California General Building Contractor

The law is ‘alive’. By that, I mean the rules and regulations contractors must follow change and evolve as time goes by. As our contractors learn today, some of those laws change often, some not so much. However, as any fisherman knows from experience, ‘living’ things can be slippery and hard to hold onto…

Q: One of your recent columns was very helpful to our company. I was hoping to get some clarification regarding general contractors being able to bid on projects for specialty work. Does this mean that contractors with a “B” license are able to bid on projects for specialty work (plumbing, electrical, concrete, etc.) as long as the contractor lists the specific subcontractor for that work? Thank you for your assistance with this question.

A: Yes, Code Section 7057 allows “B” contractors to take a contract or subcontract for a specialty trade if they hold the appropriate license classification (“C-36”, “C-10”, “C-8”, etc) or “subcontract with an appropriately licensed contractor to perform the work”.

Q: I am a member of my local Builder’s Exchange. I have a question about my “B” license. I want to subcontract to a General Contractor for the framing of a project. I know I can do this as a sub. But I also want to bid on the foundation (concrete) for the project. Can I give the Prime Contractor a bid for both the framing and the concrete with my “B” license? I thought I could but now I am worried that maybe something has changed.

A: Nothing has changed recently; however, substantial changes have been made to the general building contractor definition (B&P Section 7057) within the past decade. As a “B” you can certainly take a prime or subcontract for framing; however, to include concrete as a second trade would not be proper (unless you hold the “C-8” or list a subcontractor who is appropriately licensed). Any subcontract or bid should include TWO (2) or more unrelated trades OTHER than framing or carpentry. Please call me personally if you would like further information or clarification.

Q: I have been a corporate officer for an electrical contractor for 5 years. Can I apply for an examination waiver and if so what do I need to do? Under “Blueprint for Becoming a Licensed Contractor 2005 Edition” Item 27 says only immediate family members qualify for a waiver.

A: As of September 2003, being an officer of a corporation no longer allows you to apply for your own license with an exam waiver. B&P Section 7065.1(c) does however, allow — under strict circumstances — for corporate officers to apply to replace an existing qualifying individual with a waiver of the law and trade exams. You must be able to document continuous full time employment – in a supervisory capacity — for 5 of the prior 7 years; the license must have been active and in good standing for this time period; and the corporation may not have requested this waiver within the past 5 years.

Section (b) of this same Code section allows for an exam waiver by immediate family members to “continue the existing family business in the event of the absence or death of the licensee”. Again, other strict licensing requirements apply.

Lowdown on Low License Numbers

I wouldn’t try to make a violin from scratch. That skill takes time, practice and hard work to learn, particularly those little ‘tricks of the trade’. It’s what we think of as ‘working’ knowledge. Working with contractors and the Board for more than 25 years has given me that same type of ‘skill’ when it comes to applying CSLB regulations. Like the first contractor notes, simple changes in how you apply for a license can require ‘sound’ advice to avoid long-term problems…

Q: In a recent column (North Coast Builders Exchange) I notice you direct the questioner to a different form and procedure to transfer a 21-year-old license. Would not the applicant be better off to “Qualify” a new license with the newly formed corporation, thus retaining the lower number in the event of un-incorporation at a later date? I understand the corporate license “dies” with the corporate demise. Some of us understand the value added of a low license number. Your thoughts? By the way, your column is the first thing I read every week. Keep up the good work.

A: Thank you for reading my column and responding with your comments. Nothing pleases me more than direct reader feedback. The issue of whether to transfer an older sole owner license to a new corporate license is a personal choice each applicant faces. On the one hand, having a license number that is 20 or 30 years old would show that the corporation has some history and experience rather than being issued a new number over 900,000. On the other hand, like you mention, “in the event of un-incorporation at a later date” this old number would be lost.

Applicants often ask me what is the best thing to do in this situation and my answer is always the same: This is your choice! I can point out the pro and cons, but ultimately it is up to the contractor to make a ‘sound’ decision.

Q: I currently have a “B” contractor’s license under my construction company. I just purchased another company and would like to get a “C-61” license. Does having a “B” qualify me to take the law exam to get the “C-61”? Or do I still need the 4 yrs? Have any ideas?

A: You can add the “C-61” class to your existing “B” license to handle this specialty work or you can apply for a new license if you want this separated from your general building work. There is no need to retake the law exam and the “C-61” (limited specialty) has no trade test; however, you will need to show 4 years experience in this field to qualify for the license. Unless you have been handling this type of work under your “B” or have — within the past 10 years — handled this work aside from your licensed contracting, I do not know how you will qualify. Maybe the person you purchased the company from will agree to become your qualifier until which time you have the requisite experience? That’s at least one option.

The 4-1-1 on BQI

The contractor that will build the first time machine hasn’t come along yet as far as I know. However did you know some contractors can ‘go back in time’ and retrieve their ‘original’ license number — even though that license expired years ago? What’s the ‘411’ on a BQI? How many corporate contractors know if they need a BQI? It could depend on how much ‘stock’ you hold in the business…

Q: I have heard that the CSLB will not renew a license after 5 years. Where in the law is this limitation written? My sole owner license expired in 1999 and I would like it back.

A: B&P Code Section 7141 states, “a license that has expired may be renewed at any time within five years after expiration by filing an application for renewal.” If the license is not renewed within five years, the licensee will need to file an Application for Original License. Since the prior license was for a sole owner, you can request that the license number be re-issued.

Q: I just received a letter from the CSLB stating my license will be suspended due to a bond cancellation. I called my bonding company and they are willing to re-issue a new bond. What is the best way to handle this to make sure my license remains in good standing?

A: Since the bond cancellation is not due to take effect for a few more weeks, it is best to have your insurance company file a renewal of your existing bond rather than a new bond with the Board. By filing a renewal, there should be no break in the bond meaning no suspension on your record. For your information, had the cancellation taken place and you filed a renewal – or new bond – after 90-days, a lapse in your license would appear. The CSLB is able to accept a “back-dated” bond within ninety days of expiration or cancellation.

Q: On our Application For Original Contractor’s License we marked the RMO box for each qualifier. Aren’t BQI bonds only required if the qualifier is an RME? Should the Application be changed to RME for these two? Is there an ownership percentage where these bonds would not be required?

A: Thank you for the call. Since all personnel on your application have corporate titles both qualifiers are by definition, Responsible Managing OFFICERS (RMO). The need for a “bond of qualifying individual” (BQI) is based on percentage of ownership not whether the qualifier is a RMO or RME (Responsible Managing Employee). Since neither qualifier actually owns any stock in this company, both are required to post these bonds. If one or both owned more than 10% of the equity in this corporation, a BQI would not be necessary.