California, Nevada, Arizona Contractors Licensing/Financial Requirements

No matter how hard I try I just can’t be in two different places at the same time. However, did you know a contractor sometimes can qualify two licenses at the same time? Another contractor wants to work in three places, but found the California application a little ‘weird’ after applying in Arizona and Nevada…

Q: I recently purchased a company and the previous owner holds the license in his name. I have over 4 years in this career. Can I replace the qualifier on the license, since I now run this company?

A: Thank you for the email. Under some circumstances — with 4 years experience at a journeyman level or above — you can apply to replace the present qualifier. However, if the company you purchased is a sole owner license “in his name”, then you will need to apply for a new license in your (or your company’s) name. Further, if you bought a corporation as an asset (rather than stock) purchase, you’ll need to apply for a new license and cannot assume the previous owner’s license number.

As indicated, there are many variables when purchasing an existing company. If you would like to further discuss your licensing situation prior to buying a company call me at 866-443-0657.

Q: A quick question: We intend on submitting a license application for our new entity, and would like to name the “old” company qualifier as the RME. Will doing so effectively terminate our current license, or can one qualifier serve in the same capacity for two different entities?

A: Listing the same person as qualifier on two different licenses simultaneously is reviewed by the CSLB on a case-by-case basis. Sometimes they allow this while other times they say no depending on a number of different factors, including what code sections may apply. You can list the “old” qualifier on the new application with the provision that he will only be removed from the current license upon issuance of the new license. In this way, the qualifier will only be on one license at a time.

Q: I just finished my application process for Nevada and Arizona. I’m now looking at obtaining a license in California. It does not appear that reviewed/audited financials are required (or there is even a form) for this information. I find that odd – can you please confirm? Thanks!

A: No financial reports are required for licensure in CA. The only requirement in this regard, is responding YES to a question on the application, which asks, “Does your operating capital exceed $2500”. California has determined that this is the minimum amount a contractor must have to be considered financially solvent. This has been the dollar amount for over 20 years, so an adjustment may be in order. In NV, your bid or project limitations are dependent upon the financial data presented to the Contractors Board (i.e. bank statement and financial statement). If your bid limit will be under $1 million, a compiled statement is fine. The reviewed/audited are needed if the limit is over $1,000,000.

Multiple Active Contractor Licenses

Giving your contracting business a name has definite requirements and certain limitations in law. So how do licensed contractors decide what to name a new company when they have joined forces? If you’ve seen the red lights flashing in the rearview mirror, will that traffic ticket affect your license application? Maybe yes, maybe no. Can a RMO have two active licenses at one time? We review the basics…

Q: Thanks for the enjoyable reading. I enjoy your column in California Builder & Engineer. In my years of working as a contractor, I have seen the need to familiarize myself with the Boards rules and ‘regs’.

I have a brief question. I have held both an “A” & “B” License for over 30 years. I am thinking of applying to add a “C-8” and I know I would be given a waiver for both tests. Would I now have to do fingerprints and do minor traffic tickets constitute a yes answer? I’ve had nothing more than 2 moving violations in 40 years.

A: Thank you for reading the column and your kind words.

The Board does not just hand out waivers as you implied. With both general licenses, applying for an additional “C-8” (concrete) class will likely result in a waiver of the trade test; however, the CSLB requires a good deal of paperwork as part of the application process. This includes documenting up to 25 projects, or more –involving concrete work — over the prior 5-7 year period. Concrete would need to be shown to be a significant part of your construction experience.

Applying for this license would trigger fingerprinting. If all you have are minor traffic violations like those described below, then you could answer “NO” to question #11 on the license application. Note, if someone filing an application for licensure were to have a more significant traffic infraction, like a DUI, then a “YES” response would be in order (even if the incident happened 30 years ago or was expunged).

Q: Is it possible for a Responsible Managing Officer (RMO) to acquire a new license with a new company if they are a 100% owner of the original company. Would the license need to be active or inactive?

A: It is certainly feasible for someone to become the qualifier on two licenses at the same time. For the RMO to keep his or her existing license active, they’ll need to own 20% or more of the new company. If not, the existing license will need to be inactivated (or the RMO could disassociate).

Q: I have a question about joint venture licenses. My company will be forming a joint venture to bid on an upcoming public works project. We were told that the CSLB has restrictions on the business name we can use. If true, what are they? Also, do we need to list all classifications held by my company and my venture partner (between us we hold 5)?

A: The CSLB will accept the following type of names for joint venture (JV) licenses: a) combination of both joint venture contractor names exactly as they are licensed with the Board; b) partial names of each JV entity; or c) a completely fictitious name. They will reject any application that contains the full name of one entity but only a partial name of the second company. You may list one, several or all classification held by the companies.

California Contractor Licensing RMO Replacement

Hopefully, you enjoyed a great holiday and New Year’s celebration. As each year begins new joys and new tests remain ahead for all of us. As we learn from our first questions of 2008, contractors need to be prepared to deal with unexpected change and new challenges to keep their license in good standing…

Q: I am hoping that you can help me with a California Contractor’s License question. I work for a corporation that has experienced the death of the license holder. He was the Responsible Managing Officer (RMO)/President and his wife is on the license as the Secretary / Treasurer. Is it possible for the listed Secretary to continue the license? Is testing needed? She has been affiliated with the company since it was issued over 10 years ago. What are the procedure and forms that are needed for the business to continue and the existing contracts to be completed?

A: I am sorry to hear about your loss. There is a process to follow to notify the CSLB and to replace the RMO on this license. While license law requires that a company notify the Board of any change in officers within 90 days, I would suggest contacting them ASAP!

It is best to file the Application for Replacing the Qualified Individual naming the new RMO along with a copy of the death certificate. The new qualifier will need to certify at least 5 years full time experience within the past 7 (years). Since the wife has been listed on the license she may be able to secure a waiver of the law and trade exams. It all depends of what you mean by “affiliated with the company”. For an exam waiver, the new qualifier must have been actively involved in the business and able to show supervisory experience in the trade presently held by the corporation. If the replacement is completed within 90 days, the license should remain in good standing and existing contracts would not be adversely affected.

Q: My father is a licensed contractor (both “A” & “B”) in CA. He would like to become certified for mold removal. I am unable to find the link for him to take the test through the State Department of Health Services (DHS) web sites. Can you please reply back and let me know where I can find this information.

A: At the present time I am not aware of any testing requirements through Dept. of Public Health (CDPH) or the CSLB for Mold Removal Certification. Here is a link to the state’s Environmental Health Laboratory Branch Indoor Air Qualify Program, which includes a number of Mold related issues. I hope this helps www.dhs.ca.gov/iaq/default.htm

Q: Thank you for your timely reply to my prior questions! I understand if I get my “C-6” license I would be able to do all cabinet / carpentry work that I need; however, I currently do a lot of miscellaneous projects that would not fall under the “C-6” license such as plumbing, electrical, drywall etc. If I kept those jobs under $500 would I be ok legally? What if I had my “C-6” license and was doing a job and installing a bunch a cabinets and during the job they asked if I could do some plumbing and it came out to $850. Could I bid the plumbing in two groups of $400 and $450?

A: If you become licensed as a “C-6” you’ll be able to handle all aspects of Cabinet, Millwork and Finish Carpentry. As a licensed contractor, the “minor work exemption” disappears so it would not be legal to handle other trades (plumbing, drywall, electrical, etc.) even if the work was under $500. Also it is not proper to separate a contract in order to have each part fall below this threshold.