College Experience, JV’s & LLC’s Licenses, Suspensions and Agents for Service

Contractor’s law can sometimes make for some funny, even strange, changes when you reorganize, as you will see, logic does not always apply. Accurate, up-to-date documents are essential to ‘win’ bids or work, so you already know what happens when you take your eye off the ‘prize’, while we all learn a ‘secret’ about replacing an agent. We begin with an aspiring contractor who may succeed in using his education as experience, but I can’t really say to what ‘degree’…

Q:  I want to get my Contractor’s License and some of my experience is from a long time ago and I know they will only consider experience within the last ten years.  I only have two years of construction experience within the last ten years.  Will the CSLB give me any credit for an AA degree from a Community College?

A:  If your Associate Arts (AA) degree is in Building or Construction Management, the CSLB will give you up to one and a half years of experience credit.  You will need to submit your sealed transcripts along with your license application and the CSLB will determine the months of experience credit based on the courses you completed.  They typically give credit for the fields of construction, accounting, business, etc.

Q:  We currently have a corporate license as well as several Joint Venture (JV) licenses.  We are in the process of transferring our corporate license to a newly formed Limited Liability Company (LLC).  Since we are keeping the same license number, will the JV licenses automatically be updated with the new entity, or do we need to do something on our end to notify the CSLB?

A:  When a Sole Ownership or Corporate license number is reissued to an LLC, all Joint Venture licenses that were associated with them are cancelled.  You will be required to reapply for the JV license and be issued a new license number.

The remaining entities of the Joint Venture can request a continuance of the JV license in order to complete projects already contracted for or in progress before the Cancellation Date.  The CSLB may grant a continuance for a period of up to one year.  This request for continuance must be submitted within 90 days after the cancellation date of the JV license.

Q:  My license was recently suspended for not having Worker’s Comp.  I was under the impression that my insurance company would be sending an updating certificate to the CSLB but they apparently did not.  I submitted the updated certificate but they told me that it will take up to two weeks to apply it to the license and lift the suspension.  Am I allowed to continue working since I technically have a policy in place and the CSLB has confirmed that it’s been received?

A:  Any contracting work done while the license is Suspended is considered unlicensed and you risk disciplinary action by the CSLB.  I would suggest contacting the Worker’s Compensation unit to see if they can apply it immediately due to the Suspension.  It’s worth a try!

Q:  We are currently registered with the California Secretary of State.  The “Agent for Service of Process” showing on their website is no longer with the company.  We have the form for “Resignation of Agent” but I can’t find out how to replace the agent.  Can you give us some advice on this?

A:  In order to update your Agent for Service of Process, you need to file a new Statement of Information.  There is no need to file a “Resignation of Agent” when filing a new Statement of Information.

Waiver Limitations, Corp to Sole Owner Transfers and “A” or “B” License?

Like a broken ‘pinata’ after you’ve spilled the candy some time has to pass before you can take another ‘waiver’ and expect candy again. Another contractor’s ‘sole’ purpose is to continue working after his company quits!  I also help an Oregon contractor make a good landing in taking a ‘leap of faith’…

Q:  My company has had a “B” (General Building) license since 2010.  My boss added the “C-33” (Painting) classification to the license in 2011.  The boss has been wanting me to get my license in case anything ever happens to him.  So last year I applied to replace him on the license with a Request to Waive the Exams based on B&P Code Section 7065.1.  The CSLB approved the waiver of the “B” but denied a waiver of the “C-33” because it had not been on our license for a full five years at the time.  Instead of taking the test, we just removed the “C-33” from our application and only moved forward with the “B” classification.

It has now been over five years since we’ve had the Painting class so I’d like to now apply to replace him with another Waiver of the Exam.  Can you help us with that?  I just don’t want there to be any hiccups in the process this time.

A:  While I can also suggest several ways to avoid real hiccups, since you were just granted a Waiver of the “B” classification last year, you will not be able to request another again so soon.  Under B&P Code Section 7065.1(c)(3), a firm cannot request a Waiver under this subdivision more than once within the past five years.

Q:  I am the Responsible Managing Employee (RME) for a Corporation.  The owners are going to retire and shut the business down.  How do I go about getting the license number put in my own name?

