CA Contractors License renewals; Joint Venture Licenses

While there is no ‘national’ contractor’s license, you can ‘stretch’ your California one. Did you move offices or otherwise change your business address? If you did, don’t expect CSLB to track you down when it’s time to renew. If you’re a carpenter you know your woods, but every contractor no matter their trade should know this ‘Board’…

Q: Do you know what the requirements are for a bond company to respond to bond claims? Is there a limited time they have to respond once they’ve received a claim?

A: It is my understanding that surety companies have 30 days to respond to a claim filed against a contractor’s bond. They may honor the claim, deny the claim or request additional information on which to base their response.

Q: Does California have a reciprocal contractor agreement with Washington? If so how does it work?

A: Sorry, but CA does not have a reciprocal licensing agreement with the State of Washington. They only reciprocate (for the trade exam) with Nevada, Arizona and Utah.

Q: Our license is coming up for renewal next month and we have not received anything from the State Board. We recently moved our office (down the street) and wonder if this might be the reason. Any idea?

A: The CSLB generally sends out renewal applications 60-75 days prior to the expiration date. In other words, for those whose license will expire on May 31; look for your renewal at the end of March or beginning of April. Renewals are sent to a contractor’s address of record. In your case, it has already been sent – and because you moved, likely returned by the post office.

Whether you move down the street or out-of-state, contractors should officially notify the Board of any address change by filing a Changing Business Name and/or Address form. The law requires contractors to notify the CSLB within 90 days of changing your physical or mailing address.

Q: Can we form a Joint Venture with another contractor who has not yet been issued a license? Can we bid on a contract as a joint venture before we actually have our license number?

A: The answer to your first question is NO. A Joint Venture (JV) license can be issued to any combination of individuals, corporations, partnerships, or other joint ventures if each holds a contractor’s license that is current, active and in good standing.

Your second question is addressed in B&P Code Section 7029.1, which states that properly licensed contractors may jointly bid PRIOR to obtaining a joint venture license The JV may not however, be awarded a contract without first securing the appropriate license. If the bid and award dates are close together, it is advisable to apply for the JV license early on in the bid process.

Know Your Board Members

The Chairman of the CSLB is Jim Miller. He serves as the Director of Building and Planning for the City of Big Bear Lake. Prior to his current employment, Mr. Miller held various local government positions. This included: Riverside County’s Director of Building and Safety; Development Services Director for the City of Murieta; Pomona’s Building Official and Regional Manager and Building Inspector for Riverside County. Governor Schwarzenegger appointed Mr. Miller, whose term continues through June 1, 2009, to the CSLB in September 2005.

California Contractors License Board News

While contractors take care of business each day, important discussions about them and their work are taking place. For those who must be ‘on the job’ and are unable to attend these meetings of the California Contractor’s State License Board (CSLB) this will be a ‘good read’ as you learn of improved efforts to keep the playing field level and unlicensed contractors ‘off the job’…

The CSLB recently held its quarterly meeting in San Jose. As part of a new information-sharing program, the Board has instituted an “Industry Update”. Larry Rohlfes, Assistant Executive Director of the CA Landscape Contractors Association, was one of the featured speakers. He discussed his Association’s work with the Board; efforts to combat unlicensed contractors; and how the issue of immigration reform might affect the construction industry.

During the Enforcement Program Update, the head of Enforcement, David Fogt, highlighted efforts the CSLB is making to partner with local city attorney offices such as Los Angeles and Ventura. These efforts have resulted in streamlining prosecution of unlicensed contracting cases. Between the two jurisdictions, over 200 cases were filed in 2007 resulting in a majority of convictions and close to $1 million dollars in restitution awarded to consumers who had been ripped off. There are still a number of open cases and pending bench warrants, which upon conviction, could result in an additional $770,000 restitution in Ventura County alone.

It was reported that there has been a reduction of illegal contracting activities in disaster areas including the Angora fires in Lake Tahoe in June and the wild fires throughout Southern California late last year. This can be attributed to the Board’s proactive approach including: educating homeowners; partnering with relevant local, state and federal agencies; participating in community forums and conducting Sweeps throughout the affected areas.

It was also reported that the Statewide Investigative Fraud Team (SWIFT) closed out 2007 with a record number of stings (51) and sweeps (60) resulting in over 1000 legal actions against unlicensed individuals (also a record!).

Fingerprinting continues as it has since the program started in January 2005. This has resulted in over 20 thousand reports (from DOJ/ FBI) that an applicant had a criminal conviction in his or her past (even though it may have been minor, expunged or decades ago). The Board has denied 726 applications (1/2 of 1% of all applicants).

Know Your (CSLB) Board Members.

The Contractors State License Board is part of the State Department of Consumer Affairs. This is a 15 member Board consisting of 9 public members, 5 contractor members and 1 labor representative. They direct administrative policy and appoint the executive officer, or Registrar of Contractors. For the next several months, I’ll periodically highlight one current Board member.

Ed Lang is a public member from Rancho Cordova (in Sacramento County). Governor Schwarzenegger appointed him in January 2007 and his term continues through June 1, 2010. He retired as a supervisor for the Franchise Tax Board where he worked in various positions for over 20 years. Previously he was an adult education instructor for the Folsom Cordova Unified School District from 1976 to 1982 and served in the Air Force from 1960 to 1980. Mr. Lang also serves on the Board of Directors for the InterCity Housing Corporation.

