A homeowner signs a $12,300 exterior door and siding contract. What is the largest down payment allowed before work starts?
Correct Answer
A) $1,000.
The CA home improvement down payment limit is the lesser of $1,000 or 10 percent of the contract price. Ten percent is $1,230, so the cap is $1,000.
Why This Is the Correct Answer
The CA home improvement down payment limit is the lesser of $1,000 or 10 percent of the contract price. Ten percent is $1,230, so the cap is $1,000.
Why the Other Options Are Wrong
Option B: $1,230.
$1,230. is above the supported result for project contracts; it likely adds scope or money the rule does not allow.
Option C: $2,460.
$2,460. is above the supported result for project contracts; it likely adds scope or money the rule does not allow.
Option D: $615.
$615. is below the supported result for project contracts; it likely omits part of the approved scope, cap, credit, or holdback.
Memory Technique
Project Contracts cue Checking Deposit: ceiling and percentage shake hands; the lower hand controls.
Reference Hint
Study anchor (closed-book): memorize Project contracts from CSLB 2026 Law Book; CSLB Home Improvement Contracts / Business and Professions Code Section 7159; know the rule or calculation trigger without relying on exam-room lookup.
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