lien placed on his property when signing a home improvement contract?

Require the prime contractor to supply a performance and payment bond. Signup and view all the answers

CSLB established the State Wide Investigative Fraud Team (SWIFT). What authority does CSLB's SWIFT have?

Cite those not properly licensed. Signup and view all the answers

Preliminary Notice is part of the Home Improvement Contract.

False Signup and view all the answers

What is the purpose of the Preliminary Notice?

Assert mechanic liens and stop notice rights. Signup and view all the answers

Preliminary Notices are filed?

Within 20 days from first furnishing labor or materials. Signup and view all the answers

What is one of the most important practices to follow to avoid disagreements with an owner?

Include a detailed description of the project and everything that is to be done in the contract. Signup and view all the answers

Why should a contractor keep a record of all Change Orders?

State law requires it. Signup and view all the answers

Who can file a Stop Notice?

A subcontractor contracted to do a specialty trade and was not paid. Signup and view all the answers

Who signs a 'Joint Control Agreement'?

The lender, the property owner, and the prime contractor. Signup and view all the answers

How long will the CSLB hold a contractor responsible for observable defects?

4 years Signup and view all the answers

The CSLB offers a free voluntary arbitration program for disputes alleged damages between?

$15,000 and $50,000 Signup and view all the answers

If a contractor includes a provision in a contract for the use of private arbitration, who will bear the cost of a private arbitrator?

The owner and contractor will split the cost of the arbitration. Signup and view all the answers

A contractor is liable for the entire term of the written warranty if a patio cover begins to deteriorate after 5 years.

True Signup and view all the answers

Who is responsible for providing the owner a copy of the 'Notice of Cancellation'?

The prime contractor. Signup and view all the answers

In which circumstances must you provide your license number?

All contracts, all advertising, all preliminary notices. Signup and view all the answers

Who is responsible for determining when the project is complete?

The owner/his agent. Signup and view all the answers

Stop notices are bonded for?

1 & 1/4 the amount of the claim. Signup and view all the answers

What should the print typeface and point size be in drawing up 'Home Improvement Contracts' unless specified otherwise?

10-pt typeface and the headers should be at least 10-pt boldface. Signup and view all the answers

The costs of running your business including office expenses etc., is called?

Overhead expenses. Signup and view all the answers

Direct Labor is comprised of?

Cost for labor and payroll taxes. Signup and view all the answers

Which of the following is an asset on the balance sheet? (Select all that apply)

Inventory Signup and view all the answers

Direct costs consist of?

Direct labor, direct labor burden, direct materials, and other direct costs. Signup and view all the answers

Good cash flow is achieved when current liabilities are less than current assets.

True Signup and view all the answers

Equity is?

Total assets less total liabilities. Signup and view all the answers

Networking capital is?

The difference between current assets and current liabilities. Signup and view all the answers

If a contractor estimates his direct costs to be $1,000, with overhead at 25% and a 5% profit, what bid should he submit?

$1,428.57 (1,000/.70) Signup and view all the answers

If a contractor estimates labor and materials to be $2,500, allowing for 15% overhead and 5% profit, what should the total bid be?

$3,125 (2,500/.8) Signup and view all the answers

When business is bad, which of the following should contractors do?

Bid on jobs only if you can make a profit. Signup and view all the answers

Unresolved conflicts will result in extra costs and loss of time for which of the following?

The client, contractor, and state. Signup and view all the answers

If you're working in a difficult phase of a project and the owner complains, what should you do?

Stop what you are doing and deal with the owner's complaint. Signup and view all the answers

Subcontractors are selected on the basis of?

Their availability to perform the job well, on time, and their cost. Signup and view all the answers

Which of the following best helps the contractor bring together materials and labor at the proper time?

Critical Path Method. Signup and view all the answers

What is the advantage of always using the same method to calculate your bid?

It saves time. Signup and view all the answers

If you are working on a critical phase of a project and the owner complains about the windows, what do you do?

Acknowledge the complaint and tell the owner you'll be right with him as soon as you're finished with what you're working on. Signup and view all the answers

Study Notes

Contractors License Requirements

Individuals doing construction on commercial agricultural property do not need a contractor's license.
A contractor surety bond, required for most contractors, has an amount set at $15,000.
For a sole proprietor, the license is tied to the company itself.
Inactive licenses must be renewed every 4 years, active licenses every 2 years.

Classifications and Licensing

An RME (Responsible Managing Employee) can apply for multiple classifications as long as qualified.
Contractors must pay subcontractors within 7 days of receiving progress payments.
A fictitious name statement must be filed before starting business under a fictitious name.

Pricing Regulations

During a declared state of emergency, contractors can increase prices by 10% over the pre-emergency price.
Home improvement contracts should include a performance and payment bond to protect the homeowner from liens.

