Lawsuits Disclosure, Construction Management and Foreign Corporation Licensing

A question from the Lone Star state and another from across the Atlantic ‘points’ to requirements in the Golden State others might find ‘foreign’ to doing business. First, while it may be a choice, you can ‘run’ but you can’t ‘hide’…

 Q:  I am listed as an Officer of a corporation that has a lawsuit pending.  Litigation will likely take at least a year.  I plan to disassociate from the license and open a new corporation with a “clean record.”  Will the pending lawsuit be an issue when we go to apply for a new Contractor’s License?

A:  While the pending lawsuit doesn’t necessarily prevent you from obtaining a new contractor’s license, I recommend that you disclose the issue with the CSLB when applying for a new license.  The application asks that you identify all judgments and it particularly specifies both- “pending or on record”.

 

Q:  We are a company based in Texas and we manage construction projects but we don’t actually do any of the work.  Consumers contact us and we will set them up with one of our preferred subcontractors to perform various services such as plumbing, electrical, landscaping, etc.  The individuals are paid by us but we do not employ them they each have their own contracting business.  We want to provide this service in CA as well.  Is our company required to have a Contractor’s License, or is it just the subcontractors that need to be licensed?

A:  Your company must have a Contractor’s License as well as each of the subcontractors performing the work.  The CSLB requires anyone providing or overseeing bids for construction, arranging for subcontractor work and schedules, and/or overseeing a project to be State-licensed.

 

Q:  We are Engineering corporation based in Spain and we have some work coming up in California and need to obtain a Contractor’s License.  Our attorney registered our corporation in the State of Delaware and is now working on registering us in CA as well. However, I now have several questions for you because after speaking with our attorney we both see that we may run into several roadblocks.  First, she informed us that all of our Officers need to get fingerprinted and if they don’t complete the requirement via live scan in CA the licensing process would be delayed significantly.  Is there any way to get around this if your Officers reside outside of the US?  Secondly, our attorney also informed us that all persons listed on the application need to have U.S. Social Security Numbers.  Again, is there an exception for individuals who do not live in the United States?  Lastly, our employee who will serve as our RME (Responsible Managing Employee) does not speak/read English very well.  Does CA allow for translators to assist him with the exams?

A:  To address your first question, foreign corporations are only required to list their President and the Qualifying individual on the license application so they are the only two required to be fingerprinted.  Your attorney is correct in recommending that they come to CA and complete the requirement via live scan if timing is of importance.  Secondly, if the individuals on the application do not have Social Security Numbers, they can provide their Individual Taxpayer Identification Number in lieu of a SSN.  Lastly, there is a box on the license application that your RME can check to request a translator for the exams.  The translator must be approved by the CSLB in advance and they will send him the information on the process once your application is submitted.

More Generals, “C-42” & Waivers, Sole Owners & Responsible Managing Employee/ RME

It’s important to ‘look before you leap’ because some actions have one-time only limits we share with our first contractor. However, with expert assistance a ‘soft’ landing may still work out. Another Sole Owner could get busier by becoming ‘inactive’ as a RME…

Q:  You just recently helped me with adding the “C-42” (Sanitation Systems) classification to my “A” (General Engineering) license.  We were successful in obtaining a Waiver of the “C-42” based on the fact that I have had the General Engineering license for so long.  I am now in need of your help with adding the “C-36” (Plumbing) and “B” (General Building) classifications to my license.  Can you help me with that as well?  Would I be eligible for a Waiver of those exams too?

A:  The Registrar of Contractors has the authority to grant a waiver of the license exams under two B&P Code sections – 7065.1 and 7065.3.  You were able to secure a waiver because you met all the criteria in 7065.3, including that the classification is “closely related to the classification or classifications in which the licensee is licensed, or the qualifying individual is associated with a licensed general engineering contractor or licensed general building contractor and is applying for a classification which is a significant component of the licensed contractor’s construction business”

This being said, I do not believe the CSLB would grant another Waiver for these two classifications since you must show at least four years of full time work experience in the trade(s) you are applying for.

