VIRGINIA HOME IMPROVEMENT
CONTRACTOR (HIC) LICENSE EXAM –
2026-2027 OFFICIAL PRACTICE TEST &
STUDY GUIDE
PART 1: KEY LAW & REGULATION SUMMARY
A. The Home Improvement Contract (VCOV § 54.1-2011 et seq.)
● Mandatory Clauses: Must include contractor’s full name, business address, and
active Virginia HIC license number; homeowner’s name and address; a conspicuous
3-day right of rescission notice (in 10-point bold type); detailed description of work
with materials/specifications; total contract price and itemized payment schedule;
agreed start and completion dates.
● Disclosure Statement: Contract must contain the statement: “NOTICE: The law
requires that a person who contracts for home improvement be licensed by the
Virginia Department of Professional and Occupational Regulation. The contractor
warrants that all work will be performed in a workmanlike manner and in accordance
with applicable codes.” (§ 54.1-2011)
● Amendments: Any changes must be in writing, signed by both parties, and attached
to the original contract.
B. Licensing & Prohibited Acts (VCOV § 54.1-2000 et seq., 18VAC50-22)
● License Requirement: Any person performing home improvement work for
compensation exceeding $1,000 must hold a valid Virginia HIC license (§ 54.1-1100).
● Prohibited Acts (§ 54.1-2015): Includes abandoning a project without justification,
diverting funds for other uses, failing to perform contracted work, misrepresenting
facts to obtain a license or contract, advertising without license number, and
performing work while license is suspended.
● Disciplinary Grounds (18VAC50-22-260): Fraud, gross negligence, failure to
comply with Board orders, conviction of a felony involving moral turpitude, or
repeated violations of contractor laws.
C. Consumer Protection & Dispute Resolution
● Virginia Board for Contractors (VBC): Investigates complaints, holds disciplinary
hearings, and can impose fines, suspend, or revoke licenses.
, ● Transaction Recovery Fund (§ 54.1-1118 et seq.): Provides up to $10,000 per
claim (max $30,000 per licensee) to homeowners for actual financial loss due to
unlicensed or licensed contractor fraud, misrepresentation, or conversion of funds.
Claims must be filed within 2 years of loss; homeowner must have a final court
judgment.
● Arbitration: Contracts may include binding arbitration clauses, but must comply with
Virginia Uniform Arbitration Act (§ 8.01-581.01 et seq.).
D. Business & Financial Practices
● Down Payments: Limited to the lesser of one-third (1/3) of the total contract
price or the actual cost of special-order materials that cannot be returned (§
54.1-2013).
● Business Records: Must be retained for 3 years and include contracts, invoices,
payment records, and correspondence (18VAC50-22-120).
● Insurance: Workers’ compensation is required if employing >2 people; general
liability insurance is not mandated by DPOR but often required by localities or clients.
● Mechanics’ Liens: Contractor must provide preliminary notice to owner within 30
days of first furnishing labor/materials for residential projects over $5,000 (§ 43-4.01).
Lien must be filed within 90 days of last work.
E. Building Codes, Permits & Safety
● Permits: Contractor is responsible for obtaining all required building, electrical,
plumbing, and mechanical permits (Virginia Uniform Statewide Building Code –
USBC).
● Code Compliance: All work must comply with USBC, local ordinances, and
manufacturer specifications.
● Hazardous Materials: Federal laws (e.g., EPA Lead Renovation, Repair and
Painting Rule) apply; contractors must be EPA-certified to work on pre-1978 housing
for lead paint; asbestos requires licensed abatement.
● OSHA: Contractors with employees must comply with OSHA safety standards (e.g.,
fall protection, ladder safety).
PART 2: COMPREHENSIVE HIC PRACTICE EXAM
1. Under Virginia law, what is the MAXIMUM allowable down payment a contractor can
collect for a home improvement project before commencing work?
A) 10% of the total contract price
B) 50% of the total contract price
C) The lesser of one-third of the contract price or the actual cost of special order materials
,D) The full cost of materials
Answer: C
This is mandated by § 54.1-2013 of the Code of Virginia. The law strictly limits upfront
payments to protect consumers from financial risk and project abandonment. Collecting
more than this amount prior to starting work is a violation and grounds for disciplinary action
by the Board.
