A & B Waiver, RMO/RME

In writing this column, reader feedback is one of the best ‘gifts’ I receive from contractors’. It signals validation of the value readers receive in taking time to educate themselves beyond the basics. Our first contractor has come back to the well for a double-dip of license advice. Another contractor wants to know if he can ‘take over’ his father’s license…

Q: In February, I sent you an e-mail regarding the possibility of using my “A” or “B” license to legally bid a job that primarily involved welding. You answered my question pretty much in your column, which appears in my builders exchange paper. I can totally understand the reason to be separately licensed as a “C-60” because the job was primarily welding with no other trades involved.

I’m now considering obtaining the “C-60” license. If at all possible, I would like to get a waiver of examination because of my experience in this trade. I can easily provide references to fill out the Certification of Work Experience form.

After downloading the Application for Additional Classification I found there were no forms to fill out regarding a waiver. I did some more cruising on the CSLB site and found that on September 1, 2003 the licensing board suspended the Waiver of Examination as per 7065.1(a). This was a little disturbing to me so I spoke to someone in the CSLB who told me that I probably would not have a problem obtaining the additional classification because of my experience.

My question is how to proceed with obtaining this new classification? I cannot find a form entitled “Waiver of Examination”, other than the Application for Original Contractor’s License-7065 Examination of Waiver.

A: You are correct, the CSLB did make 7065.1(a) “inoperative” in 2003; however, the waiver you’re looking at is allowed within Code section 7065.3. The Application for Additional Classification is correct; however, in addition to the certification of work experience you must provide a very detailed project list and a letter requesting the waiver. In addition to the normal evaluation by an application technician, a licensing deputy typically reviews 7065.3 requests.

Q: For the past 15 years, I have been an officer of a construction company under the following license classes: “B”, “C-7”, and “C-10”. My father has an inactive personal contractor license with a “C-7” classification, and I would like to assume that license with his permission of course. My question is, can his license be transferred to me without taking the license exam? Is it true that once a person has served as an officer of a licensed company for a period of years, that person can acquire Responsible Managing Officer (RMO) status without additional testing? What procedures do I need to follow?

A: Thank you for the email. My assumption is that you are not the qualifier on your employer’s company license. I do not see how you can currently assume this license since you have been employed elsewhere and have not been working full time directly for your father during the past 5 years.

If you start a corporation with your father as the Responsible Managing Employee (RME) or RMO and keep it active and in good standing until 2014, you could then likely qualify for a “C-7” (low voltage) license with no exams. Call my office and we can go through the paperwork required by the Secretary of State and CSLB to apply for a license today and potentially secure a waiver (5 years from now). The applicable code section, 7065.1(c), is still operative.

Business Scams & SWIFT Enforcement

Have you ever played “Whack A Mole”? If so, you can understand some contractor’s frustration with people trying to scam them. As soon as one scam is exposed another pops up to take its place and waste more of your valuable time. With every recession, these types of con games seem to multiply like moles. A contractor’s only protection, or ‘mole hammer,’ is awareness of these frauds which is why my readers are now forewarned…

Q: I received a mailing from a company that looks to be from the Contractors Board. Can you tell me if this is legitimate? I’m concerned because it looks like someone got access to my license application that I sent to the Board two weeks ago.

A: A few weeks back I warned my readers about an OFFICIAL CONSUMER ALERT from the Secretary of State entitled: MISLEADING BUSINESS SOLICITATIONS. The newest ‘con’ is from a company that is soliciting applicants applying for a contractor’s license. The mailing looks to be from the CSLB (IT’S NOT) and only asks for the applicant’s phone number. It appears they had access to your confidential application but I have been assured they didn’t.

Until a few years ago, the CSLB would list an applicant’s phone number as part of the public record on its website. They received complaints about deceptive solicitations, so they ceased publishing the number online, which resulted in a substantial decrease in unsolicited calls. Now you can see why some companies want your phone number even if it means misleading you into giving it to them.

Q: Can I perform the related electrical work on a conveyor system with my “C-61”/”D-21” classification?

A: “Related” is the key word. As long as the electrical is part of the conveyor project then the answer is YES. This would fall under the incidental and supplemental provision of B&P Code Section 7059(a).

I would like to publicly thank the Santa Barbara Contractors Association (SBCA) for the opportunity to speak at their monthly breakfast on September 10th. It was a pleasure interacting with the 60-70 members in attendance. Among the topics discussed were: unwritten CSLB polices; Home Improvement contracts; B&P Code 7031; advertising guidelines for contractors; Limited Liability Companies (LLC); additional classifications with an exam waiver; and what the CSLB is doing to combat unlicensed activities.

As it relates to that final topic, a bill recently passed by the State Legislature would give the Board another weapon in its ongoing battle to curb unlicensed activities. AB 370 (Eng) is on its way to the Governor’s desk and, if signed, would increase penalties for repeat offenders. Existing law makes it a misdemeanor for a person to act in the capacity of a contractor without having a license. A 3rd or subsequent conviction is punishable by a fine or by imprisonment in the county jail or both. This bill would REQUIRE that a 3rd or subsequent conviction be punishable by BOTH a fine and imprisonment in a county jail.

Further, at a recent CSLB meeting in Sacramento, the Enforcement Unit reported on a number of successful sting and sweep highlights conducted by The Statewide Investigation Fraud Team (SWIFT). On one occasion, a SWIFT Enforcement officer was interviewing a contractor in a residential area when he noticed some suspicious activity at a nearby residence. The “landscapers” were carrying a hammer and pry bar rather than the more traditional shovel and wrench, so they were questioned. These would-be robbers were scared off after being asked to produce a contractor’s license number. A description of the two men and photo of the truck were provided to the local police by SWIFT investigators.

