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.

Roofing, Qualifier Replacement Timing and Business Names

Yes, you can’t have it both ways. Or can you? A contractor is having some ‘separation’ anxiety with his RME, while another’s hopeful ambition to ‘raise the roof’ falls flat…

Q:  We are an out of State contractor who specializes in Boiler installations.  We are applying for a “C-4” (Boiler, Hot Water Heating and Steam Fitting) license.  We are having trouble with our business name.  The CSLB has indicated it’s too “vague” and also “not compatible with our classification”.  Our Head of Marketing wants a name that accommodates both doing work on ethanol plants (boilers, no electricity generation) and photovoltaic plants (electricity generation, no boilers).  Our intention is to get both the “C-4” and the “C-46” (Solar) licenses.  So, the name is our first issue, but our second question is, can one license accommodate for both classifications, or would the “C-46” necessarily mean a separate license application?

A: Business names have been a hot topic with regards to contractors lately.  The CSLB has really been enforcing B&P Code 7059.1 which addresses business names being compatible with the trade they are applying for.  Therefore, “vague” business names, or names that imply you are doing something you aren’t licensed for yet (Solar) will cause them to reject it.  My recommendation would be to come up with a ‘doing business as’ (dba) that is compatible with the initial “C-4” license you are obtaining. Then once issued you apply to add the “C-46” classification and then you can amend the ‘dba’ name to accommodate both classifications.

Because you’ve never been qualified for a Contractor’s license in CA, each classification will require a separate application.  So, you’ll need to wait for the “C-4” license to be issued, and then apply to add the “C-46”.

Q:  Our Qualifying Individual is going to be leaving the company soon.  I understand that the license belongs to the company, not the Qualifier.  Does that mean we automatically retain the license when the Responsible Managing Employee (RME) leaves?  If we do need to put someone in his place, does that person have to take the exam, or does the fact that the company has the license waive that requirement?

A:  You are correct, the license does belong to the company, so yes, the license does stay with the company if your RME leaves.  However, you have 90 days to replace the Qualifier on the license.  If the individual replacing your current Qualifier has never been licensed before, then yes, he/she would be required to take the exams.  In certain circumstances, a Waiver of the exams may be an option.  Please contact me if you’d like further information on this option.

Q:  We are a tile roof supplier and we often have customers who offer to allow us to take their old roof tiles to re-sell them as used if we remove them.  My boss has frequently done this over the years, but someone recently told him he would need a contractor’s license to do this.  The only relevant license I can find is a demo license.  Would this be the appropriate classification of license?

A:  No.  A demolition contractor is designated for contractors who are performing “hard” demolition. Removing roof tiles would be considered “soft” demolition.  Roof removal/tear off companies are required to hold a “C-39” (Roofing) classification license. The catch is your Qualifier (which I would assume would be your boss) needs to document at least four years of experience doing roofing work, which would include roof installations.  He unfortunately would not likely qualify if he’s only done the removal.

Qualifying Individuals & Testing, Replacing Qualifiers and Qualifier Titles

I take a ‘shine’ to our first contractor question. A lesson on adding too much to your ‘official’ title description, and another inquiry holds a reminder on the contractor exam process…

Q:  My company has a “B” license which we use to do Solar contracting.  My employee holds the license, but I want to replace him on the license.  I can’t qualify for a “B” license because I don’t really have General Building experience, only Solar.  How would I go about replacing him but with the “C-46” (Solar) license?

A:  You would be required to add the “C-46” to the license so your company would initially have both classifications.  Once the “C-46” is added, if you want to remove your Qualifier, you would file a Disassociation notice.  At that point, the CSLB will give you 90 days to replace the ‘B’ qualifier, and if no action is taken, the “B” classification will be removed from the license.

Q:  We are going to be applying for a new license and we’ve designated a Qualifying Individual who has his own personal license.  He wants to keep his license (Active) so we understand we need to give him an Officer title and 20% ownership of the new company.  We are in the process of “creating” an Officer title within our company.  We are thinking of something like “Supervisor of Construction Activity”.  Do you see any issue with that?

A:  Yes, in my experience the CSLB does not accept anything but “official” officer titles, which don’t worry, there are many!  Even though “Vice President” is an acceptable title, we’ve seen applications rejected if you add descriptive words to it such as “Vice President of Construction”.  Some examples of acceptable official Officer titles are of course President, Vice President, Secretary, Treasurer, or Director.  Then there is also Assistant Secretary, Assistant Treasurer, etc.

