Bond Indemnitors and General Solar Installation

In our age of Roomba’s and robot chefs, some things are still not ‘automatic’ with a contractor’s licensing paperwork. When you add one and one you don’t always equal two in this interpretation of contractor regulation. Go figure, it’s kind of a ‘trade’ off…

Q:  My husband and I started a company approximately two years ago.  The way we set it up was I was the President, Secretary, and Treasurer, and he was the Director.  We have recently separated, and I am remembering that I had signed for a Contractor’s Bond for the company.  I signed because the bonding company had informed us the rates were based on credit and I have the better credit score.  I have already disassociated from the Contractor’s license and Secretary of State personnel list.  Does the CSLB automatically remove me from the Bond so that I’m not responsible if there happens to be a claim against it?

A:  No, the CSLB does not automatically remove you as the Indemnitor on the Bond.  I urgently recommend contacting the bonding company you purchased the Bond from to determine the necessary actions you need to take. Stuff happens, so don’t wait. 

Q:  I am a homeowner and I found your website while searching the internet for help.  It looks like your company is more an advocate for Contractors and attorneys representing them, however, from your articles I read, it appears you can most likely answer my question.  I am hiring a Contractor to install solar panels on our roof.  He has a “B” (General Building) license.  I have used him in the past for other repairs and additions, so I trust him.  So, here is my question…can he do Solar work?  Because I read online that “B” Contractors can only contract for a job if they are doing two unrelated trades. 

A:  Thank you for contacting Capitol Services!  I don’t often hear from homeowners but I’m happy to answer your question.  You are correct in that “B” Contractors do need to be doing at least two unrelated trades on the same job, however, “Solar” in and of itself is considered two unrelated trades. 

Removing a Class, “D” Questions and Business Names

Well, it could be 20 questions, but this contractor will require a ‘special’ answer many can learn from before they send that application in. Knowing how rule interpretation changes over time is the reason why Capitol Services is the expert in assisting contractors. Another type of change has one contractor looking to get off the ‘roofing’…

Q:  I submitted an application to the CSLB recently under the business name “ABC Specialties Inc.”  I’m applying for a “D-34” (Synthetic Products) license, which is obviously a specialty license.  My company will be doing Division 10 specialties.  This refers to specialty items found in commercial buildings.  We will be installing toilet partitions, restroom accessories, wall and corner protection, and so on.  I called to check the status of my application and the person reviewing it said that she hadn’t completed the review, but one thing I could start working on was coming up with a “dba” (doing business as) name because my business name is not compatible with the work I would be performing.  When I asked about what was not compatible, she said it was the word “specialties”.  When I asked further, she said to just wait for her letter that would be sent soon with any/all corrections needed.  Can you explain this to me please?

A:  As I’ve written about recently, the CSLB has really been enforcing B&P Code Section 7059.1 on a different level than they have in the past, which basically states your business name must be compatible with your classification.  Without seeing the letter, I can suggest that their issue is one of two things: either they don’t like the plural word of “Specialties” because perhaps it could imply that you hold more than one specialtyclassification, OR it’s too generic and they want you to be more descriptive of what type of “Specialty” work you will doing.

Also, just FYI, since you want to start working on things ahead of time, the CSLB has been requiring that “D” applicants answer four questions so this request will likely be included in your deficiency letter.  The four questions are: 1) What are you performing, installing, replacing, and/or repairing? 2)  How is it being performed, installed, replaced, and/or repaired?  3)  What materials, tools, and/or equipment are being used? 4) What will the contractor for the customer say?  What will the scope of work performed be?

Q:  I’ve had my “C-39” (Roofing) license for over 30 years.  About 10 years ago I obtained my “B” (General Building) license.  I slowly over time stopped using my “C-39” classification.  I have always had employees and carried Worker’s Comp however I’m going to be retiring soon and slowing down.  A couple of my employees plan to go work for other contractors, and I’m actually going to certify for a couple of my other employees so they can get their own licenses.  With no employees, I will soon not need Worker’s Comp, but then with my Roofing class I’m not permitted to drop it.  Is there a way to inactivate my “C-39” classification while keeping my General Building license active?

A: There is no way to “inactivate” the “C-39”, however there is an application to remove a classification from a license.  So you can submit that along with an Exemption from Workers Comp and you are good to go!

