Jetways Installation, CA & NV Expired Licenses and HVAC/HERS Alert

“Measure twice and cut once” is a good rule carpenters use to get a cut right. Getting the right information in the highly complex license regulations that ‘rule’a contractor’s world is also essential. We ‘take-off’ with a mix of ‘half and half’ questions that help illustrate why contractors should consider expert assistance in following the rules different states require…

Q:  My Company installs passenger-boarding bridges at airports.  They are prefabricated steel bridges that go between the airport terminal building and the airplanes.  I’ve gone through the list and definitions of the CSLB classifications and I’m thinking that we would need either the “D-21” (Machinery and Pumps) or a “C-51” (Structural Steel) license to perform this work in California.  Can you give me an opinion on what you believe is the appropriate classification?

 

A: You are halfway to the right answer! It appears that some contractors still are licensed for this work with a “D-21” class.  However, in consulting with the CSLB, that is no longer the practice. These two classifications are what they say would be appropriate for this type of work, either the “C-51” Structural Steel classification, as you suggested, or the “D-34” (Prefabricated Equipment).

 

Q:  I previously had licenses in California and Nevada and I let them both lapse.  The California license has been expired since June 2012 and the Nevada license expired in August 2012.  Can I renew the licenses or will I be required to re-apply and re-take the exams?

A:  I’ll start with the good news: you can renew your CA license and you will not be required to re-take the exams.  Once a CA license expires, you have up to five years to renew the license without re-testing.  Nevada also allows five years to go by before you are required to re-take the exams, however the bad news is that once a Nevada license has been expired for a period of six months, you can no longer renew the license and you are required to re-apply for a new license number.  This will involve paying the license application fee, providing new financial information, and all individuals listed on the application will be required to get fingerprinted.

 

Q:  We are licensed General contractors with a “B”.  We are considering self-performing the Plumbing and HVAC trades for projects on which we are the General contractor.  Does the CSLB require us to additionally have a “C-20” and a “C-36” license, or may we perform this work under our “B” license?

 

A:  As a “B” contractor, you are able to self-perform the HVAC and plumbing work without obtaining the additional specialty classifications.  B&P Code Section 7057 addresses this topic and states that a “B” contractor must perform “at least two unrelated building trades or crafts other than framing or carpentry”.  Plumbing and HVAC are considered two unrelated trades so you are good to go!

 

Contractor’s Note: In a recent newsletter the CSLB reminds contractors to pull building permits to avoid license penalties.  As things heat up, pulling permits is especially important for “C-20” (HVAC) contractors whose work must also meet Home Energy Rating System (HERS) tests to comply with state Building Energy Efficiency standards.

The CSLB is now working with the California Energy Commission to ensure compliance through enhanced enforcement efforts to ensure that contractors are following state contracting laws, and HVAC contractors may be targeted in these stings.

Non-profit Qualifier, AZ Reciprocity and CSLB Penalties & Bankruptcy

The introduction of Limited Liability Company, or LLC licensing in CA has opened a relative ‘floodgate’ as contractors explore this new way to organize their companies. However, like all things, unexpected consequences come with this new way of doing business. We also touch on judgments in bankruptcy, license reciprocity state-to-state and wrap up with an interesting twist on qualifying more than one license…

Q:  We currently have a corporation in California and for the purposes of this inquiry I will call it ABC Inc.  ABC Inc. has had a contractor’s license for many years, and in the meantime ABC Inc. has obtained several other licenses with dba names (i.e. ABC Inc. dba XYZ).  We would like to convert the corporation to an LLC.  When we transfer ABC Inc.’s license to the LLC, will the CSLB automatically change the dba licenses to the LLC since it’s the same entity?

 

A:  No, the CSLB will not automatically convert those dba licenses to the LLC.  You will need to re-apply for each dba license separately.  Also, you mention “transferring” the corporation’s license to the LLC.  Please be aware that there are certain requirements that must be met in order to keep the corporation’s license number.  Please contact our office for further information if needed.

 

Q:  I have an outstanding civil judgment on my license and I’ve been told that one of the ways that a judgment can be “cleared” is by filing bankruptcy, naming the creditor in the bankruptcy, and then providing proof of those bankruptcy documents to the CSLB.  What if the creditor is the CSLB?  Is that something that is forgiven by filing bankruptcy?

A:  According to my research, you must pay any outstanding civil penalties owed to the CSLB as they are not dischargeable in bankruptcy.

