Texas Contractor Exam — All Questions

How does Texas regulate a person who wants to work as a general building contractor statewide?

• a.It licenses general contractors through the Texas Real Estate Commission
• b.It issues a single statewide general contractor license through a Texas Contractors Board
• c.It requires a state general contractor license only for projects over $50,000
• d.It has NO statewide general contractor license; general contracting is regulated by trade and by local city rules✓

Unlike many states, Texas does not issue a statewide general contractor license. There is no state contractor board that licenses general building contractors. Instead, specific trades are regulated at the state level (for example electrical and HVAC through TDLR, plumbing through the plumbing board), and general contractors are typically registered or permitted at the city or county level.

Which Texas state agency licenses electricians and air conditioning/refrigeration (HVAC) contractors?

• a.The Texas Department of Licensing and Regulation (TDLR)✓
• b.The U.S. Department of Labor
• c.The Texas Contractors State License Board
• d.The Texas Real Estate Commission

The Texas Department of Licensing and Regulation (TDLR) administers many occupational programs, including electrical contractors/electricians and air conditioning and refrigeration (ACR/HVAC) contractors. TDLR does not, however, license general contractors, because Texas has no statewide general contractor license.

A contractor plans to build homes in several Texas cities. Where does the authority to require registration and pull building permits usually come from?

• a.The Texas Department of Motor Vehicles
• b.Each local municipality (city) or county sets its own registration and permit requirements✓
• c.The federal government through OSHA
• d.A single statewide contractor registry that covers all Texas cities

Because Texas has no statewide general contractor license, local governments fill the gap. Cities and counties commonly require a contractor to register, carry insurance, and obtain building permits under their own local ordinances. A contractor working in multiple jurisdictions may have to register separately in each one.

In Texas, plumbing work is licensed by which authority?

• a.The Texas State Board of Plumbing Examiners (TSBPE)✓
• b.The city building department only
• c.The Texas Department of Licensing and Regulation (TDLR)
• d.There is no license required for plumbing in Texas

Plumbers in Texas are licensed by the Texas State Board of Plumbing Examiners (TSBPE), a separate state board from TDLR. This is an example of how Texas regulates individual trades at the state level even though it does not license general contractors.

Texas mechanic's and materialman's lien rights on private construction projects are governed primarily by which law?

• a.The federal Miller Act
• b.The Texas Business and Commerce Code, Chapter 2
• c.The Texas Property Code, Chapter 53✓
• d.The Texas Penal Code, Chapter 31

Chapter 53 of the Texas Property Code sets out the mechanic's, contractor's, and materialman's lien rights on private projects, including who may claim a lien, the required notices, and filing deadlines. (The federal Miller Act applies to federal public works, not private Texas projects.)

Under the Texas Property Code, when must an original (prime) contractor on a non-residential project file the lien affidavit?

• a.Within 10 days after starting work
• b.By the 15th day of the fourth calendar month after the month the work was completed, terminated, or abandoned✓
• c.Only after a court judgment
• d.Any time within two years

For non-residential projects, an original contractor must file the lien affidavit with the county clerk by the 15th day of the fourth calendar month after the month in which the original contract was completed, terminated, or abandoned. (Residential projects use a shorter third-month deadline.) Missing the statutory deadline generally forfeits the lien.

A Texas homeowner claims a construction defect in a new home. Before the homeowner can sue, the Residential Construction Liability Act (RCLA) generally requires them to do what?

• a.Wait ten years before taking any action
• b.Report the contractor to the FBI
• c.Give the contractor written notice of the defect and a reasonable opportunity to inspect and offer to repair✓
• d.Immediately file a lawsuit without notice

The Residential Construction Liability Act (Texas Property Code Chapter 27) requires a homeowner to send the contractor written notice of the alleged defect and allow the contractor an opportunity to inspect and make a written offer of repair or settlement before litigation proceeds. This encourages resolution without a lawsuit.

Under the Texas Property Code retainage rules, an owner is generally required to retain what portion of the contract price to protect potential lien claimants?

• a.10% of the contract price (or 10% of the value of the work)✓
• b.50% of the contract price
• c.1% of the contract price
• d.No retainage is required in Texas

Chapter 53 of the Texas Property Code requires the owner to withhold 10% of the contract price (or 10% of the value of the work) during construction and for 30 days after the work is completed. This statutory retainage creates a fund that certain claimants can reach even if they did not send early notice.

Because Texas has no statewide general contractor license, what most commonly determines the insurance and bonding a general contractor must carry?

• a.Nothing; insurance is never required in Texas
• b.A single statewide bonding law set by the legislature
• c.Local city/county ordinances plus the requirements written into the owner's contract✓
• d.Federal OSHA insurance rules

Without a state license imposing uniform bonding and insurance, a Texas general contractor's obligations come from two main sources: local government registration and permit rules (which often require general liability insurance and sometimes a permit bond) and the private construction contract, where owners and lenders typically require liability coverage, workers' compensation or occupational coverage, and sometimes performance and payment bonds.