License Transfer After Death

‘Time is money’ is an old cliché. However, waiting too long or missing a deadline can cost you plenty. While one contractor learns he can’t afford to wait ‘one day’ to renew an expired license, another will likely be given ‘one year’ to wrap up issues with their license change…

Q: I was the Responsible Managing Officer (RMO) on a contractor’s license (“B”) but then let it expire in 2008. The Contractor’s License Board told me that I could be issued a new personal license with the same Class “B” without any tests as long as it was within 5 years. Is this true and if so could you direct me to the specific Law or Regulation? Also is it possible this could change if I wait?

A: You were given the correct information by the CSLB. They were referring to B&P Code 7141 which states in part, “…a license that has expired may be renewed at any time within five years after its expiration date by filing an application for renewal…” I do not believe this law will be changed; however, if you wait beyond the five years — even by one day — you will be required to file a new application for original license and retake the applicable state exams.

Q: My husband passed away a few weeks ago. He was a contractor for over 35 years. I know he used to read your column so I am writing to see if you can give me some advice. We want to finish all the jobs in progress and will then wrap up the business. What is required and how long will it take? Thank you.

A: I am sorry for your loss. As we discussed, since your husband was a sole proprietor, you, as an immediate family member, “can request a continuance of the license to complete projects in progress and undertake new work for a reasonable amount of time” (Code Section 7076). The request must be made in writing to the CSLB within 90 days of his death and will likely result in the CSLB granting you a one-year continuance. The Board will require a change in the contractors bond, plus if any of the projects last for more than a year, you or another family member would be required to obtain your own license to continue contracting.

Q: I have been told by a General Contractor that he will not hire my company unless all my plumbers are certified. I asked him what he was referring to and he told me it was a new state law. I’ve never heard anything about this and was wondering if you can tell me what he is talking about?

A: There is an apprenticeship program for electricians, which is administered by the Division of Apprenticeship Standards (DAS); however, I have not heard about any State law that requires plumbers to be certified in a similar manner. The DAS program requires electricians working for a “C-10” contractor to show a specific number of hours working in the field and to pass a DAS administered exam.

It’s possible this GC was referring to pending legislation (AB 660) by Assembly-member Torrico. This bill – if passed and signed by the Governor — would prohibit a person from performing work on any fire suppression system, unless he or she possesses a valid sprinkler-fitter certificate issued by the State Fire Marshal.

Since this GC will not hire your company as a sub, I would call him back and ask for the code section he is referring to and where he heard about this “new state law”. Please let me know what he says.

Joint Venture License & Contractor Scam Alert

Even in the best of times some people will try to ‘fool’ you out of your hard earned dollars. In today’s economy the idea of ‘buyer beware’ is always a good caution before writing the check, especially when fear is used to motivate your spending that buck…

Q: I received a mailing from the CA Secretary of State (I think). It says I have a deadline to complete this form or my corporation could be suspended. I was about to send off the form but decided to call you first as our registered agent. Could you tell me if this is real, and what should be done? Thank you.

A: I have been receiving daily calls from clients and others regarding this same issue. The form you’re referring to is NOT from the Secretary of State and is in fact subject to an OFFICIAL CONSUMER ALERT by the Secretary of State entitled: MISLEADING BUSINESS SOLICITATIONS.

Businesses throughout the State are being warned that the companies behind these mailings have no affiliation with the California Secretary of State’s office or any other government agency. If you have received a solicitation letter and believe it is misleading or confusing, it is recommend that you write the California Department of Justice, Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244-2550 or contact their office by phone (toll free in California) at 800-952-5225

According to the Consumer Alert, the solicitation requests that a fee and a completed form be submitted in order for the business to comply with applicable California laws. As we discussed, this official-looking solicitation is not from the SOS but is similar to the real Statement of Information form and includes a ‘misleading’ official-looking seal. The Secretary of State urges those receiving these forms to look out for one or more of the following misleading characteristics: 1) The form quotes a specific statute or other law inapplicable to the type of entity being solicited; 2) Implies that failing to return the form and pay the requested fee may place your company in legal jeopardy or might cause the entity’s filings with the California Secretary of State to be in default; 3) It contains a reference to a “file number,” “Corporation Number,” or “Control Number” that does not match the number assigned to the entity by the Secretary of State; and/or 4) The solicitation references an “annual fee” or “annual payment” that is nearly 10X greater than the $25.00 filing fee for a legitimate Statement of Information.

To view the full text of this Consumer Alert, visit www.sos.ca.gov/business/be/alert-misleading-solicitations.htm

Q: I have always appreciated your column in our local Builder’s newsletter and now have a few questions. I hold a contractor’s license and have been in business for 35 years. I’m considering a design/build venture with an architect who does mostly “green” projects but does not hold a license. We are looking at several options: 1) form a new LLC; 2) Start a Joint venture; or 3) Keep everything under my existing license.

Can my existing license be used to qualify the LLC? Do the joint venture partners both need to be licensed contractors?

A: As I have noted often in this column, the CSLB will not license a LLC. While there is a bill pending in the State Legislature to change this law, there is no telling if it will be passed or even signed by the Governor. Regarding your second option, all partners in a Joint Venture (JV) must be licensed and in good standing. Probably best to go with the third option and keep everything under your existing license.