Business FinancesQuestion 631 of 690
On a residential swimming pool contract, what is the maximum down payment a contractor may receive before work begins?
a.$1,000 or 10% of the contract price, whichever is less
b.$200, with subsequent payments tied to specific construction milestones (excavation, gunite, plaster, etc.)
c.20% of the contract price, with no payment schedule restriction
d.$5,000 flat, regardless of contract size
Explanation
Bus. & Prof. Code §7159.5 establishes special, stricter rules for residential swimming pool contracts: the down payment cannot exceed $200, and the balance must be paid in milestone-based progress payments matching the actual stages of pool construction (e.g., excavation, steel, plumbing, gunite, decking, plaster). The $1,000/10% rule in option A applies to general home improvement under §7159 — pools have their own tighter rule. The 20% and $5,000 options would violate consumer-protection requirements and are common CSLB discipline triggers.
Law Reference: Bus. & Prof. Code §7159.5Practice all 690 questions free — no signup required.
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