Sharing a Contractor License, Corporate Licenses, Electrical DAS & Raising Bid Limits in NV

We help a contractor raise the ‘ante’ in Nevada bids. California contractors reading this will discover a quirk in licensing law they might benefit from learning, unless they are ‘shocked’ we would reveal it. While you can transfer a sole owner license to a corporation, you can’t share a contractor’s license because you are ‘related’…

 

Q:  I have a bid limit in Nevada of $250,000.  I have a customer who wants me to do a project for them that will be well above $500,000.  Is there any way to increase my bid limit?  How quickly can this be done?

 

A:  There are two ways to raise your bid limit in Nevada.  You can complete a One Time Raise in Limit application, or you can submit a Permanent Raise in Limit application.  For a single project such as you are describing, you can submit the application for a single project limit increase at least five working days prior to the bid date.  If submitted in that time frame, the application will be approved prior to bidding the project (assuming you meet the financial requirements of course).

 

Q:  You helped my company get a CA license 18 years ago and I have another question for you.  I am an “A” Contractor (General Enginering) and I heard recently that I could have an electrician on payroll that is not certified by the Division of Apprenticeship Standards.  Is that correct?

 

A:  That is indeed correct, only a “C-10” (Electrical) contractor is required to have their electrical employees certified by the Division of Apprenticeship Standards (DAS).  An “A” is not required to have their employees certified through DAS even if performing the same type of electrical work.

 

Q:  I currently have a Sole Proprietorship contractor’s license and I am in the process of incorporating.  Since I will be the only shareholder, will the corporation be assigned my existing license number?

 

A:  That’s your choice to make.  When you submit the license application for the corporation, you are required to also submit a “Licensed Sole Owner Applying for Corporate License” form (available on the CSLB’s website or by calling Capitol Services).  The CSLB allows a Sole Ownership license number to be reissued to a corporation if: 1) The Sole Ownership license is in good standing, 2) The corporation was formed by the individual licensee, and 3) The Sole Owner licensee has at least 51% ownership of the new corporation.  You should be aware that once the number is transferred, it belongs to the corporation and cannot be reissued to an individual at a later date.

 

Q:  Can you confirm that we can use the license owned by our Parent company or a company of our same Group, such as a sister company?

 

A:  No, you cannot use a license that doesn’t belong to your company, even if the company is “related”.  Each entity performing contracting work is required to have it’s own contractors license.  As a subsidiary of the Parent company, you may be able to use the same Responsible Managing Employee (RME)/Responsible Managing Officer (RMO) that is currently qualified for your Parent, however you will be issued a separate license number.

 

NV Licensing, Work & Owner/Builder Experience Credits & Qualifiers

We often hear from people looking for a ‘short cut’ in obtaining a contractor’s license. Sometimes our expertise finds a quicker route, but often just doing the right thing is the contractor’s best choice. In the current economy people are looking for alternatives to get back to work and contracting is sometimes a choice for that new vocation…

Q: We’re an out-of-state full service contractor. One of our clients has asked us to handle construction management for the site prep on a new project in Nevada. We will subcontract all work to local contractors who of course will be properly licensed in the area of the project. What licensing will the state require of us?

A:  Even as a Construction Manager sub-contracting all the work to licensed contractors, you will be required to have a Contractor’s License in Nevada.  Bidding on work and signing contracts for construction work requires a license.  It sounds as if the A-7 (Excavating and Grading) classification is what you will need if you’re doing site work.  There is no trade test for the “A-7” in Nevada, so only the Business/Management exam will be necessary.

 

Q: I hope you can help me. I was laid off from a telephone company last year and want to restart my cabinet shop. Prior to working for the phone company I spent approx. 10 years in construction as a finish carpenter handling residential and commercial cabinetry. Basically I have a ton of experience, but my verifiable experience is more than a decade old.  Will that qualify me for a “C-6” license?

 

A:  The CSLB will only consider work experience that occurred within the last ten years, so unfortunately it doesn’t appear that you will qualify at this time.  Note if you have a 4-year college degree, the State may credit you 2 years in lieu of experience depending on your field of study.

Q:  I’ve seen on the CSLB website where a homeowner can qualify for a Contractor’s License, but I’m not sure how that process works (the site is a bit confusing). Any words of wisdom will be truly appreciated.

A:  The CSLB will give partial work experience credit to individuals who have done work on their own property as owner/builder.  However, it is difficult to qualify for a Contractor’s License solely based on this basis.  For example, it may have taken you a year and a half to build your home, but the CSLB may only grant you 6 months for that work.  Even if you have worked on or built several properties, the Board is very tough in granting this type of experience credit.   You’ll likely need to show other work or educational background.

