Losing a Qualifier, Breaking Concrete & Business Name Requirements

We begin with a ‘suspense’ story offered by a contractor who is becoming ‘unqualified’. You need a license to work, but can you participate in bids without one?  We ‘demolish’ a misconception for a contractor who learns that ‘breaking up’ is hard to do…

 Q: I’m an out-of-state contractor and we currently have a license in CA for our corporation but haven’t been getting much work lately.  Our qualifying individual has informed us that he is disassociating from the license and we have 90 days to replace him.  Can we just go without a Qualifier since we aren’t really using the license at the present time?

A:  You do in fact have 90 days to replace your Qualifier once he/she disassociates from your license.  After the 90 days your license will become suspended.  If you don’t intend on using the license, we recommend that instead of letting it go suspended, you file to inactivate it.  In this way you don’t need to have a qualifying individual, bond, or Worker’s Compensation insurance.

 

Q: I am hoping you may be able to provide some information in regard to one of our Builder’s Exchange members. Their contractor’s license is listed under one name (that is not incorporated) and they are conducting business under another name. Ultimately, they would like their membership to be reflected under this name, however, our policy is to list members by the name that appears on the CSLB records.  Do you have any recommendations on what they need to do with the License Board?  Any insight you can provide is greatly appreciated.

 

A: It appears this contractor is a Sole Proprietor.  My recommendation is to file an Application to Change Business Name with the CSLB.  This is a one-page form and the Board does not require any fee.  On the other hand, if he wants to continue operating under BOTH business names at the same time, he’ll need to apply for a second contractor’s license.  He should not conduct business under two different names using once license number.  Thanks for the question.

 

Q: For a public works project, does a sub-contractor need a license at the time of bid?  The paperwork states that a license is needed at the time the work is to be performed, but doesn’t specify whether you need a license to bid the project.

A:  I am assuming this subcontractor is bidding to a licensed general contractor? While local governments may have some latitude regarding when a license is required, for the most part, the general and all subs should be licensed at the time of bid.  There are several exceptions in Code Section 7028.15, plus if the project includes federal funds, a proper license would be required at the time the contract is awarded.  Our suggestion; get the license sooner, rather than later!

Q: I am currently at a project site and we’re having a sub-contractor (who does not have a contractor’s license) come out and crush some concrete.  Does he need a license to perform this work and place it in a pile?
A: I’m guessing this is not the answer you want to hear, but yes, a contractor’s license is required to break concrete.  The appropriate classification to perform this type of work would either be the “C-8” (concrete) or “C-61”/”D-06” Concrete Related Services.

Down Payment Limits, “C-16”, “C-34” & General Engineering “A”

When a contractor finds a situation that defies understanding, who are you going to call?  Over the years our readers have found answers here and learned plenty from the misfortune of others. We go in depth for our first contractor’s inquiry, and discover if your materials supplier can demand a large down payment?..

 

Q:  We are looking for help in clarifying the license requirements for the following: One of our customers is upgrading their existing underground fire lines within their property.  It is a large site with multiple buildings.  The new lines for this portion of work would tie into existing underground fire lines and run to either an exterior fire hydrant or exterior post indicator valve (PIV).  At no time would we be installing the line to the interior of the building or altering any of the existing interior fire or alarm systems. It is strictly underground water piping, valves, vaults, and fire hydrants.

 

In this case would a class “A” (General Engineering) license be sufficient for the work or would a “C-16” license be required? Our problem is that the City is telling us we must have the “C-16” class.   For your information, we also hold a “C-34” classification. Thank you for your time and efforts on behalf of contractors.

 

A: Nice speaking with you this afternoon.  In our opinion you can definably handle this type of work with an “A” or “C-34” classification.  While a local building department may have more stringent requirements than the Contractor’s Board, your company should be able to move forward on this project without the “C-16”.  Michael Brown, a former Board employee who worked for the CSLB for 25 years, backed up this opinion.   The current CSLB Classification Deputy also feels your current classifications are proper.  He stated, “if the scope of work is underground piping that supplies the fire suppression system, then the “A” or “C-34” may perform this scope of work”.

Q: I love to read your columns in our local builder’s exchange and thank you in advance for any insight you may be able to offer.

It is my understanding that as a supplier, (not an installer in any way, shape or form) we can collect deposits for material that must be special ordered.  Our problem is that sometimes the material can take 8 to 12 weeks to arrive and then may sit in our yard for weeks more before the Contractor is actually ready for it. Typically we require a 50% deposit to place the order, and when the material arrives in our yard, we invoice for the balance of the material.  Are we doing anything that could get us in hot water?  What is the appropriate B & P code that can be cited for this issue?   I realize the contractor has limitations (10% of total job?) that they may collect as a deposit.

A Thanks for your email. Your question is very timely in that the CSLB just issued a press release warning consumers “Not to pay more than 10% up front”. However, as a material supplier, we’re not aware of any restrictions regarding how much of a down payment you receive from a contractor or homeowner.  As referenced in one of our prior columns, B&P Code 7052, exempts suppliers from, what would otherwise be, a 10% deposit restriction.  We hope this information helps.