Q:  Your company helped me get my low voltage electrical license many years ago in California and I have since moved out of State, however I have continued to renew my contractor’s license and it has remained inactive since I moved.  I would now like to apply for a license in Arizona and I am wondering if I still qualify for reciprocity even though my CA license has been on inactive status?

 

A:  Yes, in most cases Arizona still allows you to request the reciprocity waiver (depending on the classification) whether your license is active or inactive.

 

Q:  I currently have a Contractors License but I have started a non-profit company that will install energy efficient equipment for low-income housing.  I need to keep my license for income purposes, but I’d also like to be the qualifier on the non-profit corporation’s license.  I understand that in order to be on more than one license I need to have at least 20% ownership in each entity.  Does the CSLB make an exception to this rule since non-profits do not have owner/shareholder equity?

A:  Interesting question!  Unfortunately they do not have any exclusion to the law that allows for individuals to be on more than one license providing that one is a non-profit corporation.

Worker Comp & LLC Licensing, LLC’s in Public Bids and Education Credit

With social media, instant pictures and 140 character messaging it’s nice to know when your name comes up in actual conversation! Don’t be ‘alarmed’ but you may need a contractor license for ‘security’.  What license ‘works’ for public bids by a Limited Liability Company?..

 

Q:  In talking with a contractor friend, your name was recommended when we were discussing obtaining a specialty license.  I’d like to know if there is a procedure you may provide that takes into consideration education and related experience since I don’t have four years of field experience?

A:  Thank you for contacting Capitol Services.  While you must have at least one year of practical experience, the CSLB does consider education credit toward the four years of required work experience.  The amount of time they credit you depends on your education level, your field of study and the specific trade you’re applying for.  For example, the CSLB would likely give you two years credit if you have a four-year college degree in the field of accounting, business, economics, mathematics, physics, or area related to your intended trade.

 Q:  We are considering converting our corporation’s contractor license to a Limited Liability Company (LLC).  Currently we are exempt from Worker’s Comp insurance because we have no employees, only Officers.  Does the same hold true for LLC’s if we are all members or managing members of the LLC?

A:  If the LLC does not have employees and the only personnel consist of members or managers, it is our understanding that you can file the exemption from Worker’s Compensation.

As you may already be aware, LLC’s are still required to provide an insurance certificate. They must show Proof of Liability Insurance with the cumulative limit of $1 million for licensees with five or fewer persons listed as members of the personnel of record, and an additional $100,000 for each additional member (not to exceed $5 million total).

Q:  We are trying to start a contracting business and we’d like to form an LLC for this purpose.  We have just been told that if we do business as an LLC we will not be able to bid on or participate in any Public Works projects.  Is this true?

 A: It is our understanding that a LLC, just as any other type of legal entity, can bid on public works projects.

The CSLB has limited jurisdiction over who can bid on public works projects so the local government in question ultimately has the final opinion as to who can submit a bid.

As you probably know, prior to January 2012, the CSLB would not issue contractor licenses to LLC’s so it’s possible that the individual who told you this is unaware of the new law that allows LLC’s to obtain a contractor’s license. Call Capitol Services if you need further assistance in your application.

Q:  I currently have an alarm license but not a contractor’s license.  I was recently talking with a “C-7” (Low Voltage) contractor who does the same type of work.  Am I required to have that same type of license from the CSLB?

A: In most cases ‘security’ alarm operators who are licensed by the Bureau of Security and Investigative Services are not required to also hold a contractors license.  However, please note that if you are installing or servicing fire alarms then you are required to obtain a license with the CSLB.

Judgments, Disassociation and Using DBA’s

Answers to your problems are ‘on the house’ here, so we’ll start on top with a roofing contractor that changed hands recently. When a licensed partnership breaks apart, who can put the pieces back together again before it’s too late to save? Failing to act is a decision itself, and a former contractor finds his ‘judgment’ then may have cost him more now than he ever realized…

 

Q:  Our company recently purchased a roofing business, which is a corporation, and we would like to continue doing business under the well-established business name on their license, however we don’t want two sets of books.   Because our corporation purchased the assets of the roofing company, can we keep the roofing license number and company name the same while operating under our existing corporation?

 

A:  In the scenario you described, your existing business and the roofing corporation are two separate entities.  In order to operate under your existing corporation, you would need to apply for a new license number under your current corporate name along with a “doing business as” (dba) name that would reflect the name of the roofing business you purchased.  Even though you would ultimately have two separate license numbers, the “dba” entity would still be part of the existing corporation and therefore you would not need to do separate bookkeeping.