A: The license number cannot be transferred to you as an individual.  The license number belongs to the corporation, not to you as an individual.  You will need to apply for a new Sole Owner license and you will be issued a new number.  You will also need to Disassociate from the Corporation’s license.  When applying for the Sole Owner license you will not be required to re-test, however you will need to provide a Bond and if you are hiring employees, proof of Worker’s Compensation Insurance.

Q:  I am a Contractor in Oregon and I will be moving to California this summer and I’d like to get a jump start on the application since I know these things can take some time.  I do General Construction (ground up construction as well as remodels).  I’m not sure if I should apply for the “A” or the “B”.  I was thinking the “A” because, doesn’t it cover everything?

A:  Good idea to get a jump start on the licensing process!  It is a common misconception that the “A” (General Engineering) classification covers everything.  The “A” classification is for contractors whose principle business is in connection with fixed works which require specialized Engineering knowledge.  From what you described, it sounds like the “B” (General Building) license would be more appropriate.

Adding “C-7” & Telecommunications, Cost for Retaking the Test and Inactive Licenses

A contractor ‘stepping up to the plate’ for his first application ‘triples’ a question down the right line in seeking expert advice. Another interested in getting back to work discovers there is an extra step or two because of his ‘inactivity’.

Like a rerun of Johnny Carson’s rerun of The Tonight Show’s fortune teller act Karnak-The-Great, I ‘telecommunicate’ an answer for an electrical contractor…

Q:  We currently have a “C-10” (Electrical) license.  I am aware that we can do low voltage work with our current license, however some of our customer’s request that we have a “C-7” (Low Voltage) license in order to do telecommunications work.  How difficult would it be to add that classification to our license?  Would I have to take the test?

A:  B&P Code section 7065.3 allows for Contractors to request a Waiver of the Trade Exam for some additional classifications – if the classification is closely related to your current license and is a significant portion of the work you perform.  These Waiver requests are reviewed on a case-by-case basis and is dependent on your work experience and project background, but I believe you would have a pretty good chance of being approved to Waive the exam based on your “C-10” experience.  Waiver requests need to be done in writing.

Q:  I’m scheduled to take the “B” (General Building) exam at the end of the month. (1) If I don’t pass how much does it cost to retake it?  (2) How long do I have to wait to take it again?  (3) Is there a limit to the number of times I can take it?

A:  If you fail the exam you are required to pay a $60 rescheduling fee.  The fee should be submitted with the application on the bottom of the notice informing you that you didn’t pass.  The CSLB will then reschedule you for the exam (usually about 3 weeks out), and you can take the exam as many times as needed within an 18-month period.  If you don’t pass within 18 months, your application ‘strikes out’ and will be void.

Q:  I have an Inactive license that I obtained years ago and I want to Reactivate it.  The Responsible Managing Employee (RME) that I used to obtain the license no longer works with me and I want to become the Responsible Managing Officer (RMO) on the license.  Can I still reactivate it?

A:  Yes, however, a reactivation application requires the signature of your Qualifier.  Therefore, I would suggest completing an Application to Replace your Qualifier in order to then add yourself as the RMO, and then request a Reactivation application. Call if you need any assistance.

 

NV Financial Statements, “C-17” and Input on CA Water Recycling

New ‘recycled’ rules are being written and contractors are needed to help build them.  To paraphrase Jagger, ‘while you can’t always get what you want, sometimes you can get what you need’ as a Glazer learns. While you can bet on almost anything in Nevada, your ‘finances’ are never in ‘play’ when applying for a contractor license…

Q:  I am in the process of completing an application for a Nevada Contractor’s License. The application states that we need to provide a Financial Statement no more than a year old. Our fiscal year end is March 31st so the last audit that we had done is dated March 2015.  Our next audit will not be complete for another month, which is exactly when the bid date is for the project we are seeking in Nevada.  Will the Nevada Board accept our last financial statement if we provide a letter from our accountant stating that new one is not complete yet and explaining that March 31st is our fiscal year end?  If not, can I at least take the exam ahead of time?

A:  No, unfortunately Nevada will not budge on the requirement.  You absolutely have to provide a Financial Statement dated within the last year.  They will not approve you to take the exam prior to providing an acceptable financial statement.

Q:  I have a friend who sells windows in Washington and he wants to move his shop to California and also obtain a “C-17” (Glazing) contractor’s license.  He doesn’t have any experience installing windows though.  I have the “C-17” classification on my license; is there a way I can help him get his license?

