B&P 7031, LLC’s, Bonds, License Suspension & Expired Licenses

Despite the obvious ‘suspense’ we step up to provide a ‘remedy’ for a contractor worried about ‘hiccups’ in applying for the LLC license. Just in time, we remind all our readers why it is critically important to keep the CSLB up to date on your business address. Failing to do so carries a potentially high price …

 

Q:  We are in the process of obtaining a new license for an LLC.  We have already applied and we anticipate that the license will be issued within a month or so (fingers crossed!).  The bonds on our existing corporate license are due to expire this week.  Since we don’t plan on using the corporate license anymore we are considering letting the bonds expire rather than paying to renew them, which will result in the license getting suspended.  Is having a “suspended” license going to prevent us from obtaining the pending LLC license?  Before we do this I just want to make sure that there are absolutely no hiccups with the pending application!

 

A:  While there are certain instances where having a suspended license could cause some problems when applying for a new license, a suspension due to lack of a bond should not cause any hiccups when obtaining the new LLC license.  As another option you could just cancel the license, which would eliminate the need for a bond and also prevent you from having a “suspended” status on record.

Q:  I have a question about late license renewals.   My license expired last year because we moved and the renewal was never received or forwarded by the post office.  By the time I realized what had happened, and drove to Sacramento to get this handled, my license had been expired for nearly three months.  Everything is fine now, but I’m worried this might cause problems in the future.  Is there anything I can do to get this expiration erased from my record (like what you can do with a speeding ticket)?

A:  Unfortunately, I am not aware of anything you can do to have this expiration removed from your licensing records.  There is no online “traffic school” that magically erases this type of problem.

When you finally renewed your license at the front counter, the form they handed you should have stated: “Delinquent Renewal, Read Section 7141.5 of the Contractors License Law regarding retroactive renewals”.  That would have been the time to make such a request; however, since the reason for the late renewal application was due to contractor error and not a “Board error”, it is highly doubtful they would have granted your appeal.

It is incumbent upon the contractor to notify the Board in writing within 90 days of moving. As you learned, unless the CSLB has a contractor’s address of record, it is very unlikely you’ll receive these important mailings (the Post Office generally will not forward documents from the CSLB).

I hate to be the bearer of more bad news, but your problems may not be over. Business and Professions Code Section 7141 states, in part: “Renewal (of a license) under this section shall be effective on the date an acceptable renewal application is filed with the board. The licensee shall be considered unlicensed and there will be a break in the licensing time between the expiration date and the date the renewal becomes effective.”  In other words, during this “nearly three months,” your license was expired you may be subject to the provisions of B&P Code 7031.  Among other things, this means if you were to get into a legal dispute with a homeowner or another contractor down the road, for work performed during this “unlicensed” time period, you likely will not be able recover any compensation you’re owed.

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