A contractor performs $15,000 worth of work on a residential project in Georgia. The homeowner pays $10,000 upfront but disputes the final $5,000. What is the maximum amount the contractor can collect from the Georgia Residential Contractor Recovery Fund?
Correct Answer
C) $25,000
The Georgia Residential Contractor Recovery Fund has a maximum payout of $25,000 per claim, regardless of the actual damages claimed.
Why This Is the Correct Answer
The Georgia Residential Contractor Recovery Fund caps individual claims at $25,000, regardless of actual damages. Even though the disputed amount is only $5,000, the question asks for the statutory maximum the fund can pay — which is $25,000 per claim.
Why the Other Options Are Wrong
Option A: $15,000
$15,000 equals the total contract value and has no significance to the fund's payout cap. The fund's cap is set by statute, not by contract size.
Option B: $50,000
$50,000 is not the correct cap for the Georgia Residential Contractor Recovery Fund. Candidates sometimes confuse this with other state recovery fund limits or aggregate annual caps.
Option D: $5,000
$5,000 is the amount actually in dispute, not the statutory maximum the fund can pay. The question specifically asks for the maximum the fund allows, not the amount being claimed.
Memory Technique
Georgia Recovery Fund = $25,000 per claim. Picture a $25 bill with a house on it — 'twenty-five thousand per home claim' in Georgia.
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Which situation would require a Georgia contractor to obtain workers' compensation insurance?
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