Law Test 5 Flashcards
(107 cards)
1
Q
A swimming pool contract must include which of the following?
a) Contract Bond
b) plan and scale drawings
c) Performance Bond
d) surety company’s name and address
A
b) plan and scale drawings
2
Q
The 3-day notice of cancellation is required on the home improvement contract at the: a) job walk
b) execution of loan
c) signing of the contract
d) time of the proposal
A
c) signing of the contract
3
Q
A home improvement contract can be canceled when there is consent through fraud by:
a) the homeowner only
b) the contractor only
c) a government agency
d) the other party
A
d) the other party
3
Q
A notice of completion can be withheld because of a dispute over the finished product with the:
a) engineer b) inspector
c) architect d) owner
A
d) owner
4
Q
A builder’s construction control service primarily acts as an:
a) escrow holder of a consumer’s contract money
b) payroll service
c) independent cost analyst
d) architect reference service
A
a) escrow holder of a consumer’s contract money
5
Q
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:
a) funding is provided by a government loan or grant
b) buyer rescinds the loan within 3 business days
c) home improvement contract is sold by a salesperson
d) owner decides that a competing contractor will finish the remaining work for less than the amount stated in the contract
A
b) buyer rescinds the loan within 3 business days
6
Q
When asbestos is found in a home improvement project, who is responsible for the abatement?
a) contractor
b) homeowner
c) city inspector
d) Department of Building Safety
A
b) homeowner
7
Q
When there is a third party lender, a contractor can enforce the home improvement contract after 3 business days from the:
a) date the loan and the contract are completed and accepted by the buyer
b) salesperson turning in a signed contract
c) contractor and buyer signing the contract
d) buyer submitting the loan package to the lender
A
a) date the loan and the contract are completed and accepted by the buyer
7
Q
Change orders are required when the:
a) contract amount is changed
b) contractor’s personnel are changed
c) material suppliers are changed
d) contract start day is changed
A
a) contract amount is changed
8
Q
Information on licensing and mechanics’ liens must be in:
a) 10-point italic type
b) 12-point roman italic bold type
c) 10-point roman boldface type
d) 12-point roman boldface red type
A
c) 10-point roman boldface type
8
Q
A home improvement salesperson must put his or her:
a) name on the loan papers
b) name on the city inspection card
c) registration number on the completion notice
d) registration number on the contract
A
d) registration number on the contract
9
Q
A joint control allows the homeowner of a home improvement contract to control with a third party:
a) job inspections
b) construction time lines
c) construction funds
d) materials, shapes and sizes
A
c) construction funds
10
Q
A Notice to Owner is required to be given to the owner prior to:
a) the owner’s signing of the contract
b) starting the job
c) completion of the job
d) the job inspection by the city
A
a) the owner’s signing of the contract
11
Q
When a home improvement contractor discovers a hazardous material, the contractor must inform the:
a) local inspector
b) homeowner
c) State Environmental Protection Agency
d) Federal Environmental Protection Agency
A
b) homeowner
12
Q
Truth in Lending Act rescission rights apply when:
a) a nonpurchase lien or security interest is taken in the consumer’s principal dwelling
b) any loan is signed for any home improvement work
c) the dollar amount of the contract exceeds $20,000
d) a home improvement salesperson procured the contract
A
a) a nonpurchase lien or security interest is taken in the consumer’s principal dwelling
13
Q
Prior to signing a home improvement contract, a critical review of the plans and specifications is required by the:
a) homeowner and lender
b) contractor and lender
c) building inspector and contractor
d) homeowner and contractor
A
d) homeowner and contractor
14
Q
Which of the following must a home improvement contract contain? a) permit number
b) license bond number
c) local building department requirements
d) approximate starting date
A
d) approximate starting date
15
Q
Time and materials contracts must be written with a fixed price whenever the cost of the contract could exceed:
a) $100
b) $200
c) $500
d) $300
A
c) $500
15
Q
When lead paint is found in a home improvement project, who is responsible for the abatement?
a) contractor
b) homeowner
c) city inspector
d) Department of Building Safety
A
b) homeowner
16
Q
What type of lien release is required upon completion of a home improvement contract and payment?
a) temporary waiver
b) unconditional waiver and release
c) conditional release
d) preliminary waiver and release
A
b) unconditional waiver and release
17
Q
If a home improvement salesperson’s commission was 10%, what would the commission be on a $10,000 job with a $1000 deposit?