CSLB Exam Language Translators and Temporary Licenses

Back to the future as we remind an aspiring applicant to ‘just say no,’ until the license is in his pocket! Let me ‘translate’ this because it may be foreign to you, but it’s an English-only contractor’s exam, and another contractor makes an interesting point but his reasoning doesn’t hold ‘water’…

Q:  I recently purchased a painting franchise and I applied for a contractor’s license but haven’t completed the application process yet.  What will happen if I contract without a license?  Is there some sort of temporary license I can be issued while the application is being reviewed?

A:  No, the CSLB does not issue temporary licenses.  As you may already be aware, it is illegal for an unlicensed contractor to contract for work over $500 for labor and materials.  The CSLB has an investigative team that frequently conducts stings and sweeps to apprehend unlicensed contractors and it can result in a misdemeanor, jail time, and fines.  Repeat offenders can face even harsher penalties.

Additionally, contractors performing work without a license have no legal right to enforce contracts, so consumers are not legally required to pay contractors operating illegally. Word to the wise! 

Q:  I am an attorney and I have referred many of my clients to you for licensing needs.  I have a new client from Ecuador and I am in the process of helping him set up his business in California and get a Social Security Number so that he can obtain his license.  Obviously English is not his first language and he is very concerned about the exam. Can the Board Exam be taken in Spanish?

A:  No, unfortunately the exam is only offered in English.  Your client can however bring a translator in to the exam with him.   Keep in mind that the translator must be approved by the CSLB in advance.  He will need to check the box on the license application to request the use of a translator

“D-64”, License Cancellation and Water Jets

Let’s jet! An interesting question will require an additional expert in creating this ‘structure’ change. A sudden loss will prompt a need for change in license status. While it’s not good advice to argue with the law, sometimes it’s a ‘singular’ point to be made…

Q:  If a company water jets a septic/sewage line, is a Contractor’s License required?

A:  As long as there are no alterations or repairs done to the sewer line it is acceptable to hydro jet lines without a Contractor’s license.

Q:  If we want to change from an ‘S’ Corp to a ‘C’ Corp, what would that entail?  Can we keep the same Contractor’s License number?

A:  The CSLB doesn’t concern themselves with whether you are ‘S’ or a ‘C’ corp.  While we do handle corporate registrations with the Secretary of State, we also don’t get involved in whether you are ‘S’ or ‘C’ corp.  It is my understanding that it’s a tax election so each file taxes differently.  The corporation stays intact therefore the Contractor’s License would as well.  From my brief research, you can change your filing status at any time but if you want it effective for a particular year, you must revoke your ‘S’ election by the 15th day of the 3rd month of that tax year.  Not a tax expert, you’ll want to contact a CPA for more information on corporate tax structure. 

Q:  My husband recently passed away and he had an active Contractor’s License.  I’m not even sure when it’s up for renewal but I don’t want to keep paying for it so is there a way to cancel it?

A:  Sorry to hear about your loss.  Yes, there is a license cancellation request form that you can complete.  Since your husband is the only one with signing authority on the license, you would need to sign it and submit with a Death Certificate.  I looked up the license and it expires at the end of this year.  The CSLB doesn’t automatically charge you so you really aren’t paying for anything at this point.  You may decide rather than bother with the cancellation, just let it expire.  I’m sure you have enough on your plate anyway.

Q:  I am an Oregon contractor and I started a business years ago that is highly specialized.  I have called the CSLB several times and I’ve been told I need a “C-8” Concrete license, or a “C-61”/”D-12” (Synthetic Products) license.  I don’t agree with either of those.  I believe the “C-61”/”D64” (Non-Specialized) would be more appropriate.  How do I go about obtaining that license being that it doesn’t really have a “title”?

A: Anytime anyone applies for a “D-64” license, the CSLB requires that they answer four questions: 1.  What are you performing, installing, replacing, and/or repairing? 2.  How is it being performed, installed, replaced, and/or repaired?  3.  What materials, tools, and/or equipment are being used? 4.  What does the contract say you will do for the customer? Or, what is the scope of work to be performed?

Based on the answers to these, the CSLB will determine the appropriate classification and if they determine the “D-64”, they will assign it a “title” specific to the type of work you are doing.

CSLB Public Meetings, Contractor Database and Exam Scheduling

Speak up, it’s your opportunity for input, because contractors have their cards on the ‘table’. Another contractor has gotten the ‘cart before the horse’ so to speak, while a license applicant will have to delay his travel plan until he’s told ‘when’ to get moving…

Q:  Do you know if there is a data table of licensed contractor’s that is available for use for marketing purposes?