The “C-36” may be easier to obtain because it is related to your other classifications; however, on the C-42” application you stated that you had over four years of full time experience doing Sanitation Systems work in conjunction with your “A” license.  The CSLB will likely question how you were able to perform all aspects of the “C-42” and “C-36” (full time) with your current General Engineering license.  Be prepared to provide documentation such as permits, contracts, and possibly project lists that pertain specifically to your plumbing work.

The “B” license may be more difficult since it requires the four years of full time work experience to be in framing and at least two unrelated trades. Since the “B” classification is not closely related to your current license, nor to the work experience that you just recently provided to the CSLB to obtain the “C-42” classification, I believe it’s unlikely the CSLB will approve you for the “B” General Building classification, even with taking the exam. However, all is not lost.

Another option is to hire someone to be your Qualifier who either already has a “B” or “C-36” license, or has the documented experience in order to sit for the exams.  You can then replace that person after the appropriate number of years.

Q:  I have a Sole Owner license that I use every once in awhile to do jobs on the side.  My employer’s Responsible Managing Employee (RME) just resigned and they now want me to become RME on their license.  They told me that I wouldn’t be able to use my personal license anymore once I am added to their license.  Does that mean I have to cancel my license?  If I cancel it will I ever be able to get it back in the future if I decide to leave the company or go out on my own eventually?

A:  You don’t necessarily have to cancel the license.  You can always Inactivate it.  That way you can Reactivate in the future when you are ready to use it again.  There is a biannual Inactivation fee, but you do not need to maintain your Bond or Worker’s Comp with an Inactive license.  If you cancel the license and decide you want it back in the future, you are required to apply for a new license and then request your old number back.

“C-42” & Generals, HIS Changes and Disaster Scams & Unlicensed Contracting

Sometimes roads are easy, sometimes they need work and others are just rough. In making all the complex ‘wheels’ in government click together, a ‘bump’ in the ‘road’ of interpretation can sometimes knock it out of whack. That leads to some need for repairs, as all General Engineering companies know, the parts must mesh together for everyone to get the job done. With this ‘wrenching’ clarification we set straight a ‘bump’ that rattled parts of the industry across the state! …

In my article published on August 10, 2015, I responded to an “A” contractor. He was asking whether he could perform just septic work with his General Engineering license.  Based on information I received directly from the CSLB, I responded that an “A” contractor could not perform just septic systems unless it was in connection to a project that required specialized engineering knowledge and skill.

Again, based on information received from higher authority at CSLB, I advised him to add the “C-42” (Sanitation) classification to his license if he was doing strictly septic system projects.  After receiving multiple calls from extremely baffled General Engineering contractors who had been performing septic system projects for many years with their “A” license, I went to the top and contacted the Registrar of Contractors, Cindi Christenson, to further clarify our inquiry.  Mrs. Christenson quickly had her staff research this further and it was determined that in fact, yes, an “A” contractor can perform septic systems!

In the CSLB’s Building Official Guide it states “A Plumbing (“C-36”) contractor may contract and pull permits for installation of a seepage pit or other components of a septic system.  A General Engineering (“A”) contractor or Sanitation System (“C-42”) contractor may also perform this work.”  Further, the guide also states that an “A” contractor is permitted to take a contract to perform single specialty trades when that work is needed to complete a larger project which requires specialized engineering knowledge or skill. These differing interpretations were of immediate concern to CSLB leadership.

All of that being said, the Contractor’s State License Board plans to re-evaluate whether there is a consumer protection need that would require them to revisit the scope of work “A” contractors may perform.  As always, we will keep you informed of any changes or updates.

