California State Contractors License Law and Business Test Study Guide. 100% Verified. Rated A

California State Contractors License Law and Business Test Study Guide. 100% Verified. Rated A Who must be licensed as a contractor? - Anyone who constructs or alters on any job that costs 500 dollars or more. How old do your have to be to get a contractors license. - 18 What are the types of licenses issued. - Individual, partnership, or corporation licenses. Joint Venture licenses are made up of 2 individual active licenses for a specific purpose. Does California recognize contractors licenses from other states or countries? - No What charge is it to contract without a license? - Misdemeanor, meaning potential jail time, fines and administrative fines Are there educational requirements to obtain a contractors license? - No Can technical training and apprenticeship training substitute the required training required for the 4 years needed. - Yes. As long as the applicant has a minimum of 1 year of practical experience. Are all applicants required to submit to a background check? - Yes What are the total fees I must pay to obtain a contractor license? - $480.00. The non-refundable processing fee of $300 and the two year initial license fee of $180. Current fees are printed on the application forms and notices. How often do I have to renew my license? - every two years Will I receive notice before my active license expires? - Yes. 60 days, but remember it is your responsibility to know and renew without being reminded. What is the active license renewal fee? - $360. You are required to renew every two years. Is there a fee for renewing an active license - $180. Inactive licenses must be renewed how often? - Every four years What is the minimum operating capital that you must have to qualify to be a contractor? - $2500 If you are changing the business name or address, or changing the personnel or business type, how long do you have to notify the state of those changes? - 90 days If you change owners or the business entity, changing the license structure, can you renew your license at the end of the year or do you need to apply for a new one. - Apply for a new one. Can your old license be renewed? - Yes. If your license has been expired between 3 to 5 years. Another name for the qualifier. - The test-taker. Or the person whom the license is going to be issued. What is the qualifier called if he/she is an individual? - The owner What is the qualifier called if he or she is a partner? - Qualifying Partner. What is the qualifier called if he or she is an officer? - RMO, Responsible Managing Officer What is the qualifier called if he or she is an employee? - RME, Responsible Managing Employee How many hours is an RME, Responsible Managing Employee required to work. - 80% or 32 hours How many licenses can an Owner or Qualifying Partner qualify for at a time. - 3 How may licenses can an RME or RMO qualify for at a time? - 1 Can you lend your license to someone? - No. That would be punishable by law. Can you abandon a project without a legal excuse? - No. This would be cause for disciplinary action. It is classified as "Breach of Contract". A contractor is not prohibited from taking and executing a contract involving the use of two or more crafts or trades, if the performance of the work is _____ and supplemental to the primary job. - Incidental and supplemental to the primary job. Otherwise it must be performed by a sub. Can you use funds from one project to finish another? - No. This falls under the category of Larceny and is a misdemeanor or felony. Is it a crime to use false or misleading advertising? - Yes. It is a misdemeanor. What is a joint venture license? - Two or more qualifiers of different licenses who seek to combine their licenses and expertise for a specific project. How long is a joint venture valid for? - 2 years after first given. If a QP leaves, what can the remaining party file to get more time? - A continuance of up to 1 year in order to complete the project. If a QP leaves, the remaining party has __ days to report it to the state. - 90 days What must qualifiers do every day regarding to the job site? - visit the site daily. When must the subcontractors be paid? - 7 days after each progress payment by the owner to the direct contractor. ____ is the task of preparing a detailed cost estimate for the job, including material. labor, overhead, as well as the profit or mark-up. - Bidding Materials, labor, permits, loan fees, subs, are all considered what type of costs? - Direct Costs Office space rent, office supplies, advertising, staff, insurance, and utility bills are considered what type of costs? - Overhead costs Equipment maintenance, truck maintenance, lubrication, tools, fuel, equipment are considered what type of costs? - Indirect Costs Written offers from contractors to undertake a construction job in return for a sum of money which can be negotiated, limited or selective competition, or an open competition. - Construction bid The 3 essential estimates needed to determine your "mark up" - Gross Income, Overhead expenses, Net profit desired. The industry average for Net profit percentage is... - 6% What is the formula for determining "mark up". - OE + NP = A1...GI - A1= JC...GI / JC = Mark up Where is the best place to look for bidding advice? - Recent job history. Do sales tax