Texas Contractor Exam — All Questions
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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.1% of the contract price
- b.10% of the contract price (or 10% of the value of the work)✓
- c.50% 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.A single statewide bonding law set by the legislature
- b.Federal OSHA insurance rules
- c.Local city/county ordinances plus the requirements written into the owner's contract✓
- d.Nothing; insurance is never required in Texas
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.