A:  Your friend will first need to decide how he intends to conduct business in California (Sole Proprietor, corporation, LLC, etc).  You can act as the Qualifying Individual on his license since you already hold the “C-17”, however depending on your title and percentage of ownership, you may need to Inactivate your own license.  Feel free to give me a call to further discuss your options.

Capitol Services Contractor’s Note:               

Contractor input is being sought to assist in the development of recycled water system standards for newly constructed residential, commercial, and public buildings, and landscaped areas around building sites. A series of stakeholder meetings to implement Assembly Bill 2282 will be held in Sacramento.

The steering committee meeting is sponsored by the California Building Standards Commission (BSC) and the state Department of Housing and Community Development (HCD.  Committee members will help BSC and HCD staff develop regulations amending the state’s 2016 Plumbing and Green Building Standards codes for recycled water systems as mandated by AB 2282, signed into law in 2014.

State Line Rule & Reciprocity, Worker Comp Exemption, Fingerprinting for LLC’s and Veteran’s Industry Expert Program

Like having a ‘ticket to ride’ you can’t bid without one. The ‘son’ won’t shine on the job without ‘insuring’ Dad’s safety ‘policy’ is in place. If you can handle the ‘truth’ there is a special alert for Veterans, as CSLB is looking for a few ‘good’ contractors…

Q:  You helped our company add the “B” (General Building) classification to our license at the end of last year and I’m wondering if the “B” license allows us to bid work outside of California in neighboring states? If not, can it work the opposite to where a contractor in a neighboring state can bid work in California without a contractor’s license?

A:  Your California license, regardless of classification(s) held, is only valid within the State of California. Likewise, Contractors in neighboring States cannot bid or perform construction work over $500 without a valid California Contractors License.

California has a limited reciprocal agreement with it’s neighboring States, including Nevada, Arizona, and Utah.  If you meet the requirements, you are eligible for waiving the trade exam when applying for a license.

Q:  I am a small independent contractor with no employees.  I have an Exemption from Worker’s Comp on file with the CSLB.  A homeowner recently accepted my bid for a larger job, and I think I’m going to need some help to complete the project in the time frame they are requesting.  My son just graduated from high school, is it okay to bring him along to help?

A:  In order to have anyone helping you on jobs, whether it be a relative, friend, etc. you absolutely must have a Worker’s Compensation Insurance policy in place.  Any person who accompanies you to a job site to do work is considered your “employee” under State law. It protects you, your workers and your client.

Q:  We are going to convert our California Contracting company from a corporation to a Limited Liability Company (LLC).  We obtained the license prior to the fingerprinting requirement, so the CSLB informed us that when we apply for the new license all individuals listed on the application will need to get fingerprinted.  What if instead of applying for a new license, we apply to transfer the license number?  So it would be the same people on the current license, same entity, same EIN number, etc.  Would fingerprinting still be required?

A:  Yes, fingerprints are still required to be on file even if you are requesting to keep the same license number.  Even by transferring the number, you are still applying for a “new” license and requesting the number to be re-issued.

Attention Veteran Contractors:  The CSLB is currently looking for veteran contractors in the central part of the state to join the Industry Expert Program (IEP), which is a group of trade professionals who help the CSLB with investigating consumer complaints.  Specifically, they are looking for “C-57” Well Drilling contractors in the Fresno area, and “C-8” Concrete, “C-12” Earthwork and Paving, and “C-23” Ornamental Metal Contractors in the Sacramento area.

Scope of RME vs RMO and Qualifier Signing Rule

A contractor decides his days as a Qualifier have run their course, so what now? First, Mom may or may not have the right idea. While ‘multiplicity’ was in a movie being in more than one place at the same time is still impossible in the real world, even for contractors!…

 Q:  My son wants to get his contractor’s license but he doesn’t have the required four years of experience.  He was told that he needed to have an RMO (Responsible Managing Officer) or an RME (Responsible Managing Employee) in order to Qualify for the license.  He’s really hesitant to hire someone and give them an Officer title, but my thought is since he plans on having multiple jobs in progress at the same time he needs to go with the option of RMO, because isn’t it illegal for an RME to not be supervising all projects?

