Landscaping & B License

You hire a licensed landscaper to create and maintain your property, but did you know he could also bid for the contract to build your swimming pool? One of the ways to obtain a low contractor’s license number in California is to buy one. Another contractor is having some sleepless nights worrying about losing his license because of an ‘arresting development’…

Q: My license was issued about three years ago. At that time I was fingerprinted and had no problems on my record. I was just arrested for a minor incident and am worried that this could cause a problem with my license. Do I need to tell the Board about this problem? Can the Contractors Board take my license away because of one incident?

A: I am just guessing but from your question it seems you were also convicted of this ‘minor’ crime. Since you were fingerprinted when you applied for this license three years ago, the Dept. of Justice (DOJ) should notify the CSLB that you’ve been arrested. If in fact this is a “minor incident”, it is very unlikely the Board will take any action against you. To be proactive, you may want to notify the CSLB regarding your arrest and provide them with any legal or court records.

The Contractors Board has the authority to suspend or even revoke a license if the crime is substantially related to your contracting business. This might include fraud, theft, or a crime involving deceit. Crimes or acts involving physical violence or a “substantial or repeated disregard for the health, safety or welfare of the public” could also lead to a license suspension or revocation. Licensees are allowed to appeal any administrative action taken by the Board.

Q: I am purchasing a company that holds a “B” license and have two questions: 1) Can I keep the license number? 2) What is the best way to put myself on the license as RMO?

A: As we discussed, since you’re purchasing 100% of the stock, you can keep the existing license number. In order for you to become the new Responsible Managing Officer (RMO) you must file an Application to Replace the Qualifying Individual. Since you already hold a “B” license, no testing will be required.

Another thing you will want to look at from a licensing standpoint is the listing of officers. Based on my experience, most sellers want off the license immediately and most buyers want to officially add their own officers as soon as possible. Soon after the purchase is finalized, I would recommend filing an amended Statement of Information with the Secretary of State and the form to report the current officers of the corporation with the CSLB.

Q: I will be applying for my “C-27” contractors license soon. There was some question at the company where I worked regarding whether a landscaper can build a swimming pool. Could you clarify this for me?

A: B&P Code 7027.5 specifies that a landscape contractor can “contract for the construction of a swimming pool, spa or hot tub provided that the improvements are included within the landscape project that the landscape contractor is supervising and the construction…is subcontracted to a single licensed contractor holding a “C-53” (swimming pool) classification”.

DAS & Hazardous Certification

Another important alert for corporate contractors comes with a lesson on ‘un-ringing the bell.’ We learn that once an application is made it’s a ‘done deal.’ First, two contractors are looking at ways to expand their opportunities in these leaner times. As with past downturns looking at new ways to work can lead to better profit in the future. Another contractor is considering a ‘risky’ business opportunity…

Q: I want to expand the type of projects my company can go after and want to apply for the Asbestos and Hazardous Certifications. I hold a “B” and “A” license. Will I have any problem? Do I need to pass any test? What qualification will I need to show the Contractors Board?

A: Only a select few classifications can apply for the Hazardous Certification. These are the “A”, “B”, “C-12” (Earthwork and Paving), “C-36” (plumbing), “C-57” (well drilling) and the “C-61”/”D-40” (Service Stations Equipment and Maintenance). There are no such class restrictions for the Asbestos (ASB); however, even after you qualify for the ASB, you must also register with the Division of Occupational Safety and Health (DOSH) to actually do the removal. Each Certification has an examination but there is no requirement that you document your experience qualifications.

Q: I’ve Googled my questions and consistently come up with your website. I’ve read countless of your Q&A and it seems like you really know what you’re talking about. Some of my questions were answered; however, here is one question I am unsure of:

I have a corporation, which has a dba. I want to start another company doing a little different type of work with my “B” license. Can I get a second dba under my corporation and use my current license number for both?

According to the person who answered the phone at the CSLB I have to start another corporation and transfer my license. But, I still need my license for my first dba. I’m very confused.

A: Thank you for the email. I am glad you were able to locate answers to some of your questions on my web site (www.cutredtape.com).

To advertise and contract under another business name (dba) you will need to apply for a second license. This new entity would be under the existing corporation; however, it will be assigned a different license number by the CSLB. Regulations do not allow you to use the same license number for more than one dba. In my opinion, there is no need to start a new corporation.

