Arkansas Contractor License Exam — All Questions

What surety bond must an Arkansas commercial contractor file with the licensing board?

• a.No bond is required
• b.$1,000
• c.$10,000✓
• d.$100,000

Under the Arkansas Contractors Licensing Law (A.C.A. Title 17, Ch. 25), an Arkansas commercial contractor must file a $10,000 surety bond with the ACLB. The bond protects the state and, in defined circumstances, those who deal with the contractor.A.C.A. Title 17, Ch. 25 (Arkansas Contractors Licensing Law)

Unlicensed commercial contracting in Arkansas can be penalized at approximately what rate?

• a.$100 to $400 per day of the offense✓
• b.A flat $10 one-time fine
• c.No penalty applies
• d.Exactly $1,000,000 per project

Unlicensed commercial contracting in Arkansas can be penalized in the range of $100 to $400 per day, and it is treated as a misdemeanor. Because the penalty accrues daily, exposure on a long project can be large.A.C.A. Title 17, Ch. 25 (penalties)

When must an Arkansas contractor hold the commercial license in relation to bidding a covered $60,000 project?

• a.Only after the project is finished
• b.Only at the final inspection
• c.A license is never needed to bid
• d.Before submitting the bid; the contractor cannot bid the covered project first and license later✓

Arkansas requires the contractor to be licensed before submitting a bid on covered commercial work of $50,000 or more. A contractor cannot lawfully bid a $60,000 project and become licensed afterward; bid documents typically require the license number.A.C.A. Title 17, Ch. 25 (bidding)

An unlicensed contractor completes covered Arkansas commercial work and then tries to sue to collect. What is the practical effect of having been unlicensed?

• a.It guarantees full recovery of the contract price
• b.The contractor is in a weak position to enforce the contract because the work violated the licensing law✓
• c.It has no effect on the right to collect
• d.It doubles the amount the owner must pay

Because the work was performed in violation of the licensing law, an unlicensed Arkansas contractor is in a weak position to enforce the contract or collect through the courts. Licensure before the work is the way to preserve collection rights.A.C.A. Title 17, Ch. 25

How is unlicensed commercial contracting classified under Arkansas law, apart from the daily monetary penalty?

• a.As a purely civil matter with no criminal aspect
• b.As a felony on the first offense
• c.As a misdemeanor✓
• d.As grounds only for a warning

Unlicensed commercial contracting is treated as a misdemeanor under A.C.A. Title 17, Chapter 25, in addition to the $100–$400 per-day penalty and the loss of contract-enforcement rights.A.C.A. Title 17, Ch. 25 (misdemeanor)

A developer builds a new six-unit apartment building in Arkansas for $900,000. Under the licensing rules, this project is:

• a.Treated as commercial, because a structure of five or more dwelling units is commercial and the cost exceeds $50,000✓
• b.Exempt, because apartments are residential
• c.Covered only by a home-improvement credential
• d.Never subject to Arkansas licensing

A residential structure of five or more dwelling units is treated as commercial, and this project also exceeds the $50,000 commercial threshold. The developer's contractor needs the appropriate commercial license (Restricted caps single projects at $750,000, so this $900,000 job needs Unrestricted).A.C.A. Title 17, Ch. 25 (multifamily scope)

A Restricted Commercial licensee in Arkansas is offered a single project worth $800,000. What is the problem?

• a.There is no problem; Restricted has no cap
• b.Restricted Commercial is only for homes
• c.The project must be split into daily invoices
• d.The single-project value exceeds the $750,000 Restricted Commercial cap, so the contractor needs an Unrestricted license✓

The Restricted Commercial classification caps a single project at $750,000. An $800,000 project exceeds that cap, so the contractor must hold an Unrestricted license to perform it. Splitting the contract to evade the cap is not a lawful fix.ACLB Restricted Commercial cap

A contractor performs a $3,000 bathroom remodel on an existing single-family home in Arkansas. What credential does this residential work implicate?

• a.An Unrestricted commercial license, because $3,000 is a commercial project
• b.A home-improvement credential, because the work on the existing residence exceeds $2,000✓
• c.No credential, because all residential work is exempt
• d.The NASCLA commercial exam only

Home improvement on an existing single-family residence exceeding $2,000 requires a home-improvement credential. A $3,000 bathroom remodel exceeds that floor, so the home-improvement rules apply rather than the $50,000 commercial line.A.C.A. Title 17, Ch. 25 (home improvement)