As it is always our goal to keep contractors in the loop of any changes or updates, Governor Edmund G. Brown Jr. recently signed Senate Bill 561 simplifying the HIS (Home Improvement Salespersons) registration process.  Effective January 1, 2016, HIS individuals will only have to register once while still representing multiple employers.  Currently, HIS individuals are required to register with the CSLB separately for each contractor that employs them.  HIS applications have been rapidly on the rise, particularly in the solar industry, so this new bill will simplify and quicken the registration process.

Consumer & Contractor’s Note: Sadly, much of California is up in smoke with the wildfires that have engulfed a vast amount of land and property. The CSLB is warning wildfire victims to be wary of deceitful and unlicensed contractors soliciting to rebuild your homes or businesses.  Always remember to avoid rushing in to any agreements and check the license first!

CSLB’s SWIFT investigators are already on the job in the counties that have been affected on the lookout for unlicensed contractors. Still, buyers beware.

These subjects confirm the CSLB’s objectives of protecting the public while also looking out for the contractors they are licensing at the same time.

Listing Officers & Foreign Corporations, Expired Licenses & Judgements

A contractor outside the Golden State wants to wear three ‘hats’ at once and that’s okay. Unlike some people might suggest, sometimes you just won’t get a ‘second’ chance, without starting over from scratch. We also find inspiration in an aspiring contractor who learns that when ‘there is a will, there is a way’ and expert assistance to help reach your goal…

Q:  We have a North Carolina corporation that is licensed in several States and we now need to obtain a Contractor’s License in Nevada.  I understand that we are required to list our President, Secretary, and Treasurer on the license application.  To avoid having to have several people fingerprint, can one person serve all three titles?

A:  Yes, the same person can be listed as President, Secretary, and Treasurer, and that way only that individual (and your qualifying individual) would be required to complete the fingerprinting requirement.  Please note that the Officer that you list as all three titles will be the only individual with signing authority for the license, meaning renewals and any changes to the license, so be sure to designate someone who is available for those duties when needed.

Q:  I was an Officer on a license that I let expire back in 2005 because there were a few judgments against me that I couldn’t pay at the time.  Is there a way for you to find out for me exactly what I owe so that I can satisfy them and get my license back?

A:  Unfortunately, once a license has been expired for over five years you cannot get it back; you will be required to apply for a new license.  In order to be approved for a new license you will be required to satisfy any judgments associated with your previous licenses.  If you authorize a Power of Attorney (POA) for me, I can inquire with the CSLB as to what requirements you must meet.  Once met, we can then assist you with obtaining that new license.

Q:  I’m interested in purchasing a Wood Renewal Franchise in Southern California.  I discussed with the Franchisor and they suggested I contact you in order to understand if I am eligible to be licensed.  I was told I would either need a “C-33” (Painting), or a “D12” (Synthetic Products) license.

I have no work experience in painting or construction.  I have sales and management experience (more than 20 years and now at Director level), however I am ready to study and take any exam that may be necessary.

A:  Unfortunately, it doesn’t sound like you yourself will be able to sit for the exam until you are able to show some work experience in the trade that you are applying for.  The CSLB requires at least four years of full time work experience in the trade and at least one year of that experience needs to be practical experience.

Don’t be discouraged yet though!  You do however have the option of hiring someone who can qualify the license for you and then you can replace that person on the license after you have the four years under your belt.

Just FYI, you can also use education in lieu of a portion of the experience requirement, but you still have to show some practical experience.

General “A” & Concrete, ‘Walk In” License Testing & Unlicensed Work Experience

Can you walk right in, sit right down and take the license exam? A General wants to get off the ‘asphalt’ and set up a ‘concrete’ detour, while a handyman walks the line, only occasionally running over the rules…

Q:  I have an “A” license and my company generally does roadwork construction.  A subcontractor who we frequently use for various projects, requested that we do some concrete work for a residential job that he is doing.  Are we allowed to take a job for just concrete with our General (“A”) license?

A:  According to the CSLB’s website, “an “A” contractor can contract to perform all or any part of a project that falls under the “A” classification…therefore an “A” contractor could take a contract to build a fence or pour concrete if the work was originally or is currently part of the type of projects listed in B&P Code section 7056 (airports, roads and similar “fixed works”).