Q: Our application was just accepted by the State Contractors Board (it took us over two months). This is for a corporation and we listed our President, Secretary and Treasurer as required. One of the officers has decided he no longer wants to be involved and asked us to remove him from the application. The person we spoke with at the CSLB said this is going to be a problem. Can’t we just notify the Board and have his name removed?

A: Once an application is posted (accepted) by the CSLB, the personnel cannot be changed. If you drop this officer, the application will be voided and you’ll need to start all over again. If he reconsiders and agrees to stay on the application until the license number is issued, you could then remove him with no problems. When any change is made to your list of officers with the CSLB, also make sure to make the same changes to your Statement of Information with the Secretary of State. However, as I indicated in a prior column, there are some ‘scam’ companies sending bogus forms to CA corporations, which appear to be the official Statement of Information. Don’t be fooled. If you have any question abut the validity of the document you’ve received contact the Secretary of State, California Department of Justice or Capitol Services for assistance.

California Corporate Contractors License

We help corporate contractors, sole proprietors and anyone else who may have a question about some aspect of obtaining or using your State license. Small and disabled-veteran contractors are getting more support from the State of California. We give a contractor a ‘helping hand’ to keep the business in the family by reaching beyond his ‘grasp’…

Q: I currently own 100% of a corporation (commercial painting contractor). If I were to sell the entire company and start a new corporation, could I transfer my current license? Thank you in advance for you help.

A: Sorry, but you cannot transfer your existing corporate license number to the new company. The license number belongs to the entity not you as an individual.

Q: I heard that there have been some changes in the Disabled Veteran Business Enterprise program. I’m in the process of applying for this certification and my contractor’s license and was hoping you could fill me in?

A: The Department of Transportation (Caltrans) and Department of General Services (DGS) have taken steps to implement AB 21, which was signed by the Governor earlier this year.

The minimum DVBE participation goal (for most State contracts) is 3%. Previously contractors who could not meet this goal were required to at least demonstrate they had made “a good faith effort” to locate certified DVBE contractors or suppliers. Under this legislation, the program has been modified significantly. Bidders may no longer demonstrate compliance with a “good faith effort” and instead must meet the stated percentage goal. The latest addition to helping small and disabled veteran companies is AB 31, which was signed by the Governor. This requires prime contractors to verify and report actual participation in each bid to the awarding agency.

To obtain more information on the DVBE program or to locate a DVBE contractor or supplier, you can visit my web site (www.cutredtape.com http://www.cutredtape.com). Go to the “Resources” page and click on “DVBE Alliance”.

Q: My father has had a general contractor’s license for 40 years. He is retiring and wants me to take over the business. I have worked in the trades for about 10 years but this was for another company (not my fathers). I was told by the CSLB that I could not take over his license number but we do not want to lose it. Is there a way to get the license without testing? Any suggestions?

A: He could incorporate and transfer his sole owner license to the corporation assuming he owns 51% of the stock and is the Responsible Managing Officer. Once the company has been established, you could purchase the stock and replace him as the RMO. You should have no problem qualifying with your decade of experience but will need to pass the required law and trade exams.

While this may work for you from a licensing perspective, I would not do anything until you have discussed this with your lawyer or financial advisor. There could be some tax or legal considerations that may be applicable to your situation.

Nevada License Limits & California General License

A contracting business, like a marriage, often starts out well. Unfortunately, half of the marriages end in divorce. Who holds the ‘cards’ when the business deal is done? A lot could depend on how the ‘game’ is being played. Like a diploma, many contractors want to display their achievement when they get a license. Do you have too? Another contractor is ‘betting’ on work in Nevada if he can figure out what to ‘ante’ with his application…

Q: I’m a contractor in California. My wife and I created our company under both names; however she passed the license exam under her name. Now, we are separating and she wants out of the company.

I was the one working on-site and she was in charge of the administrative side. Now, she is threatening to take this license away which will leave me without work. What can I do? What will happen to the General Contractor license since it’s under her name?

A: If the license was issued to a corporation, it stays with the company. She can disassociate from the company and you, as the remaining officer, will have 90-days to replace her with a qualifying RMO or RME. During this time period, the license will remain in good standing. It may be an issue you want to bring up with your attorney, a mediator (if you’re using one) or the court.

