Business & LicensingQuestion 428 of 1632100% of test-takers answer this correctly

A homeowner asks an unlicensed person to do several small repairs. The person quotes them separately: $600, $500, and $400, all part of the same overall job. Under §7048, this is:

a.Improper, because the work may not be split to stay under $1,000
b.Proper, because each separate quote comes in under $1,000
c.Proper, because all of the repairs are minor in nature
d.Proper, as long as the homeowner agrees to the arrangement

Explanation

§7048(a) exempts a work or operation on one undertaking or project, by one or more contracts, only where the aggregate contract price for labour, materials and all other items is less than $1,000 and the work does not require a building permit. The word doing the work is aggregate: $600 plus $500 plus $400 on the same job is $1,500, which is over the line before anyone even reaches the evasion rule. §7048(b) then closes the door in terms, saying the section does not apply where a division of the operation is made into contracts of amounts less than $1,000 for the purpose of evasion or otherwise — so (b) describes precisely the manoeuvre the statute names and forbids. (c) mistakes the label for the test: 'minor' in §7048 is the conclusion the dollar figure and the permit question produce, not a judgment about how small the jobs feel. (d) forgets whom the licence law protects, since the homeowner cannot consent on behalf of the public and §7031(b) lets that same homeowner sue later to recover everything paid. §7048(c) withdraws the exemption altogether from anyone who advertises as a contractor or employs another person to do the work, and unlicensed contracting is a misdemeanour under §7028(a).

Law Reference: Bus. & Prof. Code §7048(a)-(c); §7028(a); §7031(b)

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