License SCAM Alert, Canceling Bonds and Joint Venture Licensing in CA

It’s ‘Bond,’ contractor’s Bond that, like fictional super-spy 007, becomes the target for our first ‘shot’ in answering questions this edition.  Another contractor ‘assumes’ responsibility for his answer and we alert all contractors to a phone scam to beware of right now…


Q: The assets of our company were sold and your firm assisted us with obtaining new licenses in CA, NV, and AZ.  Can we cancel the bonds that we have on file for the old company, or are we required to keep them active for a period of time?


A:  Once the licenses are cancelled, you should contact your insurance company and request that the Bonds be cancelled as well.  We’re not aware of any requirement for them to remain on file.  This being said, in CA for instance, consumers can make a claim against the Bond for up to two years after cancellation.


Q: My insurance company did not renew my Contractor’s Bond and now my license is suspended.  I contacted them and they are going to write a new Bond.  This means my license will show a suspension for these past weeks and this makes me nervous.  Do you know if they can backdate the Bond so there is no break?


A:  I can tell you that the CSLB will accept a “backdated” Bond if it is received within 90 days of the expiration date.  They will retroactively lift the suspension, which means it will not show on your record.  Whether your bonding company will backdate the Bond is up to them.


Q:  We currently have a Joint Venture (JV) license made up of three entities and we would like to remove one.  I assume that when we remove that entity we will also need to amend the name of the JV to remove that company’s business name.  Is this possible and how is it done?

A:  Joint Ventures are treated the same as Partnerships, which means when you remove an entity (partner) from the license the license is cancelled.  So, in order to do business as the Joint Venture with just the two remaining entities, you would need to apply for a new license.

Also, you are correct that when you apply for the new license you will need to amend the business name.  As you may already know, an acceptable Joint Venture business name must include the full business name of each entity listed, part of each entity’s business name, or a completely fictitious name.


Both California and Nevada Issue an “Industry Alert”

Nevada and California want to give contractors a heads-up on a situation they’re dealing with in both States. This Industry Alert warns of a scam targeting existing licensees as well as new license applicants.

According to CSLB Registrar Steve Sands at least one “unscrupulous company is using information from CSLB’s website to contact licensees or applicants to mislead and scam them”.  According to Mr. Sands, the caller leads the licensee or applicant to believe he or she works for the Contractors Board and needs to pay money over the phone to get continuing education credit, renew a license or to schedule a licensing exam.”

There is NO law requiring continuing education in CA or NV.  Further, CSLB and Nevada License Board staff will never ask for credit card information over the phone, nor do they have the authority to process any payment by phone.

The CSLB has begun putting warnings in place on letters sent to applicants and with their renewal notifications.  Both agencies have also prominently placed warnings on their web sites. Beware.