If this is a licensed partnership and she leaves the license will be cancelled. If she holds a sole owner license, it belongs to her and according to CSLB you would not have any say over what she does. If you have the required 4 years experience (within the past 10 years), I would suggest signing up to take the license exam ASAP.

Q: We just received our contractor’s license in the mail. Are we required to post it somewhere visible to the public? Please let me know. Thank you.

A: According to B&P Section 7075, “the license shall be displayed in the licensee’s main office or chief place of business.” This being said, the law does not specify exactly where it must be displayed, although one could be assume this would be visible to the public.

Q: The Nevada Contractors License application is asking me to “State the monetary limit desired?” I want to make sure I have this correct. If I put $200,000 in this question, would this mean I could bid projects up to this dollar amount? Is this a cumulative total or per contract? Also, how does the NV Board figure out if I am eligible for this amount?

A: You’re referring to Section #8 (page 5 of 23) on the NV Contractor’s License Application. This amount is on a per project basis; meaning you can undertake one or more contracts up to this amount. You may not however, undertake a single project over this amount. For instance, using your example, you could be working on four $199,900 contracts (totaling nearly $800,000) but cannot properly bid on a contract in excess of $200,000 — the limit placed on the license by the Board’s determination. The Nevada Board wants to see your financial and bank information and utilizes formulas to determine the actual dollar amount.

General California License

People often seek a second opinion when they don’t like the answer they get. When it comes to applying the law to contractor’s licensing, the CSLB usually has the final say. However, it seems there is some ‘exception’ to the law. Another contractor learns too long ago is also too late when trying to ‘revive’ an expired license…

Q: Can a “B” Contractor serve as the prime contractor on a major construction project, i.e., dam modifications, bridge construction, major utility construction projects, etc. Or, is the intent that the “B” license be restricted to projects such as small buildings and residential properties?

A: While exceptions could exist, the types of projects you list (dams, bridges, etc.) are specifically included in the “A” (General Engineering) definition. “B” (General Building) contractors generally construct, remodel or renovate residential and commercial property – without any size restrictions.

Q: I have been trying to transfer my father’s expired General contracting license into my name. Last week I was contacted by the CSLB and was told that I was not eligible for this transfer because the expiration had been too long ago. Yet, I was assured by the CSLB multiple times over the phone that I would receive my father’s license number. Based on the information I provided you, what is your opinion? Do you think I can get his old license number?

A: Because the license expired nine years ago, the CSLB will only reissue this to the original owner (i.e. your father). I have never seen them reissue a license – to someone else — that had been expired this many years (even if you were told the contrary on the phone). While Section 7075.1 allows for re-issuance to a family member, this is for the purpose of “continuing a family contracting business”. It’s hard to argue there is a need to “continue” an existing business for a license that expired nearly a decade ago.

Q. I own a plumbing company and have taken and passed the exams; however, I had trouble proving my experience so I didn’t receive my license. I have a friend who holds a current California “C-36” (plumbing) contractor’s license. If I sign him onto my corporation how long before I qualify for my own “C-36” without him as a qualifier? Also, what responsibility does he bear if the corporation gets into trouble with the courts or a government agency?

A. Once your friend becomes the Responsible Managing Officer (RMO), it will take 4 years for you to qualify this license on your own. If you end up proving some of your past experience, this time period could be reduced. During the time your friend is the RMO, it is possible he could be held responsible for civil judgments and/or government debts owed by the corporation.

Based upon my experience, civil judgments are one of the biggest problems any officer faces from a licensing standpoint. For instance, if the company does not pay a judgment the qualifier and all other officers could ultimately be held responsible for this debt.

Q: The “C-10” license allows us to perform installations of Solar Photo Voltaic (PV) systems. We have noticed a requirement in several recent public bid solicitations for the bidder to have the “C-46” Solar Specialty License (which we do not yet have). This puts a local requirement in opposition to State Licensing regulations. Is this more stringent requirement enforceable?

A: The “C-10” can perform a solar project using photovoltaic cells. This being said local governments can in effect overrule the CSLB and require the “C-46”. As I have mentioned before in this column, public agencies have (within reason) the final authority to determine the “proper” classification for a given project within their jurisdiction. This is a major ‘legal’ exception to CSLB policy.