Contractors License Partnership Changes

What you need to make your contractor’s application move quickly thru the CSLB is sometimes right at your fingertips. You can ‘do it yourself’ but other times, like our second contractor, it’s a good idea to ask an expert. I’ll help him get ‘pumped up’ to add a new classification without taking a test. Finally, there may be a ‘yes’ and ‘no’ answer when you want to start changing a partner’s relationship with the company…

Q: How long would it take and what is the process to change the RMO on our contractor’s license if the new RMO already has a contractor’s license and has been finger printed?

A: You’ll need to file an application for replacing the Qualifying Individual. The likely processing time at present, since the person has already been fingerprinted, is 4 weeks. The Board’s review backlog changes on a regular basis. It will almost certainly run another two weeks, or more, if fingerprints have not previously cleared the review process.

Q: Our company is interested in building gas stations. We are a “B” general contractor. Do we need a special license to build these stations or will the “B” work?

A: A “B” contractor can handle construction of commercial buildings, including gas stations. This assumes you are building the entire structure or at least handling more than two unrelated trades. There is a specialty classification (“C-61″/”D40”) for Service Station Equipment and Maintenance that covers the installation of underground storage tanks up to 20,000 gallons as well as installing the auto hoists, air hoses, grease racks, gas ‘pumps’ etc.

If interested, there is no test for this trade; however, the applicant must show 4 or more years experience.

Q: We have a partnership license. Can we change our Qualifying Partner (QP) to an RME? If not, can we simply cancel this license and apply for a new license with the same business name?

A: Changing the QP to a RME would cause the license to be canceled. Any change of a General Partner (adding or subtracting) results in the license being cancelled. Yes, you can choose to cancel the existing license and reapply for a new one with the same name. (A new license number will be assigned.)

Recent legislation enacted by the State Legislature and signed by the Governor should help small businesses throughout CA. AB 761 (Coto) was signed in October and requires each state agency to establish a 25% goal for the participation of small businesses in the construction of the State’s infrastructure contracts.

The various infrastructure-related bond acts passed by the voters in 2006, set the above goal in order to encourage participation of small businesses in the construction of the state’s infrastructure. This includes, but is not limited to: Highway Safety and Traffic Reduction; Housing and Emergency Shelter; Kindergarten-University Public Education Facilities and Disaster Preparedness and Flood Prevention.

To qualify, you will need to be registered with the State Dept. of General Services (DGS) as an officially recognized “small business”. For information on this program and how to get certified, contact the OFFICE OF SMALL BUSINESS AND DISABLED VETERAN BUSINESS ENTERPRISE CERTIFICATION (OSDC) by phone at (800) 559-5529 or on the web at http://www.pd.dgs.ca.gov/smbus/default.htm

Contractor’s Experience Opens

Experience is often the key to unlocking new opportunity. That’s always the case when contractors seek to add a new classification, secure an exam waiver or apply for a new license. A caution for contractors in our final plea, that comes from a workman who is learning the hard way about unlicensed contracting�

Q: I’m a licensed general contractor (“B”). I am seeking to obtain a “C-33” painting license to start a new, separate, company. I am unclear as to which forms I am required to fill out. I do not want to add the additional classification to my existing license. Should I complete the Application for Original License, Application for Original License – Examination Waiver, or the Application for Additional Classification?

A: If you want to start a second business using a new business name, then file the “Application for Original License”. This is required since you’ll need to show 4 years experience in the “C-33” trade and pass the trade exam. The “Add Class” application would only be filed if you wanted to continue operating under one license with two classifications. The Original App with Exam Waiver could be filed if you already held this class or were hiring someone as the qualifying individual who is a licensed painting contractor.

Q: Does the Board still give waivers to add a “C-9” to a “C-35” license with a qualifying letter? I have over 10 years without a complaint.

A: Yes, Section 7065.3 allows the CSLB to consider a waiver request for a classification (such as the “C-9” drywall) for someone who has an existing classification (such as “C-35” plastering) that is closely related. However, to secure this waiver, takes much more than a qualifying letter. The Board also requires a comprehensive project list detailing your experience with the drywall trade. This must show that you have been actively licensed in good standing for 5 of the prior 7 years. Even so, there is no assurance the Board will approve the waiver request.

