Unlicensed Scams in Diaster Zones, Officer Replacement and Stock or Asset Sale?

A ‘caveat emptor’ warning for contractors and consumers! However, we begin with ‘distinction’ in our first answer, and give another contractor some extra ‘time’…

Q:  I have a “C-9” (Drywall) license and I’m selling my business (Corporation) to a person who doesn’t have a Contractor’s License and cannot document the four years of experience to Qualify.  Can he just continue operating with my license number if he’s the owner?

A:  Is it an asset sale or a stock sale?  There is a distinct difference. If you are doing a stock sale, the Corporation can use the same license number.  If it will be an asset sale, the company would need to apply for a new license number.  Keep in mind that either way, the license needs to have a Qualifying Individual who is either qualified for the “C-9” classification based on prior licensure or by documenting the required experience and passing the exam.

Q:  Our President disassociated from our license in November of last year and we have yet to replace him.  Is there a certain time frame to elect a President and notify the CSLB?  I know when a Qualifier disassociates we are given 90 days to replace him/her on the license.

A:  No, there is no specific time frame the CSLB has for replacing an Officer on a Contractor’s License.

CSLB Issues Statewide Consumer Alert:

This Winter’s heavy rains and storms have left many asphalt roads and driveways throughout the State crumbling.  The CSLB urges consumers to beware of long-standing construction scam, in which unlicensed paving and seal coating contractors from out of state come in and take advantage of unsuspecting homeowners. 

“With heavy rain around the state this winter, it’s especially likely other groups of transient criminals are out there,” said CSLB Registrar Cindi Christenson. “Always be wary when someone shows up uninvited at your front door and says they’ve got a ‘great deal’ with leftover materials.”

The CSLB urges consumers and licensed contractors to watch for these red flags:

  1. No CSLB issued Contractor’s License
  2. Unsolicited offers to do seal coating, paving, roofing, or painting
  3. Claims of leftover materials
  4. High pressure sales or scare tactics;
  5. Reluctance to sign and written contract;
  6. Demand for payment in cash or checks written to individuals or their spouses, rather than to the business;
  7. Brand new vehicles, large pickup trucks with a large tank on the bed or pulling a trailer, dump trucks, or other heavy road construction equipment with out-of-State license plates, no plates at all, or obscured license plates
  8. Toll-free or out-of-State telephone number, instead of a local contact number

As stated in their March News Release, the “CSLB and DA investigators urge anyone in California who believes they were victimized by the group, operating with the company name “Blacktop Seal Coating” or “D & C Paving,” to immediately contact CSLB investigators at (916) 255-2924, or by email. You should also contact CSLB if you’ve been victimized, or even approached by others with a similar sales pitch, as transient criminals often travel in groups and operate under different personal or business names.”

A buyer beware world, our law enforcement depends on the public; consumers and contractors to be their eyes and ears on the streets of our communities.