a) $1000
b) $10
c) $100
d) $110
A
a) $1000
18
Q
A home improvement salesperson’s registration must be renewed every:
a) job
b) year
c) four years
d) two years
A
d) two years
19
Q
A joint control company is:
a) a service which acts as an escrow holder for construction funds
b) the primary construction lender
c) owned by the general contractor
d) the mortgage company for the homeowner
A
a) a service which acts as an escrow holder for construction funds
19
Q
Who must sign the 3-day notice of cancellation in order to cancel a home improvement contract?
a) lender
b) contractor
c) homeowner
d) building inspector
A
c) homeowner
20
Waiver to the Business and Professions Code Section 7163 Truth in Lending Act rescission is permitted if the:
a) waiver is written and signed by the owner of the property and the work is for emergency repairs
b) weather prohibits starting on time
c) contract work is extended for additions
d) contractor does not agree with the buyer on workmanship
a) waiver is written and signed by the owner of the property and the work is for emergency repairs
21
To clearly describe the contracted home improvement work, the contract should include the:
a) owners photographs
b) pictures of neighboring buildings
c) history of similar projects completed by the contractor
d) plans, specifications and materials to be used
d) plans, specifications and materials to be used
22
A contractor must provide the homeowner who contracts for a home improvement project with a:
a) list of material suppliers
b) Notice to Owner
c) copy of all insurance documents
d) list of other projects completed
b) Notice to Owner
23
Plans and specifications require critical review by the:
a) contractor and owner to establish an agreement on the work descriptions
b) owner to check all the subcontractors
c) owner to check all the material suppliers
d) contractor and owner to establish all the payment schedules
a) contractor and owner to establish an agreement on the work descriptions
24
The plans and specifications of a home improvement project usually describe which of the following?
a) Liquidated damages
b) consent to arbitrate
c) neighborhood regulations
d) layout sizes
d) layout sizes
25
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?
a) roofing job
b) landscaping job
c) heating and air conditioning job
d) swimming pool job
d) swimming pool job
26
A joint control is a:
a) financial advisor
b) builder's construction control service
c) joint personnel advisor
d) building inspection control service
b) builder's construction control service
27
Contracts should be freely exercised by:
a) the homeowner only
b) the contractor only
c) both parties to the contract
d) either party's attorney
c) both parties to the contract
28
For which of the following is a Home Improvement Certificate needed by a licensed contractor?
a) landscaping
b) a bathroom remodel
c) extending a driveway
d) all of the above
d) all of the above
29
If a customer initials the arbitration clause of a contract, they are indicating they will:
a) submit a dispute to resolution outside of the court system
b) sue in superior court
c) be reimbursed for legal expenses
d) have the district attorney litigate the matter
a) submit a dispute to resolution outside of the court system
30
Which of the following should appear on the final construction plans and specifications?
a) property owner's approval and signature
b) supplier's approval
c) subcontractor's approval
d) city building inspector's signature
a) property owner's approval and signature
31
A licensed contractor signs a home improvement contract for $19,800. What is the maximum down payment the contractor may receive?
a) $980
b) $1000
c) $1980
d) $2000
b) $1000
32
After a hazardous material abatement has been completed on a home improvement project, and prior to resuming work, the:
a) lender should be notified
b) building inspector should be notified
c) Environmental Protection Agency should be notified by the contractor
d) contractor should be notified by the owner in writing
d) contractor should be notified by the owner in writing
33
When a licensed contractor obtains a payment and performance bond, which of the following would be one of the things the contractor has covered?