costs need to be included in the bid estimate? - Yes If the subs bid is too low, should you let him know? - Yes, it is ethical and good practice to call the sub and inform him when the bid is too high or low. Should you build against code if the customer insists? - No. It is illegal to build against code. Should you bid against other companies or against the job? - Always bid against the job. Doing otherwise will cause you troubles in paying subs, materials, and equipment needed. Should you take your time and double check everything before leaving a quote or just get it done quickly? - Take your time and be critical, ensure you understand all aspects of the plan, walk the job and double check the bid estimate. An agreement with specific terms between two or more people for performance and compensation. - Contract A contract is not enforceable unless it has ___ signatures? - 2. The customer and the contractor. What is the standard contract used by customers and contractors? - Home Improvement Contract. It establishes and agreement between the customer and the contractor for the work being done. What is the required down payment for a contract? - 10% or $1000. Whichever is less. Time given to the customer to cancel the contract? - midnight of the 3rd business day. Time given to the contractor to return all money given by the customer back to him/her. - 10 days, beginning on the day he or she cancels the contract. days given to the customer to make all materials left on the property available for pick up. - 20 days The contractor has this many days from the declared start date, to start the job before breaching the contract. - 20 days Contracts should always be in writing, but they must be in writing if the job costs more than ___. - $500 A lien placed upon the property that received construction. It is filed by the contractor and is used if the contractor does not receive payment for their work and properly filed a Preliminary Notice. - Mechanic's Lien How is a Stop Payment Notice similar to a Mechanic's Lien? - the lien is placed on the funds and not the property. It is still used to get payment for work the contractor did. Can you record a Mechanic's Lien and a Stop Payment Notice on private work? - Yes Can you record a Mechanic's Lien and a Stop Payment on public work? - No. A Mechanic's Lien is limited to private work. What must be filed to keep the right to a Mechanic's Lien? How many days do you have to file it? - A Preliminary Notice Form must be filed within 20 days of signing the contract. Subcontractors, suppliers and anyone else who is going to participate in the job must also file a Preliminary Notice if they want to keep their right. Who files the Notice of Completion? How long does that person have? - The owner. 15 days to file it. How many days does the contractor have to file a Mechanic's Lien? - If the owner does not file a Notice of Completion within 15 days, contractor has 90 days. If the owner files within the proper time, Contractor has 60 days. Small claims courts can only handle cases that are less than what amount? - An individual or small business owned by an individual can file up to 2 cases a year under $7500. Businesses and Corporations can file up to 2 cases a year under $5000 Can you appeal a decision mad in small claims court? - Yes. Can you appeal a decision made in an arbitration hearing? - No. In addition to Mechanic's Lien and a Stop Payment Notice you may also file a ___ ___ for Breach of Contract. - Civil Suit Whats the name of the form that notifies people there is a pending lawsuit on their property. - Lis Pendens If you file a lien, but then get paid, what should you do. - File a lien release form. If changes are made to the job and the original job is not complete yet, what form should be filed? - A Contract Change Order Who has to ensure that the subcontractors are licensed and insured? - Direct Contractor How many bathrooms must be provided for every 20 employees? - One Are workers required to bring their own water to work? - No. The work site is responsible for providing clean and accessible drinking water to employees. Does there need to be an emergency kit on site? - Yes Should the contractor review the plan and specifications with his subs. Is it necessary to write every little detail down for them? - Yes, and Yes, as detailed as possible. Can a contractor receive payment for work that has not been completed? - No. Progress payments cannot exceed the value of the work performed at any given time. When must you pay the subs? - within 7 days of receiving progress payment. What is the term given to a worker in training? - Apprentice What is the term given to a worker who is able to perform trade work unsupervised? - Journeyman Who is responsible for training employees? - Foreman, Supervisor What is a foreman required to do for safety reasons, every ten days? - Conduct a safety meeting Covers your property, tools and office against fire, storm, theft etc... It does not cover your employees tools. - Property Insurance Covers your vehicles, trucks, equipment or trailers while you or your employees are driving them. - Vehicle Insurance Covers against vandalism and theft of your property at the job site. - Builder's Risk Insurance Covers the loss of a person who performs a crucial role in your company by compensating the business. - Key Person Insurance