 

Q:  Our Qualifying Partner on our Partnership license unexpectedly disassociated resulting in the automatic cancellation of our license.  Can we request an extension?  How do we do this and who is required to make the request?

A:  According to B&P Code 7076(c) a Partnership can request a continuance of the license to complete projects contracted for or in progress prior to the date of a Qualifying Partner’s disassociation.  The General Partner must make this request in writing within 90 days after the disassociation.

 

I wish we could turn back the clock to help you, but I looked up your Partnership license and only the Limited Partner remains on this license.  You do not have a General Partner listed and that means that, unfortunately, you will not be able to request a continuance.  Limited Partners cannot make this request because the CSLB has determined that a Limited Partner’s only involvement in the business is financial, and they do not hold signing authority for the license.   You will need to apply for a new license and I recommend listing the General Partner on the application so that you don’t run in to this problem again in the future. Wish we could have helped at the start.

 

Q:   I used to have a contractor’s license for my corporation.  There was a judgment on the license that I never did anything about and my license is now expired and is still showing the unsatisfied judgment on there.  Can I just start from scratch and apply for a new license?  The thing is, I’m now in a position where I can pay the judgment but I have tried and tried to contact the former customer via phone, mail, and even Facebook and I have had no luck contacting him. What now?

A:  In most cases if your name is associated with an unsatisfied judgment the CSLB will require that you address it in some way (proof of payment, bankruptcy filing documents, etc) before you will be able apply for a new license.

That being said, showing proof of payment will be difficult if you are unable to contact the judgment creditor.  In some cases you can speak with the staff of the Small Claims Court where the judgment was filed to determine what steps to take, but either way, in this case you should consult with an attorney.

Qualifiers & Ownership, “C-4” or “C-20”, “C-35” or “C-9” & Swimming Pools

Like The Professor and Sherman from those old cartoon reruns, we fire up the ‘way back’ machine for a contractor’s question. A couple of contractors who’ve reached their ‘boiling point’ on bids need a short answer, and a long one. A General discovers they can play, but not get in the ‘pool’ alone…

Q:  You helped me get my license way back when and I have been the Responsible Managing Officer (RMO) for many, many years.  As I get closer to retiring, I am becoming less involved in the day-to-day operations of the company.  I am ready to pass the RMO torch to one of my employees and have him be the new qualifying individual.  I still have ownership in the company so my question is if I remove myself as the RMO, how does that affect my interest in the company?  I won’t be fully retired for another year or two.

A:  It’s great to hear from you again.  Changing the Qualifier on the license does not affect the ownership structure of the company.  You can even remain as an Officer on the license. Go ahead and pass the torch and of course contact us if you’d like help with the process!

Q:  My company has a “C-20” (HVAC) license and we do energy upgrades on homes. Part of this work sometimes involves replacing the boilers.  Recently another contractor told me I couldn’t do the boiler work unless we held a “C-4” Boiler classification.  Can you tell me if that’s correct?

A: A “C-20” HVAC contractor can replace boilers as long as it’s part of a heating system. They can not do just boiler replacement alone.

Q: I am a “C-35” Plastering contractor and I’m losing work to another contractor in the area who is a “C-9”Drywall contractor.  He is bidding on and signing contracts for drywall and plaster jobs and then subbing out the plastering to another “C-35” contractor.  Can a drywall contractor sign a contract for Plaster license work?

A: It all depends on the project.  In some cases the CSLB has determined that a specialty contractor can sign contracts involving trades outside of their specialty, and sub-contract the work to a properly licensed contractor if the work to be done is incidental and supplemental to the work being performed within their specialty trade.    In this case, if the plastering work is necessary in order to complete the drywall project then it is acceptable to take the job and then sub out the plaster part of the project.  However, if the drywall and plasterwork are two distinct jobs which can be performed separately (such as drywall inside a residential home and plaster outside of the home), then the drywall contractor should not be including that work in his/her contract.

Q:  I have a “B” General Building license and one of my customers would like me to put a pool in their backyard.  Since building a pool involves more than two unrelated trades, am I allowed to do this project for them?

A:  Although building a pool involves two or more unrelated trades, a General Building contractor cannot build a pool since it’s not a structure.  You can however take the contract for the pool if you hire a “C-53” Swimming Pool contractor to perform the work.  A General Building contractor can also build a pool if it is part of an overall building project, such as a new home or a large renovation project.