Notifications and Contracts

Preliminary Notices must be filed within 20 days of first providing labor or materials and assert mechanic lien rights.
Important aspects of a home improvement contract include providing a detailed project description to prevent disputes.

Record Keeping and Accountability

Contractors are required by law to keep records of all change orders.
The prime contractor must provide the owner with a "Notice of Cancellation".

Payment and Disputes

Stop Notices can be filed by subcontractors who were contracted and not paid for their work.
CSLB (Contractors State License Board) holds a contractor responsible for observable defects for up to 4 years.

Financial Management

Direct costs encompass labor, labor burden, materials, and other direct costs while overhead expenses cover business running costs.
Good cash flow is indicated when current assets exceed current liabilities, and equity is calculated as total assets minus total liabilities.

Bidding Practices

Bids should be submitted factoring direct costs, desired overhead, and profit margins; for instance, a direct cost of $1,000 with 25% overhead and 5% profit leads to a bid of approximately $1,428.57.
When facing declining business, contractors should only bid on profitable jobs.

Project Management

Selecting subcontractors should be based on skill, availability, and cost efficiency.
The Critical Path Method aids contractors in scheduling materials and labor effectively.

Conflict Resolution

Unresolved conflicts can lead to increased costs and delays affecting clients, contractors, and state resources.
In critical phases of a project, contractor responses to owner complaints should acknowledge concerns while managing project continuity.

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Description

Test your knowledge on contractors' licensing requirements and regulations. This quiz covers essential topics such as contractor surety bonds, licensing classifications, pricing during emergencies, and contract notifications. Perfect for prospective contractors and those interested in construction law.

Contractors License Regulations Quiz

Questions and Answers

Who does not need a contractor's license?

The contractor surety bond necessary for most contractors to obtain their license is in the amount of?

When licensed as a sole proprietor, the license belongs to?

An inactive license must be renewed every 4 years.

How many classifications can an RME apply for?

A prime contractor shall pay his or her subcontractors?

When does the fictitious name statement need to be filed?

During a declared state of emergency, how much may a contractor increase his prices?

Which name styles are not permitted for John Burroughs, the sole proprietor of a plumbing company?

Active licenses must be registered every _____ and inactive licenses should be registered every _____

What should you do in order to receive an active license number after passing the state license test?

Which of the following may qualify for more than one contractor's license?

How many classifications may a qualifier add to a license?

Which of the following may be protected by a contract bond? (Select all that apply)

What is the best way for the homeowner to protect his property from having a lien placed on his property when signing a home improvement contract?

CSLB established the State Wide Investigative Fraud Team (SWIFT). What authority does CSLB's SWIFT have?

Preliminary Notice is part of the Home Improvement Contract.

What is the purpose of the Preliminary Notice?

Preliminary Notices are filed?

What is one of the most important practices to follow to avoid disagreements with an owner?

Why should a contractor keep a record of all Change Orders?

Who can file a Stop Notice?

Who signs a 'Joint Control Agreement'?

How long will the CSLB hold a contractor responsible for observable defects?

The CSLB offers a free voluntary arbitration program for disputes alleged damages between?

If a contractor includes a provision in a contract for the use of private arbitration, who will bear the cost of a private arbitrator?

A contractor is liable for the entire term of the written warranty if a patio cover begins to deteriorate after 5 years.

Who is responsible for providing the owner a copy of the 'Notice of Cancellation'?

In which circumstances must you provide your license number?

Who is responsible for determining when the project is complete?

Stop notices are bonded for?

What should the print typeface and point size be in drawing up 'Home Improvement Contracts' unless specified otherwise?

The costs of running your business including office expenses etc., is called?

Direct Labor is comprised of?

Which of the following is an asset on the balance sheet? (Select all that apply)

Direct costs consist of?

Good cash flow is achieved when current liabilities are less than current assets.

Equity is?

Networking capital is?

If a contractor estimates his direct costs to be $1,000, with overhead at 25% and a 5% profit, what bid should he submit?

If a contractor estimates labor and materials to be $2,500, allowing for 15% overhead and 5% profit, what should the total bid be?

When business is bad, which of the following should contractors do?

Unresolved conflicts will result in extra costs and loss of time for which of the following?

If you're working in a difficult phase of a project and the owner complains, what should you do?

Subcontractors are selected on the basis of?

Which of the following best helps the contractor bring together materials and labor at the proper time?

What is the advantage of always using the same method to calculate your bid?

If you are working on a critical phase of a project and the owner complains about the windows, what do you do?

Study Notes

Contractors License Requirements

Classifications and Licensing

Pricing Regulations

Notifications and Contracts

Record Keeping and Accountability

Payment and Disputes

Financial Management

Bidding Practices

Project Management

Conflict Resolution

Studying That Suits You

Description

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