CSLB INdustry Expert Program, General Traffic Controls & RMO

Can a court decision on one license keep you from getting another? Can a prime contractor suffer from hiring an unlicensed contractor because they didn’t verify the sub? While some states have no contractor licensing California has one of the most complex in the nation. The work you bid may often require a specialty license class. Some jobs don’t. How do you know the difference? For these questions and others, you consult an expert…

Q: I am a licensed “A” Contractor and would be interested in doing traffic control for a utility. Do I need a separate contractor’s license to do that? If so what would be required?

A: The “C-31” (construction zone traffic control) classification would be required in most instances. The exception is if you are handling the entire General Engineering project such as building a road, resurfacing a bridge, etc. Then you have the option of using your own employees for this trade without the additional classification. Of course, you always have the option of hiring a licensed “C-31” subcontractor.

If you would like to apply for this (or any) classification, the CSLB will require that you have 4 years experience (within the past 10). You’ll need to show that you have directly handled or supervised at least some of this trade (i.e. preparing lane closures, flagging, installing portable devices such as cones, delineators, barricades, etc.).

Q: I’m an Officer on a corporate license. The CSLB said that there is an outstanding civil judgment. Can I get my own license even though I am an Officer on this license? How do I find out whom the judgment is with?

A: If you’re listed as an Officer of Record, the judgment will need to be resolved before the CSLB will allow you to obtain a Sole Owner license. I would suggest calling the CSLB and ask to speak with the Judgment Unit. They should be able to tell you who the judgment is with and how much it’s for. They will also be able to detail your options for clearing up this issue.

Q: I will be forming a corporation soon and plan on hiring a Responsible Managing Officer (RMO). I was told he is required to own 20% of the company. Is this true? Also, I know I need a contractor’s bond. Are there any other bonding requirements?

A: The Responsible Managing Officer can own any percentage of the company that you designate. There is no requirement that this be 20%. The 20% figure is bantered around the construction industry because this is the amount necessary for a RMO to own and still keep his or her present license active.

You’re correct, a $12,500 Contractors Board is required. The CSLB also requires a second $12,500 “Bond of Qualifying Individual” if the RMO owns less than 10 percent of the voting stock of the corporation.

Q: I have been the GC on a project and just found out one of the subs I hired is not licensed. He was immediately kicked off the job and replaced with a licensed contractor. Should I be worried that this could impact MY license?

A: B&P Code Section 7118 states, “Entering into a contract with a contractor while such contractor is not licensed…is a cause for disciplinary action”. Since this is one of the more severe license law violations, the CSLB could assess a civil penalty up to $15,000 as well as take administrative action seeking revocation of your license. It is unlikely this problem, should it even come to the attention of the CSLB, would ever get that far. However, just as the Board urges consumers to “Check-The-License-First” it’s extremely prudent for a General to thoroughly check out whom they are hiring as subcontractors.

CSLB Industry Expert, Painting & RMO Program

I always appreciate feedback from our ‘Q&A’ so we will share more ‘industry expert’ information for all the contractors who checked in. Another contractor discovers that painting a building won’t ‘insulate’ him from the need for another license class…

Q: In your most recent column, you responded to a question about the Contractor Board’s Industry Expert Program. Could you tell me more about this and would I be paid?

A: The Industry Expert (IE) Program was first initiated in 1985 after the CSLB had experienced a large complaint backlog. The backlog was in part related to a consumer’s inability to promptly secure the services of an expert witness (i.e. someone to render an opinion regarding the workmanship involved in a construction project).

According to the CSLB, the ‘Industry Expert’ provides: 1) an inspection and unbiased opinion on specific complaint items; 2) a detailed report that must be well written and includes job site photography and 3) testimony in a court of law if necessary.

I met with one of the CSLB staff in charge of this program and she said that Industry Experts are paid for their time and related expenses. How much is dependent on the type of case you are assigned. For instance, in arbitration cases, if called to testify, you’ll be paid a witness fee of $50.00 per hour (with a minimum payment of 4 hours). There is a handbook that goes over the expectations, guidelines and requirements of the IE Program. This should answer most basic questions a new ‘industry expert’ would have. This handbook is currently in the middle of being revised so some of the information and compensation may change in the near future.

Q: I intend on applying for a new corporate contractor’s license and hold the “C-33” (painting) trade. I called the CSLB to make sure my business name was acceptable and they said there should be “no problem”. When I spoke with your office this morning, your staff said there would likely be an issue using the word “insulation” in our business name. Could you give me your personal opinion in writing?

A: Since I was not part of the conversation you had with the CSLB, I cannot address why they told you this was “no problem”. You could apply using your corporate name, and hope whomever you spoke with is correct.

My personal opinion however, is that the Board will not allow this name since painting for licensing purposes is not an insulating medium. In other words, using the word “insulation” in most instances would require that you hold a “C-2” (Insulation and Acoustical) classification. If the Board does not accept your name as is, you have the option of amending it with the Secretary of State or adding a Fictitious Business Name (FBN) or DBA.

Q: I have a corporation and want to add a Responsible Managing Officer (RMO) contractor. What form do I need to file with the CSLB? Does he need to take a test?

A: If you’re interested in applying for a corporation license for the first time, use the Application for Original Contractor’s License. If you have an existing license and intend on adding a new trade, use the Application for Additional Classification. An exam may be required depending on whether this RMO is already qualified in the trade you want “to add”.

