Installer’s Licensing, Corporate License Suspension & Court Judgments

Can a legal judgment ‘ricochet’ from its intended target? Our first contractor is hoping to get out of harm’s way before the legal battle is joined. We share the steps another contractor must ‘dance’ in a corporate shuffle.  We will help another questioner ‘plug in’ to the reason he may, or may not, need to file a CA contractor’s license application…

Q: Okay, say a contractor disassociates from a company while there is a lawsuit pending but before a judgment is obtained, and then associates with another company.  If a judgment is later obtained against the first company will it follow the license holder to the new company?

A: In my opinion, the judgment should not follow the contractor under your suggested scenario. However, he or she will likely be required to divulge a suit is pending when associating with the second company.  Generally, the Board’s policy is that judgments apply to personnel who are still listed on the license. Personnel who have previously disassociated should not be held responsible. The date of disassociation is critical and this is not a ‘get out of jail’ free card.

 

Q: Our Company recently converted from a “C” Corp to an “S” Corp. Ownership has remained the same.  Do we need to do anything with our License?  One of your recent Q&A articles in our local contractor’s builder exchange newsletter spoke about a Sole Owner who converted to an “S”, therefore needing a new license.  Are we in the same boat?

A:  When converting from a “C” corporation to an “S” corporation (or vice versa), you do not need to do anything with your license.  The CSLB is not concerned with what type of corporation you are.  If you kept the same corporate number (which according to our research looks to be the case) then a new license is not required.  A Sole Owner is an entirely different type of business entity than a corporation, hence the need for filing new license application.

 

Q: If my corporate license were to be suspended, would I be able to use my personal contractor’s license as a back up and continue to work?

A: First, it depends on why the license was ‘Suspended’ by the Board.  If the Board action is simply related to a Bond or Worker’s Compensation cancellation then that’s one thing.  If the Suspension is caused by a judgment or disciplinary action this is something totally different.  We’ll assume it’s the former reason.

You can use your personal license as long as it is current and Active.  You should consider transferring the contracts that are currently under your corporate license over to your personal license in order to continue work in progress, plus you would need to sign new contracts under your Sole Owner business name. You should not do business under your corporate license number and name while it is suspended.

 

Q:  We provide a patient safety monitoring system that utilizes the existing CATV coax system in hospitals and other medical facilities.  We place a Server at the CATV demarcation point in the hospital communication room; a Room Control unit (similar to a cable TV set top box) in each patient room; and a computer at each nurse station using the existing hospital computer network. All we do is install and plug in our equipment.   All new cable/coax installations are the responsibility of the facility using their in-house staff or contractors.  Are we required to apply/obtain a contractor’s license to install our own equipment?

A:  According to the CSLB, a license would not be required for this type of work. However, if the medical facility you’re doing the installations for requests that you have a contractor’s license, then a “C-7” (Low Voltage Communications) would be the proper classification to apply for.

AZ & NV Family Waivers, Worker’s Comp & CA License Expired

Does a “C-10” need Worker’s Comp if he hires a contract ‘installer’? CA offers a ‘family waiver’ but what about Arizona or Nevada?  John Lennon is credited with saying ‘life happens while you’re making plans’, and our first contractor is discovering that. The government bureaucracy isn’t required to keep your address up to date, you are. Failing to do so can have some serious consequences…


Q:  I noticed this morning that my license has expired. We have jobs going right now under contract with this license.  Since we did not receive this renewal in the mail, I asked our Responsible Managing Officer (RMO) to contact you so we could get a copy of the renewal application and hopefully get it posted before it expires.  He assured me he had a plan to overnight it to you and you would run it over to CSLB in time. Looks like it didn’t happen. Do I need to stop all work under contract until this gets fixed?

A:  We talked with the RMO regarding this issue; however, the renewal was not sent through our office.  We picked up a copy of the renewal application at the CSLB and emailed it to your Qualifier.  He called a few days ago to say that the renewal was inadvertently sent overnight directly to the CSLB (and he did not retain a copy).  Since, we did not have a chance to review the document before submission, I cannot say if all items were correct.  Unfortunately, since the license now shows “expired”, you technically should stop all work until the license is back in good standing.   Assuming there are no problems with the renewal (i.e. proper signatures/fees, corporate status), it should be processed soon.  If there is an issue, the CSLB will reject the application, send a letter detailing the problem, and require payment of a delinquent fee.

 

Q:  I was wondering if I could get an answer to a question about Worker’s Compensation. If a “C-10” license holder hires an installation company to come in and do a particular job, and that company does not have a license, is it the responsibility of the “C-10” license holder to provide Worker’s Compensation Insurance?  Or is it the responsibility of the unlicensed company to carry it? Thank you for your time. I look forward to hearing back from you.

A: Generally speaking, if you hire someone it’s ultimately your responsibility to make sure they’re covered by Worker’s Compensation.  If they are covered through another licensed contractor, this is fine.  However, since UNLICENSED “contractors’ rarely cover their employees, if someone gets hurt, they’re probably going to come after your insurance.

Q:  My father recently retired and I was able to replace him on our CA license with a waiver of the exams.  I have worked for the company for over 15 years.  We need to do this same process for our Nevada and Arizona licenses; can you help with that?

 

A:  We would be happy to help you with the application process in Nevada (NV) and Arizona (AZ); however, while CA allows individuals who are a close family member (son, daughter, spouse, etc.) to waive the exams, NV and AZ aren’t as generous with granting these waivers.  The only way either State will grant a waiver is if you’ve been listed as the Qualifier on a NV or AZ license within the last 5 years, or if you have been licensed for at least 5 years and have passed an equivalent exam in CA or UT.   In other words, these states do not have a “family waiver” option.