Q: I have a situation my friend asked me for help on. He does work for a licensed contractor and he is sometimes referred out to the contractor’s friends who also have licenses. However in one case he accepted to do a job for a contractor who he thought had a license and went in and placed the bid with the homeowner and completed the job.

After the job was paid ($5,300), the homeowners decided they were not happy with the work. The job was done to code and looked good but my friend still fixed the problem. Nevertheless, the homeowners said they still wanted to be reimbursed for the entire job so my friend gave them a check back for half the amount (they cashed the check the next day).

Now, two weeks later the homeowners are suing because he did not reimburse the entire amount stating that since he did not have a license he will have to pay them back. Is there anything he can do since neither he nor the contractor who hired him has a contractor’s license?

A: It does not appear your friend is working for these licensed contractors as an employee; and therefore, is working without the proper contractor’s license. As you describe it, your friend is acting in the capacity of a contractor since his jobs are more than $500.

In this case, the homeowners have the law on their side. The law allows them to sue unlicensed contractors for the entire money paid — regardless of the circumstances. An unlicensed contractor can even be sued if the job is perfect and still would likely lose in court. The law is that strict. I suggest that your ‘friend’ get his own contractor’s license before this type of problem strikes again.

California General Contractors

Readers know that space limitations sometimes reduce how much specific information can be provided for any inquiry. I welcome any questions or need for additional input at any time on the ‘Q&A’ you read here. Hearing from readers is one of the best parts of writing this column. I answer a reader’s request and add to a recent inquiry on “B” licenses¦

Q: I was reading your Q & A for contractor’s column, posted on our local Builder’s Exchange. On the question of whether a “B” license could do electrical work (on a public contract), you stated that he could self-perform the work if the project involved electrical and at least one or more additional unrelated trades. You failed to mention that this work must be done by a certified electrician regardless of who is handling it. So yes, they can do the work but they still need to be certified with the State.

A: Thank you for your email. I appreciate this opportunity to clarify my response from a recent column.

The ‘Certification’ you’re referring to is required if the licensed contractor holds a “C-10” classification. If the “B” were self-performing the work, then his employees would not need to be certified with the Division of Apprenticeship Standards (DAS). However, it the contractor lists a “C-10” sub, then that contractor’s employees must hold the state issued certification.

Q: I know we must register our corporation with the Secretary of State but what about the partnership we just formed? An attorney told us it would be a good idea to also register this company. Is this required?

A: First, I would defer to your attorney on all matters related to filing legal documents with the Secretary of State (SOS). While I deal extensively with the SOS, I am not an attorney and therefore, do not dispense legal advice.

You did not mention whether this is a limited or general partnership, which is important since they’re potentially treated differently.

It is my understanding that all Limited Partnerships (LP) must register with the SOS whereas, according to the CA Secretary of State’s web site, “All general partnership statements filed with the Secretary of State’s Office …. are permissive and not mandatory, at this time.”

Let’s update legislation previously covered in this column and a proposal being discussed by the CSLB.

The Governor signed SB 354 (Margett) last month. This new law authorizes the Registrar of Contractors to order a licensee to pay an injured party if it’s determined that the licensed contractor has aided an unlicensed person in evading CSLB law or has allowed an unlicensed person to use his or her license.

The Health and Safety Code specifies a format for owner-builder permits. The CSLB has been discussing possible legislation aimed at notifying owner-builders of the risks and responsibilities associated with undertaking these “Owner-as-Contractor” building projects.

It is a frequent practice of unlicensed persons to have the property owner obtain an “owner-builder” building permit which erroneously implies that the property owner is providing his or her own labor. To strengthen the current language, it has been suggested that a written warning be given that — among other things would inform the owner that he or she may be held liable and — subject to serious financial risk — for any injuries sustained by an unlicensed person and his/her employees while working on the homeowner’s property.