Down Payment Limits, “C-16″, “C-34″ & General Engineering “A”

When a contractor finds a situation that defies understanding, who are you going to call?  Over the years our readers have found answers here and learned plenty from the misfortune of others. We go in depth for our first contractor’s inquiry, and discover if your materials supplier can demand a large down payment?..

 

Q:  We are looking for help in clarifying the license requirements for the following: One of our customers is upgrading their existing underground fire lines within their property.  It is a large site with multiple buildings.  The new lines for this portion of work would tie into existing underground fire lines and run to either an exterior fire hydrant or exterior post indicator valve (PIV).  At no time would we be installing the line to the interior of the building or altering any of the existing interior fire or alarm systems. It is strictly underground water piping, valves, vaults, and fire hydrants.

 

In this case would a class “A” (General Engineering) license be sufficient for the work or would a “C-16” license be required? Our problem is that the City is telling us we must have the “C-16” class.   For your information, we also hold a “C-34” classification. Thank you for your time and efforts on behalf of contractors.

 

A: Nice speaking with you this afternoon.  In our opinion you can definably handle this type of work with an “A” or “C-34” classification.  While a local building department may have more stringent requirements than the Contractor’s Board, your company should be able to move forward on this project without the “C-16”.  Michael Brown, a former Board employee who worked for the CSLB for 25 years, backed up this opinion.   The current CSLB Classification Deputy also feels your current classifications are proper.  He stated, “if the scope of work is underground piping that supplies the fire suppression system, then the “A” or “C-34” may perform this scope of work”.

Q: I love to read your columns in our local builder’s exchange and thank you in advance for any insight you may be able to offer.

It is my understanding that as a supplier, (not an installer in any way, shape or form) we can collect deposits for material that must be special ordered.  Our problem is that sometimes the material can take 8 to 12 weeks to arrive and then may sit in our yard for weeks more before the Contractor is actually ready for it. Typically we require a 50% deposit to place the order, and when the material arrives in our yard, we invoice for the balance of the material.  Are we doing anything that could get us in hot water?  What is the appropriate B & P code that can be cited for this issue?   I realize the contractor has limitations (10% of total job?) that they may collect as a deposit.

A Thanks for your email. Your question is very timely in that the CSLB just issued a press release warning consumers “Not to pay more than 10% up front”. However, as a material supplier, we’re not aware of any restrictions regarding how much of a down payment you receive from a contractor or homeowner.  As referenced in one of our prior columns, B&P Code 7052, exempts suppliers from, what would otherwise be, a 10% deposit restriction.  We hope this information helps.

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