License Reciprocity, Arizona Qualifiers & Nevada Contractor Licensing

A contractor with a California license looking over the borderlines for business discovers things aren’t always as simple as rumored but having good tools makes the job easier. Another contractor walks a fine line to stay out of ‘hot water’ in Nevada, but we begin with a contractor who must make some ‘true’ or false choices…

Q:  I need your help with a Nevada License to install boilers.  I am currently a licensed HVAC (“C-20”) contractor in CA.  From doing a little research, I have found that the equivalent classification is a “C-21” in Nevada.  However, I’ve been speaking with an inspector in Nevada who tells me that I cannot install boilers with the “C-21” class and that I would need to also obtain a “C-1a” (Boilers) license.  Is that true?

 

A:  Thanks for your question.  If you’re installing boilers for the purpose of heating, or raising a room’s temperature, then the “C-21” will cover you.  The statute reads: “The installation, repair, service and maintenance of equipment, devices, machinery, units and related ductwork which use evaporation, refrigeration, boilers or combustion for the control of air temperatures in structures where people live, work or assemble….”

 

Q:  I work for a large company that has several sister companies.  I am currently the Qualifier on my company’s “B” (General Building) license in AZ.  My company has requested that I become the Qualifier on our sister company’s Arizona license which is a “C-30” (Finish carpentry).  Can I do that and if so, will I be able to waive the exam since I have a General Building license?

 

A:  First of all, Arizona will only allow you to be on more than one license at the same time if one of the following is true:  (a) You (the Qualifier) own at least 25% of each company that you are licensing, or (b) One licensee owns at least 25% of the other licensee.  The fact that the two companies have the same parent company is not enough to satisfy the requirement.  Secondly, you will be required to take the “C-30” exam, even though you currently hold a ‘B’ license.

 

Q:  I’m an electrical contractor and I have a license here in CA.  One of my customers has requested that I do some work for them in the Tahoe area.  My understanding is that there’s a reciprocal agreement between CA and NV that allows me to work in NV if I have a license in CA.  Is there anything else I need to do to start work, such as obtaining a business license?

 

A:  While many contractors believe that the reciprocal agreement between California, Nevada, Arizona, and Utah allows them to use one license in any of those four States, it isn’t quite that simple.  When doing work in another State, you’re required to obtain a license specific to that State.  The agreement generally allows you to qualify for a trade waiver, if you have been licensed for 5 out of the last 7 years in one of these reciprocal States.  You’re still required to take and pass the Management exam and go through their application process.  Unfortunately not all classifications are reciprocal.  For instance, Nevada and California do not reciprocate for Electrical, Plumbing, or Fire Protection.  So as an Electrical contractor you would be required to take the trade exams and show the necessary experience qualification. Reciprocity is a great opportunity for contractors but like all ‘tools’ does require some effort to make it work.

 

Because all four referenced States have different requirements, please contact each state directly or contact Capitol Services for an assessment of your specific contractor’s licensing situation.

Joint Venture Licensing, General Scope of Work & Installer’s Licensing

Two licensed contractors are putting their heads together but can’t decide whose license will work for their anticipated joint venture. A general engineering contractor discovers if- and where- they can ‘park’. A follow up question on whether a license is required to install a product helps contractors learn it’s not the size of the ‘fixture’ that makes the difference…

Q: As always, I enjoy reading your column.  A question regarding the Q&A from a few weeks ago:  A license isn’t needed for installing some products, right?  For instance, a supplier of blinds who also installs them does not need a license, right?  As I recall, it turns on whether the item installed becomes a “fixture,” which is a legal concept equating to whether the product is large, heavy and integrated into the building to such an extent that it becomes “part of the building.”  Do I have this right?

 

A:  No, not quite right but that’s why we’re here! Glad you enjoy the column.  You’re referring to our prior question regarding the foreign manufacturer who wanted to install their product as part of a Southern CA building project.

While the example given was a very large structure, it is actually not the size of the “fixture”; rather it is the amount of the project that determines whether a license is necessary.  Using blinds as an example, a license WOULD be required if the supplier also installs this product and the job is $500.00 or more. The key is the dollar amount.  Blinds, which may be considered “temporary”, are covered by the “C-61/D-52” (Window Coverings) classification.  Other examples might include store fixtures covered by the “D-34” (prefabricated equipment); metal cable racks included in the “D-24” (metal products); and vinyl or canvas awnings covered by the “D-03” (awnings).

 

Q:  I need to change my license from a Sole to a ‘S’ corp.  Myself and another contractor are going to do a Joint Venture (JV) and need to apply for the JV license. How does that typically work?  Should we each open another S Corporation and put our licenses together?  I have yet to talk with my accountant.

 

A:  You’ll need to first secure a new license for the ‘S’ corporation.  If you wish, the Sole Owner license number can be transferred to this entity if you own at least 51% of the company.  Once this license is issued (or reassigned), you can then apply for the JV license.  By definition, a Joint Venture License consists of two or more licensed entities each of which is active and in good standing with the CSLB. It is up to the joint venture “partners” as to which entities they want as part of this license.  I would suggest talking with your accountant first; then call us with any further questions or if you would like any help with the application process.

Q: We’re an “A” contractor and have an opportunity to construct a new park.  The project is mostly paving, grading, parking lots, etc.; however, there are a few small structures, such as the bathrooms.  Are we permitted to build those structures as part of the overall project with our “A” license or does this need to be subcontracted?

A: A park is expressly listed in 7056 as one of the projects that fall under the General Engineering (“A”) classification.  Consequently, a contractor holding the “A” license class can do ALL of the work that is part of the park project, OR ANY PORTION thereof.  In short you can build these structures with your “A” license or subcontract the work if you wish.