 

Q: Q: We are going to need to replace the Responsible Managing Employee (RME) on our license once again. You helped us with the application process originally, but this will be our third time in the last year. Is the Contractors Board going to hold this against us?

A: This is not an issue. The Board will not hold it against a company if they replace their Qualifier several times in a year.  There is however, a “rule of three” for individual Qualifiers. You can only personally qualify up to three licenses in any one year.

General Licenses, Solar Installation, Business Names and RME/RMO

Better to ‘light a candle than curse the darkness comes to mind’ as we spotlight a couple of ‘general’ questions on solar system contracting.  Another contractor helps remind us of the rules in California for Responsible Managing Employees (or RME’s)…

Q:  We’re a class “A” contractor, and have some interest in expanding into the solar energy installation business.  Does my “A” license cover this?  Would I need to get a “C-46”(Solar) specialty license?  If a “C-46” is required, does having an “A” license make me eligible to add this classification?  Thank you for offering your services, it is very helpful!

 

A:  Section 7056 of the B&P Code (the definition of an “A” contractor) includes the words,  “in connection with fixed works requiring specialized engineering knowledge and skill”. According to Board rule 832.62, this phrase includes an “active solar energy system”.  Therefore with an “A”, you can do this work without needing to apply for the “C-46” (Solar) classification.

 

If you decide to apply for the “C-46”, you’ll need to show at least 4 years experience handling, supervising or managing solar projects to qualify. Simply having an “A” does not, in and of itself, make you eligible to sit for this exam.  Thank you for the question.  I hope our response is helpful.

 

Q:  I’m having a problem with our business name.  We applied for a license under our corporate name, “XYZ Solar Company”.  However, the Contractors Board rejected the application telling us the name was not compatible with the license class (General building) held by our Responsible Managing Officer (RMO).  I read in one of your recent columns that a “B” could perform solar work so why can’t we use the “Solar” name in our business?

 

A:  The Board’s policy (as detailed in Code section 7059.1) is to disallow any business name that they determine to be misleading.  It is subjective, but generally, requests to use a word like “solar” where the applicant does not hold the specific classification code (i.e. the “C-46”) are not approved.  I say subjective because a random search of business names has turned up use of the word “solar” being allowed with a “C-10”(Electrical).  You may want to send a letter appealing the Board’s “decision” or amend the name to include a modifier like XYZ “General” Solar Company.

 

Q:  I was just finishing your book (“What Every Contractor Should Know” David Kalb, author), and I couldn’t find all the answers I needed. Currently I am the Operations manager but I have been asked to become the RME for my employer.  I have successfully taken the law and two trade tests and the former RMO/RME was just disassociated, but I am still concerned in regards to the RME position.  Any ideas or comments on the following: 1) What kind of control do I need to have?  2) Should I look for additional compensation?  3) Do I need to consult an attorney regarding a contract?

 

A: Board Rule 823, primarily answers your question regarding “what kind of control” you need.  For one, you must be a “bona fide employee” actively engaged in your employer’s business “for at least 32 hours or 80% of the total hours per week the business is in operation, whichever is less”. For a more complete response, check out page 76 of my book, or contact Capitol Services.

 

I cannot address your second question regarding compensation; this is up to you and your employer.   It you plan on having an employment agreement and/or contract questions consulting an attorney is likely a good idea.

 

Offshore Contractor Licensing, Qualifiers & Waivers

We ‘whet’ your appetite for answers with an unusual inquiry that starts with a cruise up the California coast. We turn a contractor 180-degrees after getting some bad direction but our final contractor’s problem won’t be solved despite a positive answer…

 

Q:  We’re an out-of-state corporation that will be doing contracting work on a cruise ship.  The ship is due to dock in San Diego, where our employees will get on.  From there the ship will head out to Seattle and our crews “in tow”.  Do we need a CA license to do the work since it will be docking in San Diego?
A: Interesting question!  Our research indicates that you do not require a CA contractor’s license to work on this vessel. Bon Voyage!

Q:  I have a Sole Owner General building contractor’s license.  My buddy who is licensed in Oregon does plumbing work.  Can I add him to my license with the plumbing classification so that we can start doing plumbing and building projects?  When I contacted the Contractors Board, the guy I spoke with said I would need to form a corporation or partnership.  Is this right?