Q:  Your company is going to be helping us with our new license but before we get started, our Responsible Managing Officer (RMO) who lives in Texas had a few questions for you.  Does the person who takes the test have to be the “Qualifying Individual”, or can it be someone else?  Is the test a proctored test at a particular test facility? Is there an online option for the test?  Lastly, if the test must be taken at a qualified test facility, are there any such facilities outside of California, or will he have to fly in for the test?

A:  The person taking the test must be the Qualifying Individual.  The test is a proctored test given at certain facilities and there is no online option.  He/she will need to fly to California to take the test.  The examination sites are located in San Diego, San Bernardino, Norwalk, Oxnard, Oakland, Sacramento, San Jose, and Fresno. CSLB testing staff use Zip Codes to assign applicants to the testing center nearest their business address. Coming from Texas, your Qualifier will likely be scheduled in Norwalk, however that can always be changed if a different location is more convenient. Fingerprinting is also required so plan to get that done while in CA. 

Reciprocity, Oil Fields and RME

We ‘double down’ with our first contractor who has more than one concern. A ‘slick’ answer for an industrial inquiry, with a ‘big easy’ response for a future Californian…

Q:  We currently have a “C-6” (Cabinet, Millwork and Finish Carpentry) license.  We need to add the “C-5” (Framing and Rough Carpentry) classification because one of our clients will be giving us a contract for the erection of a wooden frame.  However, my boss, who is the current “C-6” license holder, doesn’t have four years of experience doing that type of work.  We do have an employee who has done drywall framing for 10 years, who has only been with us for a few years.  What type of role does the employee take on if we were to use him to Qualify the license?  And would this put the license at risk if this employee left in 2 months?

A:  If you use one of your employees who has the experience, you can list them as RME (Responsible Managing Employee).  That would be his role.  RME’s are required to work at least 32 hours a week, or 80% of the company’s operating time.  They are also required to be actively involved in the everyday running of the business.

If he leaves the company, the license has 90 days to replace him.

Q:  I need to know if a Contractor’s license is required for a company that we frequently hire.  We work in the oil field industry and we have a company who comes out and separates hazardous material from the water in the storage tanks and disposes of it. They don’t have a Contractor License do they need one?

A: Yes, a “C-61”/”D09” (Drilling, Blasting, and Oil Field) would be the most appropriate classification for the work that you are describing.

Q:  I am a licensed Contractor in Louisiana and I am planning on retiring and moving to California (I know, most people move out of California when they retire!).  One of my fellow contractor buddies was telling me that Louisiana is “reciprocal” with California and I shouldn’t have to take the exams.  If that’s true, I’m all for getting a license to have just in case small jobs come up.  However, I’m more hesitant if I will have to take the exams because I’m older and haven’t taken a test in years.

A:  Your buddy is correct.  Very recently, California and Louisiana agreed to reciprocity for the “B” (General Building) classification only.  Reciprocity allows you to apply for a waiver of the Trade, however the Law portion of the exam is still required.  The Law portion of the exam tests your knowledge of how to run a business, so if you’ve been running your Contracting business for years (and if you study), you probably won’t have too much difficulty passing the exam.  Good luck and let us know if you would like our help with the process!

Reciprocity, Indemnity Exposure and “A”/”B” Exam Waiver Rule

What the company wants the company gets! Another contractor gets a ‘stranger things’ feeling, while another gets ‘referred’ for a second opinion. A reminder for all contractors on ‘reciprocity’ state by state…

Q:  My company wanted me to ask whether a CSLB licensed Class “A” Engineering Contractor can obtain a classification as a Class “B” General Building Contractor without taking an exam, if the Class A Engineering Contractor has had more than 10 years of experience in design, remodeling, real estate, and general construction?

A:  Thank you for contacting Capitol Services Inc.  You cannot waive an exam based on experience, unless the classification you are adding is closely related to the classification you’ve held for years.  Class “A” and Class “B” are not considered closely related so the Qualifying Individual would be required to take the trade exam for the General Building classification.

