MHIC NASCLA Contractors Practice Exam 2026 - Free Contractor License Practice Questions and Study Guide

The maximum amount of time allowed for a contractor to retain a deposit before the project's completion is indeed until the project is completed. In many jurisdictions, laws are in place to protect consumers, preventing contractors from holding onto deposits for unnecessarily long periods. This ensures that homeowners are not unfairly impacted by delays or disputes that could arise during the project.

Contracts typically outline the terms under which deposits are collected and retained, but the overarching legal expectation is that deposits should only be held until the services contracted for are fulfilled. By allowing the contractor to retain the deposit until the project is completed, it provides security to the contractor while also safeguarding the homeowner's investment, ensuring that they receive the work they are paying for without undue delay in accessing their funds. Other options, such as having a fixed time limit like 30 days or 90 days, do not apply since the retention period is determined by the completion of the work itself rather than arbitrary time frames.