A:  While an RME does have certain responsibilities that are not required for an RMO, the CSLB understands that an individual cannot be in multiple places at the same time.  Some companies have hundreds of projects in progress at the same time, and certainly an RME, or RMO for that matter, cannot be on site of every single job.  B&P Code section 7068.1 states that a Qualifying Individual must have direct supervision and control of their employer’s construction operations, which includes any one or combination of the following activities: “supervising construction, managing construction activities by making technical and administrative decisions, checking on jobs for proper workmanship, or direct supervision on construction sites.”  Further, the section requires that an RME be permanently employed by the licensee and actively engaged in the operation of the licensee’s contracting business for at least 32 hours or 80% of the total hours per week during the business operations, whichever is less.

Q:  I purchased a contracting business 8 years ago and the seller stayed on the license as my RME since I didn’t have the requisite experience yet.  My license is up for renewal at the end of this month and when I gave him the renewal to sign, he said he no longer wants

to hold the position and therefore is willing to sign the renewal, but would prefer not to if he doesn’t have to.  He stated that I could apply to replace him and request to waive the exams.  Is that possible and how long does the process take?  I’m worried that the CSLB will not accept the renewal without his signature, but I was thinking I could just indicate on the form that he has resigned.  Please provide me with any guidance you may have.

A:  First of all, you are correct that the CSLB will not accept the renewal application without the Qualifying Individual’s signature.  You can apply to replace your RME and a waiver of the exams may be granted if you meet the specific requirements.  Most importantly, you must show that you have been employed and working in a supervisory capacity for the company for five out of the last seven years.  The process of replacing him will take several weeks, so since your current Qualifier is willing, it will be beneficial to you to have him sign the renewal to avoid a lapse in the license.

 

Family Waiver, Signing for Experience, “C-20” and Adding Inc. To Your Name

Among the best advice I received as a kid was ‘documentation’. Keeping good records is important. For current and future contractors that’s also always going to be true, especially when counting on ‘experience’ in a license application. We also ‘incorporate’ a good lesson for all Soles to remember…

Q: I’m going retire and my son wants to take over my license. I heard there is a CA “family waiver” option where he would be able to keep my license number and not have to take the exams. How does that process work and what are the requirements?

A: In order to qualify for a Family Waiver, he would need to make the request in writing, and your son will need to show that he has been employed by you and actively engaged in your business for five out of the last seven years. He will likely be required to provide W-2’s to document this employment.  The CSLB will also verify that you have carried Worker’s Compensation attached to your license for those five years. Keep in mind that no Waiver request is automatic, the Registrar has complete discretion with regards to these requests.  Contact our office if you’d like assistance with the process.

Q: I have worked for a General Contractor for over five years. I typically do all of the carpentry work for him and I’d like to obtain my own “C-6” license.  Do I have to have my employer sign off on my experience?

A:  Anyone who has firsthand knowledge of your work experience can sign your Certification of Work Experience page.  He or she must have actually observed your work.  Examples other than your employer include fellow employees, other journeyman, contractor, union representative, building inspector, architect or engineer.

 

Q:  I let my “C-20” (HVAC) license expire two years ago because I went to work for a General Building company.  My company wants to add me as a Responsible Managing Employee (RME) and use my “C-20” qualification on their license.  Do I need to re-activate my license first in order to be the RME on my company’s license?  Am I required to oversee all of our “C-20” projects?

A:  No, it is not necessary to re-activate your license in order to add the HVAC “C-20” to your company’s license.  Once your license expires, you have up to five years to act as the Qualifying Individual on a license without the need to re-test.

An RME is required to work a minimum of 32 hours a week or 80% of the company’s operating time, whichever is less.  You are required to be a bona-fide employee and actively involved in the day-to-day operations of the company.  As long as you meet these requirements, you are in compliance, which many times means that you cannot oversee all projects.

Q:  I have a Sole Proprietor license and I recently Incorporated under the same name, just with “Inc” at the end.  How do I change my business name on my contractor’s license to reflect the “Inc”?

A:  Contrary to what many people think, a business entity changing, such as a Sole Proprietor to a Corporation, is not as simple as a name change with the CSLB.  You will need to apply for “new” contractor’s license in the name of your corporation.  As long as you own at least 51% of the corporation you can request that your Sole Owner license be re-issued to the corporation.