Under ORS 701, what is the maximum amount a residential contractor can collect as a down payment before starting work?
Correct Answer
B) One-third of contract price or $1,000, whichever is less
Oregon law limits residential contractor down payments to one-third of the contract price or $1,000, whichever is less.
Why This Is the Correct Answer
Under ORS 701, Oregon law specifically limits residential contractor down payments to protect consumers from excessive upfront costs. The statute establishes a clear ceiling of one-third of the total contract price or $1,000, whichever amount is less. This dual limitation ensures contractors cannot demand large sums before beginning work, reducing financial risk for homeowners while allowing contractors reasonable funds to purchase initial materials and cover startup costs.
Why the Other Options Are Wrong
Option A: No limit on down payments
Oregon law does establish specific limits on down payments for residential contractors. Having no limits would leave consumers vulnerable to contractors who might demand large upfront payments and then fail to complete work or disappear with the funds.
Option C: 10% of contract price or $1,000, whichever is less
While this option correctly identifies the $1,000 cap, it incorrectly states the percentage as 10% instead of one-third (33.33%). The 10% figure is not the statutory requirement under ORS 701 for residential contractor down payments.
Option D: 50% of contract price
Fifty percent of the contract price would be excessive and is not permitted under Oregon law. This amount could create significant financial hardship for consumers and exceeds the protective limits established by ORS 701.
Memory Technique
Remember 'One-Third or One-Thousand' - the two 'ones' help recall that it's 1/3 of contract price OR $1,000, whichever is LESS.
More or-supplement Questions
Under ORS 701, what is the minimum amount of public liability insurance required for a CCB licensed contractor?
An employee is injured on a job site. The contractor's workers compensation premium was $2,400 annually. If they were operating without coverage, what is the minimum penalty multiplier applied to the premium?
A contractor completes a $12,000 deck project but the homeowner claims defective work. Under ORS 87, how long does the contractor have to file a lien for unpaid amounts?
A homeowner cancels a $8,000 roofing contract within the 3-day right to cancel period. The contractor had already ordered $1,200 in custom materials. How much can the contractor retain?
A general contractor hires a subcontractor who performs $15,000 worth of electrical work. The property owner pays the general contractor but the general contractor fails to pay the subcontractor. Calculate the subcontractor's maximum lien claim under ORS 87.
A renovation project in a 1972 home will disturb 15 square feet of painted trim. The contractor is not RRP certified. What must they do under Oregon lead regulations?
What is the minimum experience requirement for obtaining an Oregon CCB contractor license?
A homeowner hired an unlicensed contractor who abandoned a $25,000 project. The homeowner wants to file a claim with the CCB. What is the likely outcome?
A residential contractor completes a $35,000 kitchen remodel but fails to obtain required permits. Under Oregon law, what is the potential penalty?
Under Oregon residential contractor requirements, what is the minimum bond amount required for a CCB license?
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Previous Question
A contractor receives a $28,000 residential contract and collects a $1,500 down payment. Under Oregon law, the contractor must begin work within how many days or return the down payment?
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