Successfully Completing Contractors Licensing Applications

Was it Mom, or perhaps the bureaucracy that wants, ‘a place for everything and everything in its place?’ Both, right? A contractor’s license application is no exception to that rule. Both a family of contractors and a ‘former’ one will learn that sometimes what looks easy is harder than you might think…

Q: My father in-law would like to add my husband to his contractor’s license and also allow my husband to replace him on the license when he retires. Can you please tell us the easiest way to go about this?

A: If your father-in-law has a corporation license, it will be very easy to add your husband. All he needs to do is complete an Application to Report Current Officers. There is no fee for this. Shortly before your father-in-law retires, your husband can complete an application for replacing the qualifying individual. He will need to document at least 4 years experience within the past 10 and pass the required law and trade exams.

If your father-in-law has a sole owner or partnership license, the only way to “add” your husband is to apply for a new license.

Q: I read on your web site that you have experience with the Arizona Contractors Board. Well, I have been dealing with them and have become very frustrated. They returned my application for two reasons and I’m not sure what I should do. For instance, one question on the application says, “List all owners of 25% or more”. I left it blank since there are none. A second asks if I have ever had a license in AZ or another state that “has been disciplined” (explain if YES). I answered NO.

They rejected the application because both questions were left blank. How do I respond?

A: Sorry to hear about your problems dealing with the Arizona Registrar of Contractors. I too have noticed several recent instances where the AZ Contractors Board has rejected an application for similar reasons, you described.

In one case, an application was returned to the contractor for failure to respond to the same question you referenced — #11). On page #2, the application clearly states: “IF NOT APPLYING AS A CORPORATION OR LIMITED LIABILITY COMPANY GO TO QUESTION 12”. Since the company was applying as a limited partnership, the applicant rightly assumed question #11 did not apply – and left it blank.

Regarding how you should respond, I can only suggest that you re-submit the application and politely point out in a letter why you believe these questions do not apply. You could put N/A on both to make clear that these questions are not being ignored.

Q: My license was revoked a number of years ago. I was dealing with a divorce and did not respond to the issues raised by the CSLB. Is there anything I can do now to appeal this decision and get my license back? I have a job as a project manager but want to begin doing my own building.

A: Unfortunately, once a license is revoked you have less than a month to appeal the Registrar’s decision. Once it becomes final, there is nothing you can do. To re-apply for your license, you need to first find out what conditions the CSLB has set. Depending on the reason(s) behind the revocation, these may include restitution, payment of a citation and (certainly) posting a disciplinary bond. I suggest writing a letter to the CSLB asking point blank “What do I need to do to get my contractors license back?”

As an aside, you may wish to consult with an attorney, to determine if B&P Code section 7121.6 applies to your employment as a project manager. Effective, January 1, 2007, the CSLB has restricted the activities for those with revoked licenses.

California Contractors Licensing Fingerprinting

‘Breaking up is NOT hard to do’ when it comes to a ‘shared’ contractor’s license. Another contractor learns you must ‘ink’ a fingerprint card long before any contracts. Finally, an important warning for contractors about a ‘phishing’ scam…

Q: Thanks again for your guidance in getting us started with the licensing change for our corporation.

As a follow up to our conversation last week regarding setting up a new company, I mentioned that our qualifier would need to be fingerprinted. I cannot recall whether or not we need to complete/submit forms to begin this process. Can you enlighten me where this is handled and also, once this is done, to whom do we send the fingerprinting information?

A: The CSLB will send out Live Scan fingerprint forms AFTER an application has been accepted (posted). Once an applicant is fingerprinted, everything is handled electronically. All you’ll need to do is submit a copy of the Live Scan form to the CSLB as proof that the fingerprinting was completed. There are hundreds of Live Scan locations around the State. Visit my web site (www.cutredtape) for a link to all locations. Note, for non-CA companies, there is a choice between in-state Live Scan and the “old-fashioned” out-of-state card method.

As I’ve mentioned previously in this column, fingerprints can be cleared through the CA Dept. of Justice (DOJ) and FBI as quickly as one day. Or it may takes weeks (or even months) if the prints cannot be read or the applicant has a criminal background which triggers a review by the CSLB or one of the agencies referenced above.

Q: I read that my license number must be included in all construction contracts, subcontracts, bids and all forms of advertising “as prescribed by the Registrar of Contractors”. Do you have any idea what this all includes?

A: You likely read Business &Professions (B&P) Code section 7030.5. Board rule 861 explains that the term advertising includes but is not limited to, “…any card, contract proposal, sign, billboard, lettering on vehicles(registered in this, or any other state), brochure, newspaper”… In other words, most anything distributed to or viewed by the public that contains your business name, address, phone, etc.

Q: I want out of a license partnership. We obtained the license a year ago, and it has not worked out as planned. What would you recommend as the best – and fastest — way to cancel the license? Will I need the other partner’s signature?

A: You can either file a Notice of Disassociation with the CSLB, which, for partnerships, has the affect of canceling the license or you can complete and file a “Cancellation Notice”. Either of these forms can be filed with just your signature. Both forms are available on the CSLB website.

(Like scam artists attempting to gather your personal or financial information from fake internet pages or e-mails that look ‘official’, there are others more ‘old school’ in using the telephone for a similar purpose.)

My Warning: I have received several inquires this past week from applicants who received a call from someone purporting to be from the Contractors Board (it turns out he was not). Unless, the Board needs a simple clarification on your application, the CSLB will correspond with applicants in writing regarding exam dates, etc. CSLB employees will not call to tell you your application has been accepted or fingerprint information has been sent, nor will they ever attempt to sell you anything or ask for a credit card. Be cautious if you get a call of this nature and ask point blank if the person works for the State of CA!