Business FinancesQuestion 632 of 1605
A consumer wins a final judgment of $50,000 against a licensed contractor for fraudulent home improvement work. The CSLB license bond is $25,000. What is the most the claimant can recover from the bond itself?
a.Nothing, because consumer claims must instead go to the CSLB Recovery Fund
b.Up to the $25,000 bond penalty (shared with any other valid claimants against the same bond)
c.$10,000, because that is the consumer-fraud sub-limit
d.The full judgment of $50,000, because the bond is secondary security
Explanation
Bus. & Prof. Code §7071.6 caps recovery on the contractor's $25,000 license bond at the bond's penal sum, and §7071.11 governs priority of claims when claims exceed available bond proceeds. A bond is not 'secondary' to the judgment — it is a fixed pool of money. There is no $10,000 consumer-fraud sub-limit on the license bond. California does not have a CSLB Recovery Fund for general consumer claims (some other states do). The consumer can still pursue the contractor personally for the balance above $25,000, but bond recovery itself is capped.
Law Reference: Bus. & Prof. Code §7071.11Practice all 1605 questions free — no signup required.
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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)