Q:  Can a Responsible Managing Employee (RME) own a percentage of the business?  I’m an employee of my company and I submitted an application stating I own 9% of the company and it was rejected.  I received a letter stating that I needed to change my percentage of ownership to zero, which I feel strange doing being that I own 9%, but at the same time, I’m not an Officer.

A:  You may internally have ownership as an employee, but in the CSLB’s “eyes”, an RME does not have any ownership in the company.  So, for your application to be deemed acceptable as an RME, you will need to change your ownership to zero.  

Q:  I had a contracting business for over 30 years and I retired and sold the company to one of my employees.  It’s been over five years since that transaction took place.  Now I’m getting told that I owe money against a judgement because my name and information is on the original bond application paperwork as the indemnitor.  Wouldn’t that have been transferred to the new owner upon purchase of the business?

A:  You would think so, but I’m not so sure that is automatic.  I would suggest contacting the bonding company who issued the original bond for this question.  

Q:  I am a CA contractor and I have a “B” (General Building) and a “C-39” (Roofing) license.  One of my customers moved to Nevada and wants me to re-do his roof.  I read online there is a reciprocal agreement between CA and NV.  Does that mean I’m permitted to go there and replace his roof?

A:  Nevada has a reciprocal agreement with California, Arizona, Louisiana, Alabama, Utah, Connecticut, Florida, Hawaii, New Mexico, North Carolina, South Carolina, Tennessee, and West Virginia.  They also will permit you to apply for reciprocity based on passing the NASCLA exam. However,no, that does not mean that you can utilize your CA license to do work in NV automatically.  

You need to go through the licensing process. The reciprocal agreement allows you to waive the trade exam if you’ve been licensed in one of those States actively for at least 4 years out of the last ten, and that you’ve passed the equivalent exam in that State.  Let me know if you need assistance with the process we primarily assist contractors in CA, NV & AZ. 

License Processing, LLC General Liability and Federal Bids

It’s good to be ‘ahead’ of the curve! A question of ‘liability’, before a ‘two for one’ inquiry. Two other contractors get an answer and a solution as we assist contractors every day…

Q: My license will expire in about 9 months or so.  I wanted to ask if you have any suggestions about how to make the renewal process go smoothly or have any thoughts on the matter?

A:  That’s certainly thinking ahead!  Most of the time I’m contacted a couple days before someone’s license expires asking for advice.  The CSLB will send you the renewal approximately 60 days before the expiration.  Both you (as the RME) and the officer listed on the license will be required to sign.  I would recommend sending it in soon after you receive it because it takes the CSLB usually several weeks to process.

Q:  We have a client interest in forming a Limited Liability Company (LLC) to perform general contracting services.  Does your company provide Agent for Service of process services?  Also, do you know if the $1,000,000 liability insurance requirements of the CSLB is for general liability insurance or professional liability insurance?

A:  Yes, we do offer Agent for Service of process.  The liability insurance requirement for LLC’s is $1 million in General liability coverage.

Q:  With my “B” (General Building) License, can I contract for structural metal framing? (not light gauge framing which is covered under the “C-9”).  Secondly, my friend who is a “C-35” (Lathe and Plaster) contractor believes that he can contract for structural metal framing with his license.  Is he correct?

A:  To answer your first question, yes, you can do all types of framing and carpentry with your “B” license.  However, it is not appropriate for a “C-35” (Lathing and Plastering) classification contractor to perform any metal framing. They can install lath, which the plastering materials adhere to, but not metal or wood framing. A “C-35” contractor can install metal studs that are used to install or support the lathing and/or solid plaster partitions.

Q:  Is a Nevada State Contractor’s license required for performing work on a Federal Government project in Nevada?

A:   The Nevada State Contractor’s Board doesn’t have jurisdiction over Federal projects.  You would need to contact the person(s) where the bids are submitted to determine what they require. 

Q:  I am starting a new Construction company that will be an LLC.  I only have three years of qualifying experience however my partner does have the experience so he will Qualify the license.  Is there a way for me to be put on the Contractor’s License application and be able to test with him?  Or does he just get the license and then add me later when I gain the necessary experience?

A: No, without the requisite four years of experience, you will not qualify to take the exams.  However, you can be on the license as a “member” or “manager” of the LLC.  While there is only one Qualifier per classification, you can have as many Members/Managers/Officers as you’d like on the license.  Once you gain the experience, you can apply to replace your partner on the license