a) equipment
b) labor
c) personal injury
d) property damage
b) labor
34
Under proper circumstances, the Contractors State License Board will arbitrate home improvement contract disputes:
a) of any amount
b) over $25,000 only
c) between $5,000 and $50,000 only
d) up to $50,000 only
d) up to $50,000 only
35
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:
a) homeowner
b) licensee
c) subcontractors
d) material suppliers
b) licensee
36
Plans and specifications pre-approved by the contractor and owner may receive the final approval after the contract has been signed only when:
a) construction insurance must be acquired
b) subcontractor availability could impact final design
c) the plans and specifications need to be revised
d) plans and specifications development costs are part of the contract
c) the plans and specifications need to be revised
37
Payment and performance bond information is contained within the: (A) loan documents (B) warranty information (C) Notice to Owner (D) contractor's license bond
a) loan documents
b) warranty information
c) Notice to Owner
d) contractor's license bond
c) Notice to Owner
38
If a contractor includes a provision for private arbitration in a printed contract, it must be set out in at least:
a) 8-point roman boldface type in black print
b) 8-point roman boldface type in contrasting red print
c) 10-point italic boldface type in red print d) 10-point roman type in black print
b) 8-point roman boldface type in contrasting red print
38
When contracting for a home improvement, the contract is an agreement between the contractor and the:
a) tenant
b) homeowner
c) salesperson
d) A or B
d) A or B
39
When there is a third party lender, once the transaction is completed and accepted by the homeowner, the homeowner may cancel:
a) until the first draw
b) within 5 business days
c) within 3 business days
d) until the job is started
c) within 3 business days
39
The Contractors State License Board's arbitration program provides an arbitrator and one expert witness:
a) at shared expense
b) free of charge
c) and one licensee attorney d) and one licensee attorney
b) free of charge
40
A home improvement salesperson who sells a home improvement project must include what information on the contract?
a) material suppliers' names
b) salesperson's insurance company name
c) salesperson's name and certification number
d) salesperson's name and registration number
d) salesperson's name and registration number
41
The contractor's disciplinary disclosure notice must be provided to consumers:
a) prior to completion of job
b) before the license is suspended
c) after signing a contract and before 3 business days pass
d) prior to entering into a contract
d) prior to entering into a contract
41
Within how many business days, after the signing of a home improvement contract, is the buyer allowed to cancel?
a) 1 business days
b) 3 business days
c) 7 business days
d) 10 business days
b) 3 business days
42
In contract consent, duress or threats of harm CAN be committed by:
a) either party to the transaction
b) only the owner
c) the joint control
d) only the contractor
a) either party to the transaction
43
If the total cost of a project exceeds $500, a contractor must:
a) obtain a contract bond
b) have a performance and payment bond
c) have a written contract
d) have a safety environmental inspection
c) have a written contract
44
Who of the following may require the contractor to obtain a performance and payment bond?
a) lender
b) tenant
c) subcontractor
d) Contractors State License Board
b) tenant
45
Who should review the home improvement contract with the owner before signing a contract?
a) lender
b) plan checker
c) contractor
d) city inspector
c) contractor
46
When a homeowner requests that the contractor to obtain a payment and performance bond, the owner is wanting coverage for:
a) equipment, tools and supplies
b) materials, labor and supplies
c) personal injury, overhead and equipment
d) property damage, personal injury and acts of God
b) materials, labor and supplies
47
When a licensed contractor obtains a payment and performance bond, which of the following would be one of the things the contractor has covered?
a) materials
b) permits
c) rentals
d) overhead
a) materials
48
Consent to a home improvement contract is given by:
a) the property owner only
b) either spouse in writing
c) both the contractor and an attorney
d) both parties to the contract
d) both parties to the contract
49
A down payment for a home improvement contract can be accepted by the contractor up to:
a) $1000 or 10% of the contract amount, whichever is less
b) 20% of the contract, if it is over $25,000
c) 30% of the contract, if there are special orders
d) any amount the owner and the contractor agree upon
a) $1000 or 10% of the contract amount, whichever is less
50
A licensed contractor signs a home improvement contract for $9500. What is the maximum down payment the contractor may receive?
a) $475 b) $500 c) $1000 d) $950
d) $950
51
To ensure a clear understanding of the contractual parties' commitments prior to signing the contract, both parties should critically review the:
a) plans and specifications
b) suppliers list
c) building permits
d) requests for variance
a) plans and specifications
52
When is the contractor required to provide the owner with the Notice to Owner?
a) prior to entering into the contract
b) at groundbreaking
c) at final inspection
d) after first progress payments
a) prior to entering into the contract
53
The Truth in Lending Act applies to home improvements when:
a) a security interest in the home applies
b) the dwelling is a rental
c) the dwelling is over 10 years old
d) the contracted project is over $10,000
a) a security interest in the home applies
54
Following the completion of a home improvement project phase and upon making payment, what type of lien release should the owner require?
