Podcast
Questions and Answers
Who does not need a contractor's license?
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?
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?
When licensed as a sole proprietor, the license belongs to?
The Company
An inactive license must be renewed every 4 years.
An inactive license must be renewed every 4 years.
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How many classifications can an RME apply for?
How many classifications can an RME apply for?
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A prime contractor shall pay his or her subcontractors?
A prime contractor shall pay his or her subcontractors?
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When does the fictitious name statement need to be filed?
When does the fictitious name statement need to be filed?
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During a declared state of emergency, how much may a contractor increase his prices?
During a declared state of emergency, how much may a contractor increase his prices?
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Which name styles are not permitted for John Burroughs, the sole proprietor of a plumbing company?
Which name styles are not permitted for John Burroughs, the sole proprietor of a plumbing company?
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Active licenses must be registered every _____ and inactive licenses should be registered every _____
Active licenses must be registered every _____ and inactive licenses should be registered every _____
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What should you do in order to receive an active license number after passing the state license test?
What should you do in order to receive an active license number after passing the state license test?
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Which of the following may qualify for more than one contractor's license?
Which of the following may qualify for more than one contractor's license?
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How many classifications may a qualifier add to a license?
How many classifications may a qualifier add to a license?
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Which of the following may be protected by a contract bond? (Select all that apply)
Which of the following may be protected by a contract bond? (Select all that apply)
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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?
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?
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CSLB established the State Wide Investigative Fraud Team (SWIFT). What authority does CSLB's SWIFT have?
CSLB established the State Wide Investigative Fraud Team (SWIFT). What authority does CSLB's SWIFT have?
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Preliminary Notice is part of the Home Improvement Contract.
Preliminary Notice is part of the Home Improvement Contract.
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What is the purpose of the Preliminary Notice?
What is the purpose of the Preliminary Notice?
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Preliminary Notices are filed?
Preliminary Notices are filed?
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What is one of the most important practices to follow to avoid disagreements with an owner?
What is one of the most important practices to follow to avoid disagreements with an owner?
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Why should a contractor keep a record of all Change Orders?
Why should a contractor keep a record of all Change Orders?
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Who can file a Stop Notice?
Who can file a Stop Notice?
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Who signs a 'Joint Control Agreement'?
Who signs a 'Joint Control Agreement'?
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How long will the CSLB hold a contractor responsible for observable defects?
How long will the CSLB hold a contractor responsible for observable defects?
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The CSLB offers a free voluntary arbitration program for disputes alleged damages between?
The CSLB offers a free voluntary arbitration program for disputes alleged damages between?
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If a contractor includes a provision in a contract for the use of private arbitration, who will bear the cost of a private arbitrator?
If a contractor includes a provision in a contract for the use of private arbitration, who will bear the cost of a private arbitrator?
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A contractor is liable for the entire term of the written warranty if a patio cover begins to deteriorate after 5 years.
A contractor is liable for the entire term of the written warranty if a patio cover begins to deteriorate after 5 years.
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Who is responsible for providing the owner a copy of the 'Notice of Cancellation'?
Who is responsible for providing the owner a copy of the 'Notice of Cancellation'?
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In which circumstances must you provide your license number?
In which circumstances must you provide your license number?
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Who is responsible for determining when the project is complete?
Who is responsible for determining when the project is complete?
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Stop notices are bonded for?
Stop notices are bonded for?
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What should the print typeface and point size be in drawing up 'Home Improvement Contracts' unless specified otherwise?
What should the print typeface and point size be in drawing up 'Home Improvement Contracts' unless specified otherwise?
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The costs of running your business including office expenses etc., is called?
The costs of running your business including office expenses etc., is called?
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Direct Labor is comprised of?
Direct Labor is comprised of?
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Which of the following is an asset on the balance sheet? (Select all that apply)
Which of the following is an asset on the balance sheet? (Select all that apply)
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Direct costs consist of?
Direct costs consist of?
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Good cash flow is achieved when current liabilities are less than current assets.
Good cash flow is achieved when current liabilities are less than current assets.
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Equity is?
Equity is?
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Networking capital is?
Networking capital is?
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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 his direct costs to be $1,000, with overhead at 25% and a 5% profit, what bid should he submit?
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If a contractor estimates labor and materials to be $2,500, allowing for 15% overhead and 5% profit, what should the total bid be?
If a contractor estimates labor and materials to be $2,500, allowing for 15% overhead and 5% profit, what should the total bid be?
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When business is bad, which of the following should contractors do?
When business is bad, which of the following should contractors do?
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Unresolved conflicts will result in extra costs and loss of time for which of the following?
Unresolved conflicts will result in extra costs and loss of time for which of the following?
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If you're working in a difficult phase of a project and the owner complains, what should you do?
If you're working in a difficult phase of a project and the owner complains, what should you do?
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Subcontractors are selected on the basis of?
Subcontractors are selected on the basis of?
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Which of the following best helps the contractor bring together materials and labor at the proper time?
Which of the following best helps the contractor bring together materials and labor at the proper time?
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What is the advantage of always using the same method to calculate your bid?
What is the advantage of always using the same method to calculate your bid?
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If you are working on a critical phase of a project and the owner complains about the windows, what do you do?
If you are working on a critical phase of a project and the owner complains about the windows, what do you do?
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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.