That being said, B&P Code section 7056 lists various projects that fall under the “A” classification such as roadwork, power plants, pipeline, etc. but with regards to concrete it states “paving and surfacing work and cement and concrete works in connection with the above-mentioned fixed works.”  My interpretation of that is that no, you would not be able to contract for just a concrete job unless it is in connection to a project that required other engineering knowledge and skill.

Q:  I am currently in the process of obtaining my license and the CSLB recently scheduled me a test date but its three weeks out.  I was hoping to get in sooner because I have a project coming up that I want to bid on.  Is there any way to get my exam date pushed ahead?

A:  Yes, once you have an exam date the CSLB allows you to take the exams on a walk-in basis in any of their testing locations.  From what we hear, the walk-in method is very successful.  We always recommend bringing your testing notification with you. Good luck!

Q:  I am self-employed and have been doing construction work for many years without a license.  Most of my projects are under $500, but I do admit that I have done projects that have been over $500.  I want to obtain my contractor’s license, but I’m not sure how to document my experience since it was un-licensed work.  Will I automatically be cited when they are made aware of my work?

A:  When you apply for a contractor’s license, the CSLB doesn’t automatically cite you when you document un-licensed activity.  The CSLB’s goal is to license experienced contractors because they do not want you to continue operating without a license.  The key for you will be documenting your history, as self-employment experience is difficult to prove.  When you submit your application the CSLB will likely give you a list of supporting documents (in addition to your Certification of Work Experience page) that you may need to supply such as permits, contracts, cancelled checks, etc.

 

Foreign Corporation Licensing & SS Numbers, NV Sandblasting & Licensing at Sea

While our focus is often California and contractors working the Golden State, we also work over the borders. From our far northern neighbor to next door in the Silver State, these questions come from contractors putting miles on their licenses…

Q:  We are a Canadian corporation and need to obtain a CA Contractor’s License.  On the application it states that all individuals listed on the application are required to list their social security number.  We are all citizens of Canada and do not have US social security numbers.  How do international companies do contracting work in CA?  Would a passport suffice?

A:  The CSLB recently amended that requirement to allow for non-US citizens to be listed on the license applications.  However, if any personnel listed on the application do not have a social security number, they are required to instead list their Individual Taxpayer Identification Number.  Unfortunately a passport cannot be used in lieu of the required social security number or Individual Taxpayer Identification Number.

Q:  My license is set to expire in a few days, on August 31st.  I called the CSLB and they said that they would send me one but it would be at least a week.  Is there any way to expedite that?

A:  Capitol Services is located here in Sacramento and we can pick a renewal application for you, but we need to have a Power of Attorney to obtain the renewal for you.  That will reduce mailing time.

Q:   I am a licensed contractor in CA.  I have an “A”, and Hazardous Waste certification. I need to know if I need a Painting “C” license or can I do sandblasting under the “A”?  If I need this can I get any testing waived? I also would like to know how difficult is it to get reciprocity for a NV license?

A:  In most instances, you would need a sandblasting (“C-61”/”D-38”) license to perform this type of limited specialty.  It is NOT necessary to secure a “C-33” (Painting) class unless you do more than sandblasting.  You’ll be required to file a completed application detailing your work experience.  While the “A” is a very broad classification, I do not believe sandblasting would be considered part of “general engineering”.  There is no testing for this trade.

The Nevada Contractors Board will likely require that you secure the “C-4d” (sandblasting) class to perform this work.  Regarding the trade exam and reciprocity, this should not be an issue.  Nevada has NO trade test for the “sandblasting” specialty license.  However, you’ll still need to show 4, or more, years experience in this trade and pass the business management exam.  Most important is the comprehensive application process Nevada requires for ALL applicants.

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!

