CSLB CA LAW AND BUSINESS EXAM LESSON 1
ACTUAL QUESTIONS AND ANSWERS 2025/2026 A+
GRADE.
Licensed contractor Requirements and Qualifying Individuals - CORRECT ANSWER - --Must be
18 Must have a valid social security #
Must hold 4 years trade experience (2 can be school)
Journeyman
Foreman
Contractor
Owner-Builder
Proof of WorkY(Cert. of Work Experience)
No License needed for - CORRECT ANSWER - -Work done under
$500 Wage paid employees (Excludes Boss)
Public Personnel (City Officials)
Court Officers acting w/in Scope of Office
Public Utilities under specified conditions
Oil/Gas Operations performed by owner/leaser
Owner-
Builders hiring licensed subcontractors cannot sell more than 4 structures during a 12 month period.
Owner-
Builders building/Improving existingYstructures on their own property if they : 1.Do the work themselves,
or 2. Use their own employees to do work.
- Home cannot be sold w/in 12 months after completed
Who does NOT need to be licensed? - CORRECT ANSWER - --Owner-
Builders improving principal place of residence (live there for more 12mo) can only sell 2 homes for ever
y 3 years
, Sale/Installation of product (Not to be fixed part of structure)
A seller of installed carpets holding a retail furniture dealers license, but who contracts for installation of
the carpet with a licensed carpet installer.
Security alarm company operators (licensed by Bureau of Security/Investigation Services) who install, ma
intain, monitor, sell, alter, or service alarm systems (fire alarm company operators must be CSLB Licensed
)
Persons who's activities consist only of installing satellite antenna systems on residential structures/prop
erty. here persons must be registered w/ Bureau of Electronic Appliance Repair
Contractors who are not licensed - CORRECT ANSWER - --
No penalties for not being licensed as long as your workYis under $500 (labor & materials) (Cannot be divi
ded into payments to avoid $500 mark)
CSLB has a Statewide Investigative Fraud Team that goes after unlicensed contractor that work above tha
t $500 limit.
First offense - typically get a misdemeanor carrying up to six months in jail and/or a $500 fine
Second offense : -20% of the contract price of the work
-$4,500 fine
-90 County days in jail
If the CSLB finds out that an individual is acting in the capacity of a contractor they will order a cease and
desist with the penalty up to $15,000 (you have 15 days to appeal in writing)
- CORRECT ANSWER --a felony
In a state of emergency of disaster anybody acting in the capacity of a licensed contractor can be charged
with - CORRECT ANSWER - --A Felony
ACTUAL QUESTIONS AND ANSWERS 2025/2026 A+
GRADE.
Licensed contractor Requirements and Qualifying Individuals - CORRECT ANSWER - --Must be
18 Must have a valid social security #
Must hold 4 years trade experience (2 can be school)
Journeyman
Foreman
Contractor
Owner-Builder
Proof of WorkY(Cert. of Work Experience)
No License needed for - CORRECT ANSWER - -Work done under
$500 Wage paid employees (Excludes Boss)
Public Personnel (City Officials)
Court Officers acting w/in Scope of Office
Public Utilities under specified conditions
Oil/Gas Operations performed by owner/leaser
Owner-
Builders hiring licensed subcontractors cannot sell more than 4 structures during a 12 month period.
Owner-
Builders building/Improving existingYstructures on their own property if they : 1.Do the work themselves,
or 2. Use their own employees to do work.
- Home cannot be sold w/in 12 months after completed
Who does NOT need to be licensed? - CORRECT ANSWER - --Owner-
Builders improving principal place of residence (live there for more 12mo) can only sell 2 homes for ever
y 3 years
, Sale/Installation of product (Not to be fixed part of structure)
A seller of installed carpets holding a retail furniture dealers license, but who contracts for installation of
the carpet with a licensed carpet installer.
Security alarm company operators (licensed by Bureau of Security/Investigation Services) who install, ma
intain, monitor, sell, alter, or service alarm systems (fire alarm company operators must be CSLB Licensed
)
Persons who's activities consist only of installing satellite antenna systems on residential structures/prop
erty. here persons must be registered w/ Bureau of Electronic Appliance Repair
Contractors who are not licensed - CORRECT ANSWER - --
No penalties for not being licensed as long as your workYis under $500 (labor & materials) (Cannot be divi
ded into payments to avoid $500 mark)
CSLB has a Statewide Investigative Fraud Team that goes after unlicensed contractor that work above tha
t $500 limit.
First offense - typically get a misdemeanor carrying up to six months in jail and/or a $500 fine
Second offense : -20% of the contract price of the work
-$4,500 fine
-90 County days in jail
If the CSLB finds out that an individual is acting in the capacity of a contractor they will order a cease and
desist with the penalty up to $15,000 (you have 15 days to appeal in writing)
- CORRECT ANSWER --a felony
In a state of emergency of disaster anybody acting in the capacity of a licensed contractor can be charged
with - CORRECT ANSWER - --A Felony