2. Which of the following must be included in a valid Virginia home improvement contract?
A) Contractor’s social security number
B) Homeowner’s driver’s license number
C) Contractor’s Virginia HIC license number
D) A copy of the contractor’s business license from the city
Answer: C
§ 54.1-2011 requires the contractor’s full name, business address, and active Virginia HIC
license number to be in the contract. SSN (A), DL (B), and local business licenses (D) are
not required by DPOR for the HIC contract.
3. How many days does a homeowner have to cancel a home improvement contract without
penalty under Virginia’s right of rescission?
A) 1 day
B) 3 days
C) 7 days
D) 10 days
Answer: B
§ 54.1-2011 grants the homeowner a 3-day right to rescind the contract, starting from the
date of signing. The notice must be in bold 10-point type in the contract.
4. A contractor performs $800 worth of bathroom repairs. Is a Virginia HIC license required?
, A) Yes, because it’s home improvement work
B) No, because the total contract price is under $1,000
C) Only if the homeowner requests a contract
D) Yes, unless the contractor is a handyman
Answer: B
§ 54.1-1100 states that a license is required only for work valued at more than $1,000. Jobs
at or below $1,000 do not require an HIC license.
5. Which statement about the Virginia Contractor Transaction Recovery Fund is TRUE?
A) It covers up to $50,000 per claim
B) Homeowners can file a claim directly without a court judgment
C) It requires a final court judgment against the contractor
D) It covers poor workmanship without fraud
Answer: C
§ 54.1-1119 requires a final court judgment (or arbitration award confirmed by a court) before
a Recovery Fund claim can be processed. The maximum is $10,000 per claim, and it only
covers fraud, misrepresentation, or conversion—not mere poor workmanship.
6. What is the required notice period for filing a mechanics’ lien on a residential project in
Virginia?
A) Preliminary notice within 30 days; lien within 90 days
B) Preliminary notice within 60 days; lien within 120 days
C) No preliminary notice required; lien within 90 days
D) Preliminary notice within 10 days; lien within 60 days
Answer: A
CONTRACTOR (HIC) LICENSE EXAM –
2026-2027 OFFICIAL PRACTICE TEST &
STUDY GUIDE
PART 1: KEY LAW & REGULATION SUMMARY
A. The Home Improvement Contract (VCOV § 54.1-2011 et seq.)
● Mandatory Clauses: Must include contractor’s full name, business address, and
active Virginia HIC license number; homeowner’s name and address; a conspicuous
3-day right of rescission notice (in 10-point bold type); detailed description of work
with materials/specifications; total contract price and itemized payment schedule;
agreed start and completion dates.
● Disclosure Statement: Contract must contain the statement: “NOTICE: The law
requires that a person who contracts for home improvement be licensed by the
Virginia Department of Professional and Occupational Regulation. The contractor
warrants that all work will be performed in a workmanlike manner and in accordance
with applicable codes.” (§ 54.1-2011)
● Amendments: Any changes must be in writing, signed by both parties, and attached
to the original contract.
B. Licensing & Prohibited Acts (VCOV § 54.1-2000 et seq., 18VAC50-22)
● License Requirement: Any person performing home improvement work for
compensation exceeding $1,000 must hold a valid Virginia HIC license (§ 54.1-1100).
● Prohibited Acts (§ 54.1-2015): Includes abandoning a project without justification,
diverting funds for other uses, failing to perform contracted work, misrepresenting
facts to obtain a license or contract, advertising without license number, and
performing work while license is suspended.
● Disciplinary Grounds (18VAC50-22-260): Fraud, gross negligence, failure to
comply with Board orders, conviction of a felony involving moral turpitude, or
repeated violations of contractor laws.
C. Consumer Protection & Dispute Resolution
● Virginia Board for Contractors (VBC): Investigates complaints, holds disciplinary
hearings, and can impose fines, suspend, or revoke licenses.
, ● Transaction Recovery Fund (§ 54.1-1118 et seq.): Provides up to $10,000 per
claim (max $30,000 per licensee) to homeowners for actual financial loss due to
unlicensed or licensed contractor fraud, misrepresentation, or conversion of funds.
