Contracts & ExecutionQuestion 136 of 1605
After the down payment, payments collected under a home improvement contract must:
a.Always be collected in equal monthly installments
b.Be made entirely in advance of the work
c.Not exceed the value of work performed and materials delivered to that point
d.Be held in escrow by the building department
Explanation
California prohibits front-loading. Each progress payment must not exceed the value of work actually performed and materials actually delivered, protecting the homeowner if the contractor stops work.
Law Reference: Bus. & Prof. Code §7159.5Practice all 1605 questions free — no signup required.
Related questions on this topic
- Which of the following is NOT a required element of a California home improvement contract?
- A home improvement contract in California must be signed by the homeowner and contractor and a copy given to the buyer:
- A homeowner signs a $9,000 home improvement contract at their kitchen table on a Tuesday. By when must the homeowner deliver a written cancellation notice to keep the cancellation valid?
- If a home improvement contract contains a binding arbitration clause, California law requires that the clause be:
- A change order on a home improvement project that increases the price must:
- Section 7164 of the Business and Professions Code governs contracts for:
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)