Partnership California Contractor Licensing

When husbands and wives can’t live together they get a divorce. What about licensed business partners? What then? As home building has cooled other areas of construction are heating up in California as contractors seek new opportunities. For many contractors a new license may be required. However, soon if you do not submit the most recent CSLB application expect to immediately return to square one and start over…

Q: What is the easiest way for two partners who no longer wish to be in a partnership together to start their own construction businesses? What applications/forms need to be filed by each partner? One partner is qualifier and the other is a general partner. Can each partner get a new license with no testing? Can we still go on with the current license until all work is done and everything split up equally? Can the qualifying partner keep the existing License number and name? The CSLB website does not seem to cover these questions so all information you can provide would be greatly appreciated.

A: Partners can decide to split up at any time. Please realize that once a partner leaves, the license will be cancelled. The remaining partner can ask for a continuance to complete projects in progress; however, no NEW work should be started. A partnership license number cannot be transferred. I do not know what your partnership name style is so I cannot say if this same name can be used for a sole owner license.

The qualifying partner can apply for a new license by completing and filing an Application for Original Contractor’s License (7065 waiver). The other (general) partner will be required to sit for the law and trade exam and must file a regular Application for Original Contractor’s License. New bonding and fingerprinting will be required as will a certificate of Worker’s Comp if either of you have employees. The CSLB has not allowed exam waivers for partners since 2003.

Q: The folks at the North Coast Builders Exchange told me that you could answer my question. My company has been building new homes for several years; however, with the slow-down in the current housing market, we are considering home remodeling until the market for new homes improves. My question for you is: Does the CSLB have specific codes or requirements for home improvement contractors? It’s been several years since I have reviewed these. Any information you can send me would be greatly appreciated.

A: My compliments to NCBE and thank you for your email. The CSLB has a Contractor’s Guide to Home Improvement Contracts entitled “Contracting For Success”. I have several copies in my office and will mail you one today. The guide covers specific codes and requirements involving contracts, disclosure statements, etc. Readers can contact my office or the CSLB to secure a copy of this publication.

Q: Can a General building contractor take a public work sub-contract that only involves cabinetry?

A: Yes, B&P Section 7057 allows general builders to take prime or subcontracts that only involve rough or finish carpentry (i.e. framing cabinets, millwork).

Contractor’s NOTE: Effective January 1, 2009, the CSLB will only accept the current version of their applications (dated 05/08), including those for Original Contractors License, Additional Classification; Replacing the Qualifying Individual; Asbestos and Hazardous Certification and Home Improvement Salespersons.

Whereas in the past, the CSLB would give contractors a year or more leeway, this time they are taking a hard line. According to a recent press release, “all older versions of the above-listed applications that are submitted to the CSLB (after 1/1/09) will be refused or rejected prior to cashiering of any fees and returned to the applicant. The applicant will have to complete and submit a new application and fees”. As Yoda might say, “forewarned you be”.