Landscape Design Landscape Business and Contracts 2

Question 1

What is a 'retainage' clause in a landscape construction contract?

Accepted Answer

A percentage of each payment withheld by the client until project completion, ensuring the contractor finishes the work to specification

Answer

Retainage is a percentage (typically 5–10%) withheld from each progress payment until the project is substantially complete and any deficiencies are corrected, incentivizing contractors to complete and finish work properly.

Question 2

What does 'bonded' mean when a landscape contractor states they are 'licensed, bonded, and insured'?

Accepted Answer

The contractor has purchased a surety bond that provides financial protection to clients if the contractor fails to complete the work or pay subcontractors

Answer

Being bonded means a contractor has purchased a surety bond — a form of insurance that compensates clients if the contractor abandons a project, fails to complete work, or doesn't pay subcontractors.

Question 3

What is 'overhead' in landscape business cost accounting?

Accepted Answer

Indirect business expenses not tied to a specific job (insurance, office rent, vehicles, admin salaries) that must be covered by project revenue

Answer

Overhead consists of indirect operating costs — insurance, vehicles, office expenses, marketing, administrative staff — that support the business but aren't directly attributable to a specific project.

Question 4

What is a 'maintenance contract' in the landscape industry and what does it typically include?

Accepted Answer

An ongoing service agreement specifying regular maintenance tasks (mowing, trimming, fertilizing, seasonal cleanups) performed on a scheduled basis for a recurring fee

Answer

A landscape maintenance contract is a recurring service agreement specifying the tasks, frequency, and cost for ongoing landscape care, providing predictable revenue for contractors and regular service for clients.

Question 5

What is the purpose of a 'certificate of occupancy' (CO) in relation to large landscape projects?

Accepted Answer

A municipal document confirming a construction project meets all code requirements and is safe and legal to occupy or use

Answer

A Certificate of Occupancy is issued by the local building authority certifying that a structure or improvement meets all applicable building codes and is safe for its intended use, sometimes required for significant hardscape additions.

Landscape Design Practice Test

Landscape Design Practice Test

Landscape Design Landscape Business and Contracts 2