a) unconditional waiver and release
b) partial release
c) full lien release
d) conditional lien release
a) unconditional waiver and release
55
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:
a) top and work on a correction
b) continue the work if variations are only minor
c) stop the job and inform the owner or his agent
d) stop the job and inform the Building Department
c) stop the job and inform the owner or his agent
56
Due to unforeseen complications, the contractor must increase the contract price, therefore the contractor:
a) should get a loan from the bank
b) may request assistance from the subcontractor
c) should request the building inspector to revise the specifications
d) and the owner must agree to a written and signed change order
d) and the owner must agree to a written and signed change order
57
Change orders to a home improvement contract are required to be signed by the:
a) attorney
b) inspector
c) general contractor's subcontractors
d) homeowner and contractor
d) homeowner and contractor
58
How long can a licensed contractor be liable for latent defects?
a) 4 years
b) 5 years
c) 10 years
d) It depends on the manufacturers warranty provided with the material
c) 10 years
59
The Contractors State License Board has authority to enforce the:
a) manufacturer's warranties
b) contractor's warranties
c) lender's rates of interest
d) consumer's change of plans
b) contractor's warranties
60
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?
a) agreed contract price
b) lien notices
c) arbitration clause notice
d) schedule of payments and specifications
b) lien notices
61
A Notice to Owner provides information to protect the owner against:
a) mechanics' liens
b) faulty work
c) incomplete work
d) material changes
a) mechanics' liens
62
When remodeling an older home it is best for the contractor to inform the homeowner about the possible existence of asbestos materials:
a) as the job progresses
b) at their first meeting
c) when the contract is signed
d) at the completion of the job
b) at their first meeting
63
The 3-day notice of cancellation for a home improvement contract is also known as an: a) shop notice
b) notice to correct
c) insufficient funds notice
d) right to rescind notice
d) right to rescind notice
64
What is the statute of limitations for a consumer's complaint on latent defects?
a) 2 Years
b) 4 Years
c) 7 Years
d) 10 years
d) 10 years
65
When there is a third party lender, once the transaction is completed and accepted by the homeowner, the homeowner may cancel:
a) within five working days
b) until the job is started
c) until the job phase is completed
d) within three business days
d) within three business days
66
A licensed contractor signs a home improvement contract for $25,000. What is the maximum down payment the contractor may receive?
a) $500
b) $950
c) $1000
d) $2500
c) $1000
67
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:
a) only if lead is discovered
b) at their first meeting
c) at the completion of the job
d) at the signing of the contract
b) at their first meeting
68
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?
a) 10 Days b) 15 Days c) 30 Days d) 20 days
d) 20 days
69
Failure to substantially commence work within 20 days from the approximate starting date specified in the contract, without lawful excuse is a:
a) violation of the Business and Professions Code
b) Class C misdemeanor
c) violation of the performance bond
d) violation of the Home Solicitation Sales Act
a) violation of the Business and Professions Code
70
A contractor must be licensed:
a) when contracting work for $500 of more, including labor and materials
b) to improve structures on his or her own property
c) when entering into a home improvement contract under $500
d) when contracting work for $300 or more, including labor and materials
a) when contracting work for $500 of more, including labor and materials
71
The contractor's disciplinary notice must be in all capital letters and in which of the following types?
a) 10-point roman boldface type-black print
b) 8-point italic type-red print
c) 8-point roman type-black print
d) 6-point roman boldface type-red print
a) 10-point roman boldface type-black print
72
After the contractor reviews the plans and specifications, what is needed to proceed?
a) itle insurance pre-lim
b) joint control company's agreement
c) property owner's signed approval
d) city building inspector's signature
c) property owner's signed approval
73
To be binding, change orders to a home improvement contract must contain which of the following?
a) date of original contract
b) contractor's surety company
c) signatures of both parties
d) signature of the homeowner only
c) signatures of both parties
74
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:
a) home improvement contract is sold by a salesperson
b) funding is provided by a government loan or grant
c) owner decides that a competing contractor will finish the remaining work for less than the amount stated in the contract
d) obtainment of a loan is a condition precedent to the contract and the loan is not accepted
d) obtainment of a loan is a condition precedent to the contract and the loan is not accepted
75
Consent to a home improvement contract must be given by both parties before:
a) the site is inspected
b) the contractor buys materials
c) any work is performed
d) the contractor hires subcontractors
c) any work is performed
76
At what point in time should a home improvement contractor specifically explain the plans and specifications to the homeowner?