Claims must be filed within 2 years of loss; homeowner must have a final court
judgment.
● Arbitration: Contracts may include binding arbitration clauses, but must comply with
Virginia Uniform Arbitration Act (§ 8.01-581.01 et seq.).
D. Business & Financial Practices
● Down Payments: Limited to the lesser of one-third (1/3) of the total contract
price or the actual cost of special-order materials that cannot be returned (§
54.1-2013).
● Business Records: Must be retained for 3 years and include contracts, invoices,
payment records, and correspondence (18VAC50-22-120).
● Insurance: Workers’ compensation is required if employing >2 people; general
liability insurance is not mandated by DPOR but often required by localities or clients.
● Mechanics’ Liens: Contractor must provide preliminary notice to owner within 30
days of first furnishing labor/materials for residential projects over $5,000 (§ 43-4.01).
Lien must be filed within 90 days of last work.
E. Building Codes, Permits & Safety
● Permits: Contractor is responsible for obtaining all required building, electrical,
plumbing, and mechanical permits (Virginia Uniform Statewide Building Code –
USBC).
● Code Compliance: All work must comply with USBC, local ordinances, and
manufacturer specifications.
● Hazardous Materials: Federal laws (e.g., EPA Lead Renovation, Repair and
Painting Rule) apply; contractors must be EPA-certified to work on pre-1978 housing
for lead paint; asbestos requires licensed abatement.
● OSHA: Contractors with employees must comply with OSHA safety standards (e.g.,
fall protection, ladder safety).
PART 2: COMPREHENSIVE HIC PRACTICE EXAM
1. Under Virginia law, what is the MAXIMUM allowable down payment a contractor can
collect for a home improvement project before commencing work?
A) 10% of the total contract price
B) 50% of the total contract price
C) The lesser of one-third of the contract price or the actual cost of special order materials
,D) The full cost of materials
Answer: C
This is mandated by § 54.1-2013 of the Code of Virginia. The law strictly limits upfront
payments to protect consumers from financial risk and project abandonment. Collecting
more than this amount prior to starting work is a violation and grounds for disciplinary action
by the Board.
2. Which of the following must be included in a valid Virginia home improvement contract?
A) Contractor’s social security number
B) Homeowner’s driver’s license number
C) Contractor’s Virginia HIC license number
D) A copy of the contractor’s business license from the city
Answer: C
§ 54.1-2011 requires the contractor’s full name, business address, and active Virginia HIC
license number to be in the contract. SSN (A), DL (B), and local business licenses (D) are
not required by DPOR for the HIC contract.
3. How many days does a homeowner have to cancel a home improvement contract without
penalty under Virginia’s right of rescission?
A) 1 day
B) 3 days
C) 7 days
D) 10 days
Answer: B
§ 54.1-2011 grants the homeowner a 3-day right to rescind the contract, starting from the
date of signing. The notice must be in bold 10-point type in the contract.
4. A contractor performs $800 worth of bathroom repairs. Is a Virginia HIC license required?
, A) Yes, because it’s home improvement work
B) No, because the total contract price is under $1,000
C) Only if the homeowner requests a contract
D) Yes, unless the contractor is a handyman
Answer: B
§ 54.1-1100 states that a license is required only for work valued at more than $1,000. Jobs
at or below $1,000 do not require an HIC license.
5. Which statement about the Virginia Contractor Transaction Recovery Fund is TRUE?
A) It covers up to $50,000 per claim
B) Homeowners can file a claim directly without a court judgment
C) It requires a final court judgment against the contractor
D) It covers poor workmanship without fraud
Answer: C
§ 54.1-1119 requires a final court judgment (or arbitration award confirmed by a court) before
a Recovery Fund claim can be processed. The maximum is $10,000 per claim, and it only
covers fraud, misrepresentation, or conversion—not mere poor workmanship.
6. What is the required notice period for filing a mechanics’ lien on a residential project in
Virginia?
A) Preliminary notice within 30 days; lien within 90 days
B) Preliminary notice within 60 days; lien within 120 days
C) No preliminary notice required; lien within 90 days
D) Preliminary notice within 10 days; lien within 60 days
Answer: A