A:  The CSLB has a very helpful link on their website where you can see a list of licensed contractors based on zip code, city, or license classification.

Q:  We have two Qualifiers on our license, one for the “A” (General Engineering classification), and one for the “C-10” (Electrical) classification.  Both these Responsible Managing Officers (RMO) switched over to one of our Sister companies in order to obtain the license more expeditiously.  Now we have a deadline to replace them on our license of 10/10/xx.  We have employees in mind, but while we are going through the selection process, is there any way to get an extension on that deadline?

A:  As you are aware, when a Qualifier leaves/disassociates from a license, your company has 90 days to replace them.  The CSLB does allow for a one time 90-day extension, however in order to get that approved, you must have the replacement Application in process.  If you make the request before you have the replacement paperwork submitted, the request will be denied.

Q:  We are an Oregon contractor and we are interested in obtaining a California Contractor License.  The President of the company will be the RMO and he was wondering if it’s possible to get a list of available test dates so he can make a plan as to when he will come to California.

A: The CSLB administers the exams Monday thru Friday so there is no list of test dates.  Once you submit your application, the CSLB will review it and schedule him a test date.  Currently, you will likely be notified of the exam date about 4-6 weeks after your application is submitted and they schedule them about three out.

Q:  I had issues with my Contractor’s License years ago that resulted in my license being revoked.  I’ve been going back and forth with the CSLB ever since trying to get my license re-instated.  It’s been a very frustrating process.  My attorney suggested I contact one of the CSLB Board members directly.  I was curious if the CSLB has regular meetings the public can attend and if so, is there an opportunity for the public to speak?

A:  They sure do.  The CSLB meetings are open to the public (except when specifically noted otherwise).  The meetings have a “public comment session” where you can address the Board.  The next Board meeting is on September 24, 2019 in Chico.  Good luck!  

Referral Fees, General’s Tree Service and Partner Changes

Does every rule have an exception? Yes, it would seem so. Can a General ‘lumberjack’ project land? Like a stick of gum, this last contractor has ‘two, two problems’ in one and learns they have bitten off more than they can chew…

Q:  I’ve always been told that referral fees are a “no-no” for contractors.  I’m confused on why it’s okay for Referral Service Companies to refer contractors to homeowners and collect a fee from the contractor. 

A:  B&P Code Section 7157(d) states that it is illegal for a contractor to accept or allow any compensation from another contractor for home improvement services, however this law does not apply to non-contractors.  It’s important to remember that a referral service cannot solicit or negotiate contracts on behalf of a contractor, or offer to undertake to, or purport to have the capacity to undertake itself or through others a construction project.  The prospective customer should enter into contracts directly with the licensed contractor and all payments should go directly to the contractor.

Q:  My company has an “A” (General Engineering) and “B” (General Building) license.  We frequently remove trees as part of our land clearing in order to prepare for jobs.  We are being told by a sub-contractor we are required to have a “D-49” (Tree Service) license.  It seems to me that would be covered under our “A” and “B”.  Am I incorrect?

A: You are the correct one!  If a project is awarded to an “A” contractor, it is considered a General Engineering project.  An “A” Prime Contractor is licensed to self-perform or sub-contract out all work required to complete that project.  Therefore, if tree removal is required as part of the project, you are licensed to self-perform that work.

Q: We have both a CA and NV license up for renewal next month.  They are General Partnership licenses where the General Partner actually changed about a year and a half ago because it merged in another corporation.  In receiving the renewal notifications, we discovered that we failed to notify the CSLB and the NV Contractor’s Board.  Along with the CA renewal, we received a letter stating the license would be cancelled upon expiration because they obviously discovered the change with the Secretary of State.  Nevada didn’t send any such letter.  In reading the statutes, once we notify the NV Board of the General Partner change, the license will be cancelled immediately.  Is there any option for an extension?

A:  Unfortunately, there is not.  Once you notify the NV Board of a change of Partnership, they do automatically cancel the license.  I would suggest getting the paperwork for a new license submitted as soon as you can so they can hopefully process it before the license expires.  Be aware that when you submit the application, it’s possible (and quite likely) the technician will look up the existing license and notice the change which will cause the cancellation.