A:  The CSLB staff member was incorrect when he told you an individual could NOT add anyone to a Sole Owner license.   Giving him the benefit of the doubt, we believe he may have misunderstood your question.  Regardless, while you certainly have the option of forming a partnership or corporation to conduct business, you just as certainly can hire a Responsible Managing Employee (RME) — as long as it’s for a different classification than you hold.  Your friend will be required to show four years of plumbing experience and pass the law and trade exams.  He will also need to post a $12,500 Bond of Qualifying Individual and go through the Board’s fingerprinting process.

 

 

Q:  We’ve had a “C-39” (Roofing) license since 2007 with my son as the Qualifier.   He does not have the best credit so I would like to replace him.  His bad credit is preventing our partnership from getting bonding anymore.  Since we’ve had a license for 5 years I thought I could do this without taking the exam but the CSLB told me NO because we had to get a new license in 2009 when we added another partner.  They said since we got a new license and number they start the 5 years over again.  Are they correct even though we have been in business for 5 years under the same name and he and I are still partners?

 

A: Yes, the CSLB was correct. To be eligible for a waiver under Code Section 7065.1, you must have been on ONE license for 5 of the prior 7 years.  In other words, your time did start over again when you applied for the new Partnership license in 2009 (you were required to do so since any change in General Partners results in a license being cancelled).

 

While not part of your question, in researching your license status, we noticed that your license is suspended due to a Worker’s Compensation issue.  Aside from needing to contact your insurance company, it is important to note that to be eligible for a waiver the license must have been active and in good standing for the entire 5 year period.

General CA License, Bankruptcy & Disassociation

Doing something is different than watching it being done. This is especially true for contractors hoping to use ‘experience’ in obtaining or upgrading a license. We go for ‘broke’ in helping answer another contractor, before ‘signing’ off our last inquiry in this Capitol Connection…

 

Q:  I currently have a sole owner “B” license that’s been Inactive for years.  The company that I work for holds the “C-21” (Demolition) and “A” (General Engineering) classifications.  The current Qualifier is retiring and I’m in the process of purchasing the business from him.  I applied to replace him as the Qualifier and the CSLB approved me to sit for the “C-21” exam, but determined that I’m not qualified for the General Engineering classification even though I’ve worked for the company for over 5 years.  Isn’t overseeing “A” projects for over 5 years enough to qualify to sit for the trade test?

 

A:  When it comes to experience, the CSLB will want to see some hands-on Journeyman or Supervisory experience in your work history.  We suggest that you either reword your Experience Record form to better reflect your oversight of paid projects or try and work out an agreement whereby the seller remains on the license so you don’t lose the “A” classification.  If the Board will still not accept your revised Experience Certification, we suggest working to gain that additional experience so you can re-apply at a later date.  Also, in the meantime you can add your “B” classification onto the license with no testing required!

 

Q: I would like to obtain my Contractor’s License in CA and NV, but I recently filed a personal bankruptcy.  Will this prevent me from getting a license in those States?

A:  According to Shauna a personal bankruptcy alone should not prevent you from getting a Contractor’s License in California or Nevada.  There is a question on the NV application about whether you’ve filed bankruptcy. The Nevada Board will require that you submit your bankruptcy documents with your application but it’s not often a cause for denial.

The California license application addresses bankruptcies if you check “Yes” to question #10.  You’re required to attach a statement identifying all judgments (pending or on record), liens, past due unpaid bills, claims, or suits and a detailed explanation of the situation, including the names and addresses of the parties involved.  If the obligation was or is being discharged in bankruptcy, a copy of the filing and a copy of the creditors list are required.

While ultimately you should be able to get a license, the bankruptcy will adversely impact the amount you’ll have to pay for a license bond in each state (i.e. because most bonding is based on your credit score).

 

Q:  Our Company is hiring a new Qualifying individual.  He works for another company but will be leaving in order to become our Responsible Managing Employee (RME).  My question:  At what point must he leave the current license in order to become the Qualifier on our license?  Also what happens to this present employer’s license after he leaves?

A:  Your new RME should rightly Disassociate from his current employer’s license effective the last day of employment.  He will not be able to officially become your Qualifier until he has been removed from his present license. His  employer will then have 90-days from the date of Disassociation to qualify someone new.

Q:  Our Corporation has a CA contractor’s license with a fictitious business name.  When advertising or signing contracts do we need to use the full corporate name and dba name?

A:  You can use the FULL name (corporate and dba) or just the fictitious business name (dba) alone for advertising and contract purposes. In addition, you should always display the license number in advertising or signage.