Work Experience, Worker Comp, NV “C-4” & Losing Your Qualifier

What is ‘lost’ can be found! An Oregon contractor heads south alone, and while you may be a ‘stud’ contractor in another state it’s a little harder to make the same claim for work in California…

Q:  I had a contractor’s license many years ago and I want to get it back.  I understand that since it’s been over five years I need to re-apply and take the exams again.  Is it necessary for me to complete the “Certification of Work Experience” portion of the application since I have been licensed in the past?

A:  No, you do not need to provide a Work Experience page if you have been licensed in the past.

Q:  I am an Oregon contractor and I am going to be applying for a California contractor’s license.  Do I need to carry Worker’s Comp Insurance if I’m not going to be employing anyone for the work I’m contracting for?  I will be sub-contracting all of the work.  In the event that I do want to use my employees to perform the work, am I subject to maintain California Workers Comp?  My employees would come from Oregon to California for less than a month at a time and they are covered through my Oregon Worker’s Comp Insurance policy.

A:  You do not need to carry Worker’s Compensation insurance if you will be sub-contracting all of your work and not employing anyone.  You also do not need to maintain California Worker’s Comp if you are utilizing Oregon employees that are covered under your out of state policy.

 

Q:  I have a “C-4” (Painting and Decorating) license in Nevada that covers me to do painting, metal stud framing, drywall, and acoustical ceilings.  I need to get a license in California and I wanted an expert opinion on what the equivalent  classification would be?

A:  Here in California you would need a “C-33” (Painting) license in order to perform the painting work, however the Painting class does not allow you to do metal stud framing, drywall, or acoustical ceilings.  To perform those trades you would need a “C-9” (Drywall) classification.  Remember that you can only do one at a time so you will need to apply for one classification and then add the second one after the first is issued.  Depending on how long you have been licensed in Nevada you may be able to qualify for a Waiver of the “C-33” trade exam.  Contact us if you’d like assistance with this.

Q:  Our Corporation just recently obtained a Contractor’s license by hiring an individual who already had a license (he Inactivated it in order to Qualify for us).  We are wondering what happens if our RME (Responsible Managing Employee) leaves the company?  Will we need to re-apply for a new license?

A:  The license belongs to the corporation, so no, you will not be required to apply for a new license.  When a Qualifier leaves or Disassociates from the license, the corporation has 90 days in order to replace that individual.  If you do not replace the Qualifier within 90 days, the license will go Suspended until a new Qualifier is added.

Tax Suspense, NV & AZ Reciprocity Changes, “C-61/D-12” Coverings & Synthetics

Not paying taxes is a no, no and that’s the unfortunate answer required in our first Q&A. While reciprocity is a benefit for licensed CA contractors, there are still some ‘general’ rules that can’t be skipped. Another questioner is ‘floored’ by news that he will be required to have the appropriate contractor’s license and appropriate classification to ‘seal’ the deal…

Q:  Our Corporation is currently suspended with the Secretary of State because we failed to pay taxes the last few years (we weren’t doing any business in California).  We now have a big job opportunity in Southern California and need to get everything in order so that we can sign the contract.  I looked up our contractor’s license and it shows a former employee still listed as our Qualifying individual.  Can we work on replacing him on the license prior to dealing with the tax issues?  I just wanted to hopefully get a head start on these items if possible.

A:  No, no. The CSLB will not add the new Qualifier until your corporation is back in good standing with the Secretary of State.  You must meet all Suspension requirements before you can add a new Qualifying individual.

Q:  You helped my company obtain a General Contractor’s License in California in 2012.  I am the one who took the exams and I am listed as a Responsible Managing Officer (RMO) on the license.  We now need to obtain our license in Nevada and Arizona.  Can we do this with reciprocity and waive the exams?

A:  Thank you for contacting us again.  Nevada requires that you be actively licensed in one of the reciprocal States for five out of the last seven years.  Since you only obtained your license in 2012 you will not meet the reciprocal requirement in Nevada.  Arizona doesn’t have “reciprocity” any longer, however they allow for you to Waive the trade exam (the Construction Business Management exam is still required) if you can show that you: a) passed the equivalent exam in another State, and b) your license has been active and in good standing at some point within the preceding five years.  It does sounds as if you qualify for a Waiver of the trade exam in Arizona.

