According to California regulations, when may the CSLB require a disciplinary bond from a licensed contractor?
Correct Answer
A) When the contractor has been subject to disciplinary action or has an unsatisfied judgment
Per B&P Code Section 7071.11, the CSLB may require a disciplinary bond when a contractor has been subject to disciplinary action, has an unsatisfied judgment, or when the Registrar determines additional security is needed to protect the public. This bond amount can range from $25,000 to $100,000 depending on circumstances.
Why This Is the Correct Answer
Under California Business & Professions Code Section 7071.11, the CSLB Registrar has authority to require a disciplinary bond when a contractor has been subject to disciplinary action or has an unsatisfied judgment against them. This bond — ranging from $25,000 to $100,000 — provides additional public protection beyond the standard license bond. The triggering event is prior misconduct or financial non-compliance, not project size, license age, or geographic scope.
Why the Other Options Are Wrong
Option B: When the contractor performs work exceeding $500,000
Contract value is not a criterion for requiring a disciplinary bond. The CSLB's bonding requirements are tied to contractor conduct and compliance history, not the dollar amount of projects performed. Large-project contractors are not singled out for disciplinary bonds absent misconduct.
Option C: Only when the contractor's license is initially issued
A disciplinary bond is not part of the initial license issuance process. New licensees provide a standard contractor's license bond. The disciplinary bond is a remedial measure imposed after violations or unsatisfied judgments occur during the contractor's licensure.
Option D: When the contractor operates in multiple counties
Operating across multiple counties has no bearing on disciplinary bond requirements. California contractor licensing is statewide; geographic scope of operations does not trigger additional bonding obligations under B&P Code Section 7071.11.
Memory Technique
Disciplinary Bond = Bad Behavior Bond. It only kicks in when a contractor has misbehaved (disciplinary action) or owes money (unsatisfied judgment).
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