Contractors License Waiver, Fees and Liens

With aggressive ‘stings’ the CSLB is taking a toll on unlicensed contractors in seeking to protect California consumers from shoddy work, lawsuits and outright fraud. Will experience in this ‘underground economy’ stand the light of day when applying for a license? We also learn how a ‘family’ waiver applies to a corporate license. Two contractors help us recall some basics about ‘fees’ and liens…

Q: Can you please email me information regarding licensing a corporation as opposed to licensing an individual? Is there a difference?

A: Basically, there’s little difference administratively between licensing a corporation and sole owner with the CSLB. With both you’ll be required to complete and file an original license application; pay a $400 state fee; post a $12,500 Contractors Bond; test if required; and file a Certificate of Worker’s Compensation, if you have employees (for corporations, a registration number from the Secretary of State will also be necessary).

The key is becoming licensed for the type of business entity that will be handling construction and signing contracts. From a tax or legal perspective I recommend consulting a lawyer or tax specialist regarding any differences in business structure and organization.

Q: I just read one of your columns that references “working for cash”. My husband submitted his license application and has come up for investigation. Do you have any recommendations on how much we need to submit? How does he prove his time that was paid under the table by a company that is no longer in business?

A: I would suggest giving the Board as much information on your husband’s background as you can. This would include tax returns, W-2, 1099’s, permits, etc. Unfortunately, the Board rarely counts experience that cannot be verified including “working for cash” under the table.

Q: I have a general question regarding the Preliminary 20-Day Notice. Is this notice only submitted to the consumer or does a copy also need to be on record with the CSLB?

A: You do not need to file this or any other lien notice with the Contractor’s State License Board.

Q: I came across your web site and read about the “family waiver”. My father is retiring and I want to take over the family business. I have worked for him over 15 years. Can you give me more information and let me know if you think this waiver is possible.

A: The waiver is not only possible it would be likely given your background and the number of years (25) this license has been in existence. However, my research indicates that since your father is licensed as a corporation — not a sole owner — the “family waiver provision” (subsection b) of B&P Code section 7065.1 does not apply.

Nevertheless, a different portion of this section (Subsection c) still allows for an exam waiver because you have been working for the company for over 5 (of 7) years in a supervisory capacity and want to apply for the two classifications presently held by the corporation. As with any waiver request, there is no assurance it will be granted since this can only be determined after a completed application has been reviewed and accepted by the CSLB (in this case for Replacing the Qualifying Individual).

Q: What is the State fee to reactivate my CA contractor’s license? Also, how do I get the proper form to do this?

A: To reactivate an Inactive contractor’s license, you can call or write to the CSLB or visit their public counter in Sacramento. The Board prints these application forms upon request. The state fee is $300. Plus, in most cases, a current Contractor’s Bond will also be required to bring the license back to an Active status.