Georgia General Contractor Exam — All Questions

An unlicensed person performs work that required a Georgia contractor license and then sues the owner to collect the unpaid balance. Under O.C.G.A. §43-41-17, what is the result?

• a.The owner must pay the contractor double damages, because withholding payment is a breach regardless of licensure
• b.The contractor may collect the full contract price
• c.The contract is unenforceable, so the unlicensed contractor generally cannot use the courts to collect on it✓
• d.The contractor may collect, but recovery is limited to the documented cost of materials delivered to the site

Under O.C.G.A. §43-41-17, a contract entered into by a person required to be licensed but who is not is unenforceable in law or equity (for contracts on or after July 1, 2008). An unlicensed contractor generally cannot sue to collect, which is a powerful incentive to be licensed before contracting.O.C.G.A. §43-41-17

Which situation fits Georgia's owner exemption from the contractor-licensing requirement?

• a.A property manager who remodels rental units for absentee investors
• b.A developer who builds twelve spec houses a year to sell to the public
• c.A handyman who advertises statewide residential remodeling services
• d.An owner who builds on the owner's own property, for the owner's own use and occupancy, a building that is not offered for sale or lease✓

O.C.G.A. §43-41-17(h) exempts an owner of property who builds or improves a structure on that property for use or occupancy solely by the owner, the owner's family, firm, or employees, and not for use by the general public and not offered for sale or lease. If the building is sold or leased within 24 months after completion, the law presumes it was built for sale or lease. A developer building spec homes for the public is acting as a contractor and needs a license.O.C.G.A. §43-41-17(f) (owner exemption)

Under O.C.G.A. §43-41-17, a licensed trade contractor (such as a plumbing, electrical, or conditioned-air contractor) may contract directly with an owner for a job that is predominantly its own trade. Other work that is incidental to and an integral part of that job must not exceed which limit?

• a.The lesser of $1,000 or 5 percent of the total value of the work to be performed
• b.The greater of $50,000 or 50 percent of the total value of the work to be performed
• c.A flat $100,000, regardless of the total value of the work to be performed
• d.The greater of $10,000 or 25 percent of the total value of the work✓

O.C.G.A. §43-41-17(e) lets a contractor licensed under Chapter 14 (plumbing, conditioned air, utility, electrical, low-voltage) contract directly with an owner where the total scope is predominantly its licensed trade and any other work is incidental to and an integral part of it and does not exceed the greater of $10,000 or 25 percent of the total value, at the time of contracting, of the work to be performed. Subsection (f) applies the same test to specialty contractors. Building work beyond that limit needs the residential or general contractor license.O.C.G.A. Title 43, Ch. 41 (scope/specialty threshold)

In Georgia, engaging in the business of contracting without the required license is generally treated as:

• a.Grounds only for a warning letter
• b.A felony on the first offense
• c.A purely civil matter with no penalty
• d.A misdemeanor, in addition to the contract being unenforceable✓

Unlicensed contracting where a license is required is a misdemeanor under Georgia law, and separately the contract itself is unenforceable under O.C.G.A. §43-41-17. The unlicensed operator thus faces both criminal exposure and the loss of the right to collect.O.C.G.A. §43-41-17 (unlicensed practice)

A construction company wants to bid Georgia work as a licensed entity. How does the company hold its license?

• a.Through a qualifying agent, an individual who holds the license and is responsible for the company's contracting✓
• b.By registering the company name with the board, with no individual licensee attached and no examination required of anyone
• c.Automatically, once it registers with the Secretary of State
• d.By having every field employee individually licensed

A company contracts under the license of a qualifying agent, an individual who has passed the examinations and taken responsibility for the firm's contracting activities. If the qualifying agent leaves, the company must designate a qualified replacement to keep contracting.O.C.G.A. Title 43, Ch. 41 (qualifying agent)

Under Georgia's mechanics' and materialmen's lien law, within what time after the claimant last furnishes labor or materials must a Claim of Lien be filed for record?

• a.Within 30 days
• b.Within 45 days
• c.Within one year
• d.Within 90 days✓

Georgia law (O.C.G.A. §44-14-361.1) requires a Claim of Lien to be filed of record within 90 days after the claimant last furnished labor, services, or materials to the project. Missing this deadline generally defeats the lien.O.C.G.A. §44-14-361.1(a)(2)

After a Georgia Claim of Lien is filed, within what time must the claimant commence an action to enforce (foreclose) the lien or it becomes unenforceable?

• a.Within 90 days from the date the Claim of Lien was filed with the clerk of superior court
• b.Within 30 days from the date the Claim of Lien was filed with the clerk of superior court
• c.Within five years from the date the Claim of Lien was filed with the clerk of superior court
• d.Within 365 days (one year) from the date the Claim of Lien was filed✓

Georgia requires the lien claimant to file suit to enforce the lien within 365 days (one year) from the date the Claim of Lien is filed of record. The claimant must also file a Notice of Action in the county records within 30 days of filing suit.O.C.G.A. §44-14-361.1(a)(3)

Why is holding a valid Georgia license important to a contractor's lien and collection rights?

• a.It only affects the filing fee the clerk of superior court charges, since licensed contractors pay a reduced rate to record a claim of lien
• b.It merely speeds up permit approval at the local building department and has no bearing at all on a contractor's contract, lien, or payment rights
• c.An unlicensed contractor's contract is unenforceable, which undermines the ability to collect and to rely on the courts to enforce payment✓
• d.It has no effect on lien or collection rights

Because O.C.G.A. §43-41-17 makes an unlicensed contractor's contract unenforceable, an unlicensed contractor is in a weak position to collect or to enforce a lien claim. Licensure is a precondition to full use of Georgia's payment-collection tools.O.C.G.A. §43-41-17(b); §44-14-361.1