New Law to Tighten Rules and Raise Penalties for Using Unlicensed

In life there are winners and losers. Those working as, or working with an unlicensed contractor usually fall in the latter category. From contractors to consumers everyone loses when unlicensed construction work is sub-standard, violates codes or leads to significant lawsuits when an unlicensed contractor or his workers are injured on your job. I will also explore how the ‘simple things’ can sometimes be the most trouble for two contractors with questions…

I have written about unlicensed activities in a number of columns. Specifically, I have warned that licensed contractors can face penalties if they contract with an unlicensed person. Well, the CSLB is sponsoring legislation that would carry this one step further.

SB 354 (Margett) would amend B&P Code Section 7114 to authorize the Registrar of Contractors to order a licensee to make restitution to an injured party if he finds that the licensed contractor has aided or abetted an unlicensed person. In other words, hire an unlicensed sub and you could be hit with a citation including an order to pay for damages caused by the unlicensed person. This legislation has passed the State Senate and is awaiting a vote in the Assembly.

Among those items covered at the CSLB’s recent meeting in Sacramento, was an update on the Board’s response to the recent Lake Tahoe Wild Fire. The Board’s Enforcement Unit and Public Affairs Office coordinated their efforts to get the word out to fire victims and help protect them from being victimized a second time. These efforts resulted in numerous media events and the arrest of half a dozen unlicensed individuals who were looking to take advantage of burned-out homeowners who had just lost everything.

Q: Can we file an application for a new contractor’s license and list two individuals as RME?

A: As we discussed, in your situation, the answer is NO. Since one of the qualifiers is licensed and the other one must take an exam, you cannot file an application listing both individuals. I recommend filing the application with the currently licensed person, securing the new license number and then adding the RME who must sit for the exam.

If both RME’s were already qualified, then it would be acceptable to use one application. However, a note of caution: the CSLB application is not set up to list more than one qualifier — even with no testing. For example, if you’re forming a new corporation and have one person who holds the ‘B’ and a second person who holds a ‘C-10′ electrical, you will have trouble listing both separately on their standard form. Should you be faced with this dilemma, call me and I’ll walk you through how to best deal with this situation.

Q: I’ve had a contractor’s license in my own name for 21 years. My accountant recommends that I incorporate. Can I simply transfer my old sole owner license number to the new company? I went on the CSLB web site and downloaded an application to change business name. Is this the correct form I use?

A: Although, you will ‘simply’ be adding the word ‘INC’ to your existing business name, the ‘name change’ application is NOT the one you use. You will need to file a new original license application, post a new bond and Worker’s Comp certificate, complete a form transferring the license number and pay the CSLB a $400 fee. No testing will be required.

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