 

Q:  We are a flooring company and I need to know if I need a contractor’s license, and if so, what type of license would be required? The main type of work that we have always done is carpet and floor (tile, concrete, laminate) cleaning.  But we have started to occasionally do more extensive cleaning such as coatings on the concrete and laminate floors as well as touch up caulking on tile floors.  We have a potential job coming up for a large retail facility and I want to make sure that we are in compliance.  Thank you for your advice.

A:  While you are not required to have a contractor’s license to do carpet/floor cleaning, you do need a license for the more extensive work that you mention such as seal coatings.  The appropriate classification for that type of work would be a “C-61”/”D-12” license.  There is no trade test for the “C-61” classifications, only the Law exam is required.  The “C-61”/”D-12” (Synthetic Products)

license covers resin and epoxy applications as well as synthetic caulking and sealants.  As with all classifications, you will need to have a qualified individual who can show at least 4 years of experience doing this type of work.  Give us a call if you’d like assistance with obtaining this license.

“C-42” Generals, Section 7048 Scope, Installations and Licensing

The rules are complex and contractors would be hard-pressed to know them all. Do you know if the guy installing your kitchen appliances needs a license? When is it ‘handy’ to not hire a licensed contractor in California? But first, we help a General get his ‘stuff’ together for the “C-42”…

Q:  I am a “A” (General Engineering) contractor and I have been doing septic work with my license for over 20 years.  I had a dispute with a customer that resulted in the CSLB getting involved.  Even though the dispute was unrelated to my classification, the CSLB cited me for contracting outside of scope.  It was my understanding throughout the years (and when I originally obtained my license) that septic work was covered under the “A” license.  Is that not the case any longer?

A:  If the septic work is in connection to a project that requires specialized engineering knowledge and skill then you can do the work with the “A” license, however a General Engineering (“A”) contractor cannot contract for just septic work.  That would require a “C-42” (Sanitation) classification.  It sounds as if you have the requisite background (4 years of full time work experience) to add that classification to your license and you may even be able to qualify for a Waiver of the exam if you can show that “C-42” work is a major part of the work you do with your “A” license.  Please feel free to contact our office if you’d like assistance with the process.

Q:  Under Section 7048 of the California B&P Code, no license is required for work under $500 (inclusive of materials).  Does that mean that we could have an unlicensed handyman do basic plumbing (such as unclogging drains, install faucets, etc.) so long as the total cost does not exceed $500?

A:  That is correct.  As long as the total cost of the project is under $500, labor and materials included, a contractor’s license is not required.

Q:  Do I need a contractor’s license to do appliance installations in homes?

A:  It depends on what type of appliances you are installing.  Basic appliances such as refrigerators, dishwashers, washing machines, etc. don’t typically require a contractor’s license.  However, anytime you are installing major appliances and ventilating hoods that are in connection with existing fuel and energy lines, you are required to have a contractor’s license.  A “C-61”/”D34” (Prefabricated Equipment) would be the appropriate classification for that type of work.

Q:  My license is set to expire at the end of the month and I can’t find my renewal.  I called the CSLB to order another one and they told me that they are taking about a week and a half to send them out and that the application goes out regular mail.  I’m concerned that with the mailing time and processing time once I send it back, it will show Expired for a period of time.  Anything you can do to help?

A:  First of all, we can pick up one up for you in person if you authorize us to do so with a Power of Attorney.  We can then email to you for signature and you can send it back to us with the State fee and we can deliver it for you.  Secondly, I would recommend that just in case they don’t process it in time, you request that the CSLB retroactively renew your license to the expiration date.  They typically do this anyway, as long as the renewal was submitted in a timely fashion, but at least you would have something on file making this request.