AZ, NV & CA Contractor Licensing, Business Names & Asbestos Requirement

When a client says they will ‘take our word for it’ there is no greater compliment. With more than 30 years assisting contractors at Capitol Services we know the greatest measure of success is satisfied customers. It’s just one of the reasons contractors often come back with another question knowing they will find an answer…

 

Q: I used to work for our local Builder’s Exchange and because of that, I know you’re the right person to address this question to: If a contractor is using their last name as their business name – “Smith Construction Company” owned by John Smith – is a fictitious business name statement required?

 

A: I looked up the individual you are referring to and he is licensed under the company name of “Smith Construction Co”. The CSLB does not require proof that he has a fictitious business name on file; however, we suggest that he file a dba with the city or county where he is doing business.

Q: You helped us get our license in CA, NV, and AZ and we’ve had an issue come up recently.  We have re-structured our corporation and ownership has shifted.  Are we required to inform the Contractors Board or file something with the Secretary of State’s offices to inform them of the change?

 

A: Nice to hear from you again.  You’re not required to inform the CSLB or the Secretary of State of your ownership changes. However, if officers have changed, then you should update both the Contractor’s Board and the Secretary of State in all three states. Please note that ownership changes may affect tax liability so we suggest also conferring with a tax specialist.

 

Q:  At a school in the State of Nevada, a 1 sq ft of possible ACM drywall/joint compound was removed without a contractor’s license for abatement; can they be cited for that?  Isn’t non-regulated asbestos less than 10 sq ft?

 

A:  The Nevada Statute that deals with your question states that if a licensed contractor who is engaging in activity for the abatement of asbestos has not obtained a contractor’s license, which is classified for the removal of asbestos (sub-classification A-23), the licensed contractor may not: “Remove more than 25 linear feet or 10 square feet of asbestos-containing material, as defined in 29 C.F.R. 1926.1101(b)”

Q:  I just purchased a company, which provides construction materials to contractors.  The company never had a contractor’s license and I was told they did not require one.  Now a contractor who wants to use our materials says he thinks I should be licensed and does not want to accept my bid unless I can prove whether a license is required.  He has read your column for years and said he’ll take you at your word to settle this issue.  Do I need a license?

 

A:  Based on our discussion, it does not appear your company is required to hold a contractors license since you’re only supplying these materials.  To cite ‘chapter and verse’ in the B&P Code, 7052 states a contractor’s license is not required for any person “who only furnishes materials or supplies without fabricating them into, or consuming them in the performance of the work of the contractor”

Second Qualifiers, Concrete Pumping & “A” Waivers

Like the timber wolf that has been in the news looking for new territory across the borders of Oregon and California, contractors across the west are also looking for opportunity in new places.  For contractors with longer reach, knowing the variations in license law can make the difference between success and failure. We share some of the problems and some of the ‘profit’ in working across state lines…

 

Q:  Capitol Services helped us years ago with obtaining our GC contractor’s license in Nevada and California and I have a question for you.  The Responsible Managing Officer (RMO) on the license (who also happens to be my Uncle) is planning to retire at some point in the near future and we were wondering if there is a way to add me as a second Qualifier on the licenses so it doesn’t lapse.  We were also thinking this would be beneficial in case anything unexpected were to happen to him.

 

A:  Thanks for thinking of us. Since California only allows one Qualifier per classification, you cannot both be Qualifiers on the CA license simultaneously.  You can either replace your Uncle on the license now as a pre-emptive step, or you could obtain your own Sole Owner license as a “back-up” so the process of replacing him will be easier down the road.  Keep in mind that even if you do nothing now, you will have 90 days to replace him if he were to retire or something unexpected occur.

With regards to Nevada, you certainly can be added to the license as a second Qualifier.  In fact, Nevada actually allows up to TEN qualifiers on each license!  Please contact us if you’d like assistance with this process.

 

Q:  My company has had a General Building (“B”) license since 1985.  In 2009 we obtained an “A” license by having one of our employees take the necessary exams.  He is now leaving the company and I was wondering if there is any way for me to qualify the “A” portion of our license without having to take the tests?  I am currently the RMO/President for the General Building license.  Our company has been doing “A” projects for over 12 years.

 

A:  Unfortunately, you will have to take the trade exam to replace your employee for the General Engineering or “A” classification.  The only way to qualify for a waiver is if your company had held that classification (and the license has been in good standing) for 5 of the prior 7 years. The “A” work you reference was actually done without the benefit of a license “in good standing” and therefore would not be considered satisfactory justicfication for a waiver.

Q:  I currently have a “C-61”/”D-06” (Concrete related services) license in CA.  My company does concrete pumping.  We have some potential work in Nevada and I have reviewed Nevada’s classification list and it doesn’t appear that they have anything that is equivalent.  Do I even need a license to perform this work in Nevada?

A:  Thank you for contacting us.  If all you are doing is delivering and pumping from the truck then no, a contractor’s license is not required in Nevada.  We hope this advice helps ‘pump’ up your profit line!