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.