a) before signing the contract
b) after starting the job
c) before the first pay draw
d) after signing the contract
a) before signing the contract
77
Prior to signing a home improvement contract, the homeowners shall be informed of the:
a) contractor's references
b) number of subcontractors on the job
c) amount of money the contractor allowed for overhead
d) contractor's name, address, and license number
d) contractor's name, address, and license number
78
Patent defects are:
a) readily observable flaws or faults
b) illegal contracts
c) the owner's responsibility d) the lender's responsibility
a) readily observable flaws or faults
79
A completion date is enforceable only when it is written:
a) regardless of labor availability
b) regardless of material availability
c) without regard for conditions that might prevail
d) and reasonable to contractual parties
d) and reasonable to contractual parties
80
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:
a) contractor and lender
b) contractor and owner
c) building inspector and lender
d) architect and building inspector
b) contractor and owner
81
In conducting a home improvement business, consent by both parties is required:
a) to give notices
b) to hire attorneys
c) on all contracts
d) to get business licenses
c) on all contracts
81
The Notice to Owner gives the owner information for protection from:
a) fee
b) liens
c) fines
d) additional charges
b) liens
82
Who is ultimately responsible for approving the plans and specifications for a home improvement contract?
a) architect
b) salesperson
c) contractor and owner
d) contractor and inspector
c) contractor and owner
83
When using the Contractor's State License Board's voluntary or mandatory arbitration, who pays for the costs?
a) homeowner
b) contractor
c) homeowner and contractor
d) Contractor's State License Board
d) Contractor's State License Board
84
When should contractor licensing and lien information be given to a homeowner who contracts for a home improvement project?
a) once the work has started
b) before the contract is signed
c) at the end of the project
d) when requested by the homeowner
b) before the contract is signed
85
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?
a) homeowner b) contractor
c) subcontractor d) each worker
d) each worker
86
According to the Truth in Lending Act, homeowners may rescind a transaction within three business days after the:
a) creditor's delivery of all the required notices
b) first payment
c) deposits made
d) homeowner evaluates the workmanship
a) creditor's delivery of all the required notices
87
For a security loan purchase, the owner's right to rescind the transaction lasts until midnight of the third business day after the:
a) start of construction
b) contractor's delivery of the required notice to rescind
c) creditor's delivery of the required notice to rescind
d) dated and signed home improvement contract is submitted to the owner for signature
c) creditor's delivery of the required notice to rescind
88
If a contractor includes an arbitration provision on a home improvement contract it must be set in at least:
a) 9-point boldface type print
b) 10-point italic boldface type print
c) 12-point boldface type print
d) 10-point roman boldface type print
d) 10-point roman boldface type print
89
The Contractors State License Board's arbitration program provides an arbitrator and one: a) licensed building inspector
b) expert witness
c) expert witness and one attorney
d) licensed "B" contractor and one attorney
b) expert witness
90
When there is a third party lender, the rescission provisions of Business and Professions Code 7163 Truth in Lending Act apply, if the:
a) obtainment of a loan is a condition precedent to the home improvement contract
b) improvement contract is sold by a salesperson
c) funds are to be provided by any government agency
d) value of the home improvement contract exceeds $10,000
a) obtainment of a loan is a condition precedent to the home improvement contract
91
All salespersons who solicit home improvements must be:
a) registered with the Contractors State License Board
b) insured with a surety company
c) licensed by a general contractor
d) certified by the Contractors State License Board
a) registered with the Contractors State License Board
92
A joint control company manages the:
a) time and materials costs
b) home improvement contract writing
c) contractor's personal business also
d) disbursement of construction funds
d) disbursement of construction funds
93
In a home improvement contract, a contractor must give the owner a schedule of the:
a) approximate starting and completion dates
b) payroll dates
c) material dates
d) anticipated inspection dates
a) approximate starting and completion dates
94
A preliminary lien notice for a home improvement project is used to:
a) notify owners of monies owed and insure payment to the supplier or subcontractor
b) obtain a building permit
c) obtain financing for the project
d) protect the contractor against financial loss
a) notify owners of monies owed and insure payment to the supplier or subcontractor
95
Home improvement contracts must be consented to by both parties:
a) under duress
b) freely
c) after work is started
d) before the price is established
b) freely
96
The contractor's disciplinary disclosure notice must be in capital letters and in which of the following types?
a) 10-point italic type
b) 10-point italic-red print
c) 6-point roman boldface type-red print
d) 8-point roman boldface type-red print
d) 8-point roman boldface type-red print
97
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?
a) Department of Labor
b) Contractors State License Board
c) County Recorders Office
d) City Planning and Building Department
c) County Recorders Office
98
A joint control is primarily the third party management of:
a) employees
b) job scheduling
c) construction inspections
d) construction funds
d) construction funds