CSLB Industry Expert Program, New Board Members

While I am often described as an ‘expert on licensing’ did you know that licensed contractors could also be ‘Industry Experts’? Few people may realize that just as older pilots share their expertise with flight schools, a California contractor’s experience is of great value to the CSLB. We also share names and backgrounds to go with the new faces on the Contractors Board…

Q: Several years ago, I spoke with a CSLB inspector, who was impressed with my knowledge and expertise – particularly concrete and framing. He suggested that I apply to the CSLB for a position of Inspector. I completed an Application and sent it in but I don’t know what happened to it. I believe the employee was transferred from the Bay Area to Sacramento, but I do not recall his name.

I have gone onto the CSLB website but cannot locate an updated application. I phoned the 800#, more than once, went through a number of options but could not get a real person or information on an updated application.

Can you help me? I’m getting up in years and want to semi-retire and think this Inspector position would be great. Can you give me the how/who/where for this application?

A: Thank you for the email. As we discussed in some back and forth correspondence, the “Inspector” position you’re referring to appears to be the Board’s “Industry Expert Program”.

According to the CSLB, when investigating consumer complaints, the Board’s Enforcement division sometimes asks trained “Industry Experts” to inspect projects and render opinions on specific items related to complaints. These industry experts are either licensed or registered professionals such as contractors, engineers, architects, and geologists.

Members of the Industry Expert Program may elect to participate in a Complaint Investigation, Arbitration, On-Site Negotiation or feedback on CA license exam updates. Typical assignments involve inspecting and analyzing construction projects; providing expert opinion and testimony about specific complaint items and acceptable trade standards; or consulting on license exam development.

To be selected for the program, applicants must be: the Qualifying individual for at least 5 years on a current contractor license (which is free of unresolved licensing and enforcement actions); knowledgeable about currently accepted trade standards in their areas of expertise; plus be able to provide effective verbal communication, write an effective expert opinion, and testify at arbitration or disciplinary hearing as needed.

Recruitment for this program takes place periodically. If interested you can write to “Industry Expert Program, CSLB P.O. Box 26000 Sacramento, CA 95826, or call my office for more information.

Governor Jerry Brown recently announced the following appointments to the Contractors State License Board: Paul Schifino of Los Angeles, Mark Thurman, of Corona del Mar, and David Dias of Napa, Mr. Thurman has been President of ARB Structures since 2004 while Mr. Schifino has owned and served as President of Junior Steel Company since 2003 and Anvil Steel Corporation since 1996. Both have been on the Board since 2010. Mr. Dias who has been a business representative for Sheet Metal Workers’ Local Union No. 104 since 2005 reportedly will be attending his first Board meeting this month in Monterey.

HIC, Court Judgments & CA License Reciprocity

When was the last time you saw a government fee go down? If your desire is to obtain a contractor’s license or yours is up for renewal, act now or spend more. A corporate officer wants to ‘duck and cover’ in an effort to avoid his responsibility. A twist in contractor’s law illustrates how your inactive CA contractor’s license can be useful to work out of state…

Q. I read in your column that fees will be going up for various contractor license applications. When and by how much?

A: Effective July 1, 2011, all CSLB fees will increase anywhere from 20% to 50%. For instance, Applications for Replacing a RMO or RME or Adding a new Classification will increase from $50.00 to $75.00. Applying for a new license (exam or waiver) will now total $480.00 up from $400.00. Active renewals increase to $360. By way of comparison, Nevada charges $900.00 for a new license application and $250.00 for replacing the Qualifier, while Arizona’s fees can run as high as $1,550 for a dual residential/commercial general license.

Q: I’ve read about work that is incidental to my main contracting project. Can I use a licensed contractor to perform this type of work?

A: Yes, according to Board Rule 831, to accomplish work that may be outside your trade, a specialty contractor may use subcontractors to complete essential work that is “incidental and supplemental” to the main project.

Q: Who is required to register as a Home Improvement Salesperson? I’m a corporate officer but occasionally handle negotiations with the customer so does this law affect me?

A: A corporate Officer of record (i.e. one listed with the CSLB on the license) is not required to register as a Home Improvement Salesperson. According to B&P Code 7152, in addition to Officers: General Partners, the Qualifying individual and salespeople involved with negotiations initiated by the buyer, are not subject to this registration requirement.

Q: I’m an Officer on a contractor’s license. The company was recently hit with a judgment, which we cannot pay. We’re thinking of shutting down the corporation and starting a new company. Will this work or will the Contractors Board block our efforts?

A: The court says you are responsible, so seeking to avoid the results of your actions won’t provide any ‘cover’ for this ‘exposure’. A court judgment affects all personnel listed on the license. Your name and that of each Officer will be “Red Flagged” which means the new license application would be rejected by the CSLB. Options to “clear” your name are: pay the judgment; work out a payment plan acceptable to the judgment Creditor; convince a court to overrule or stay the judgment; or declare bankruptcy.

Q: My General license has been inactive for a few years. I have been looking at getting a license in either NV or AZ and understand they have a reciprocal agreement with CA. Can you tell me how this works? Will I need to sit for the test?

A: Arizona and Nevada have similar reciprocity agreements with California. One of the differences relates to how each State view an Inactive license. AZ isn’t concerned if a CA license is Inactive as long as you have been licensed for more than 5 years –ON ONE LICENSE. NV will typically accept one or a combination of licenses that add up to 5 years; however, they must have been Active.

The reciprocal agreement only relates to the Trade exam. Business/Law testing is still required. Each state requires completion of their license application; posting a Bond; verification of corporate registration (if applicable); and proof of Worker’s Compensation coverage. AZ also requires all contractors to secure a Transaction Privilege Tax number with the Department of Revenue. If applying for the trade waiver, you will need an official Verification of Licensure from the CSLB.