A contractor receives a $30,000 contract for home improvements. What is the maximum down payment that can legally be collected?
Correct Answer
C) $1,000
Georgia law limits down payments to 33% of contract price OR $1,000, whichever is LESS. Since $1,000 is less than 33% of $30,000 ($9,900), the maximum down payment is $1,000.
Why This Is the Correct Answer
Georgia law limits down payments to the lesser of 33% of the contract price OR $1,000. For a $30,000 contract, 33% is $9,900 — but $1,000 is less than $9,900, so $1,000 controls. The contractor cannot collect more than $1,000 as a down payment.
Why the Other Options Are Wrong
Option A: $9,900
$9,900 is 33% of $30,000, but the rule requires whichever is LESS — $1,000 or 33%. Since $1,000 < $9,900, the cap is $1,000, not $9,900.
Option B: $10,000
$10,000 appears to be a round number approximation of 33% of $30,000, but it is neither the correct percentage calculation nor the correct statutory figure. The rule is 33% OR $1,000, whichever is less.
Option D: $3,000
$3,000 is 10% of the contract value and has no basis in Georgia's down payment statute. The law specifies 33% or $1,000 — not 10%.
Memory Technique
Georgia down payment rule: '33% or $1,000 — the LESSER wins.' For any contract over $3,030 (33% × $3,030 ≈ $1,000), the $1,000 flat cap always wins. So for any realistically sized home improvement contract, the answer is almost always $1,000.
More Georgia Questions
A contractor discovers that a building permit was issued in error and the project violates setback requirements. According to Georgia regulations, what is the contractor's primary obligation?
A contractor employs workers in both construction and office roles. The construction rate is 11.2 per $100 and office rate is 0.8 per $100. Construction payroll is $85,000 and office payroll is $45,000. What is the total workers compensation premium?
Which situation would require a Georgia contractor to obtain workers' compensation insurance?
A contractor receives a stop work order from the local building official. The contractor continues working despite the order. What is the typical penalty range?
A contractor's license expires on June 30th. They submit a renewal application on July 15th. What additional requirement must they meet?
A Georgia contractor completes work valued at $15,000 on March 1st. The property owner fails to pay. What is the deadline for filing a materialman's lien?
A contractor fails to pay workers' compensation premiums and coverage lapses. An employee is injured the next day. What is the contractor's liability?
A contractor discovers that the local building official is interpreting a code provision differently than expected. What is the proper appeal process in Georgia?
A contractor's annual payroll is $450,000. If the workers compensation rate is 8.5 per $100 of payroll, what is the annual premium?
What is the threshold amount above which a contractor must be licensed in Georgia?
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