Contracts & ExecutionQuestion 147 of 1632

Which practice by a contractor on a home improvement contract is PROHIBITED?

a.Tying progress payments to phases of work already completed
b.Listing the license number and CSLB notice on the contract
c.Giving the homeowner a written warranty on the installation
d.Requesting payment that exceeds the value of the work performed

Explanation

B&P §7159.5(a)(5) is explicit: on a home improvement contract the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered. Front-loading the money is the violation. Progress payments tied to completed phases are exactly how the statute expects payment to be staged; the license number and the CSLB notice are required contract contents; and a written warranty is a protection a contractor may always offer. Keep this apart from §7159.5(a)(3), which caps the down payment itself at $1,000 or 10% of the contract price, whichever is less.

Law Reference: Bus. & Prof. Code §7159.5(a)(5); §7159.5(a)(3)

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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
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