Under B&P 7159.5, what is the maximum amount a service and repair contractor can demand as a down payment for emergency repair work?
Correct Answer
C) No down payment is allowed
B&P 7159.5 prohibits down payments for service and repair work, including emergency repairs.
Why This Is the Correct Answer
B&P Code Section 7159.5 prohibits any down payment for service and repair contracts, including emergency repair work. No down payment is allowed — not a percentage, not a flat fee, nothing. The consumer pays only after the work is completed or according to a payment schedule in the written contract.
Why the Other Options Are Wrong
Option A: The actual cost of materials
Charging the actual cost of materials as a down payment is not permitted under Section 7159.5. Even though contractors incur material costs, the statute's prohibition on down payments for service and repair work is absolute — it does not create an exception for material costs.
Option B: 10% of the total cost
10% is the down payment limit for home improvement contracts under B&P Code 7159, not for service and repair contracts under 7159.5. Mixing up these two sections is a very common exam error. Section 7159.5 is more restrictive: zero down payment.
Option D: $1,000
$1,000 is not an allowable down payment for service and repair contracts. $1,000 appears as a down payment cap in some home improvement contexts, but Section 7159.5 prohibits any down payment for service and repair work regardless of the dollar amount.
Memory Technique
Remember the rule with a contrast: 'Home improvement = 10%/$1,000 down. Service & repair = ZERO down.' The decimal '.5' in Section 7159.5 reminds you that service and repair is a stricter sub-rule. Zero is less than any percentage, and service/repair is the zero-tolerance category.
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