In the State of California, operating as an unlicensed contractor and hiring an unlicensed contractor is illegal, and both parties can be held liable in certain situations, so they will have to deal with the law.
If you are considering construction work on your home, it is essential to verify that the contractor is currently licensed.
This is a legal issue with several regulations and standards, so it is easier to consult with an attorney specializing in the matter. At Kannan Law, we are at your disposal to ensure you comply with the law.
In the State of California, a contractor is considered the same as a builder and is who performs the following activities: construction, alterations, repairs, additions or subtractions, improvements, moving, disaster restoration, and demolition (buildings, excavations, and others).
In this State, Business and Professions Code 7028 BP establishes that anyone who acts as a contractor without a license from the Contractors State License Board (CSLB); or is operating as a contractor with a suspended license for failure to pay a civil penalty; or fails to comply with a correction order, is committing a crime.
Some examples of work commonly performed under the guise of an unlicensed contractor include:
- A person who agrees to work on a neighbor’s house without a license.
- The owner of a contracting company who signs new contracts despite a suspended license.
- Someone who starts a business without a contractor’s license and signs a contract to build something.
The law is extremely specific and requires contractors, developers, master builders, and subcontractors to be licensed in order to work on buildings, whether commercial or residential.
These licenses are issued by the State Contractors Board and are the way to ensure that those performing the work have the necessary training and knowledge.
If not, the building where an unlicensed contractor worked could have construction defects and cause injuries to residents.
It is important to note that if anyone is injured as a result of the work of an unlicensed contractor, that contractor is not liable for any damages.
When is a licensed contractor not required?
Jobs costing less than $500 in materials and labor do not require a licensed contractor; however, it is in the homeowner’s best interest to hire a licensed contractor, regardless of the price of the work to be performed.
Additionally, any construction, improvements, repairs, and alterations made to personal property, such as computers and televisions, do not require a licensed contractor.
The law also does not cover the installation of finished products, materials, or merchandise that are not part of the permanent home. This is why cabinet or flooring suppliers do not need a license, but installers do.
How to avoid hiring an unlicensed contractor?
Before hiring a contractor to perform work, we suggest the following:
- Ask to see proof of insurance and licensing before hiring.
- Do a search for their name with the State Licensing Board (CSLB).
- Also, check their employment history.
- Avoid paying everything in cash to avoid future disputes.
Remember that our legal team is at your disposal to assist you throughout this process.
California state authorities often conduct operations to capture unlicensed contractors. For example, they conduct bids for construction or maintenance work, which is an operation to arrest anyone who is unlicensed or requests amounts greater than $500.
If you are an unlicensed contractor and are caught, you will likely be charged with BP 7028. However, you can challenge the charge by presenting a legal defense. If done correctly, a good defense can often reduce or dismiss a charge, and the best way to do this is by hiring a criminal defense attorney.
Some of the most common defenses used for BP 7028 charges are: not being a contractor; small-job exemption; the person is an employee.
Regarding possible penalties, in a misdemeanor case, they are: imprisonment in the county jail for up to six months; or a $5,000 fine. Repeat offenders are subject to larger fines and additional prison time.
Additionally, felony charges could arise if the contractor is caught using another person’s license when bidding or performing work. This person could also face additional charges of identity theft if the contractor has been using another person’s license without the other person’s knowledge.
It’s important to note that if a contractor doesn’t obtain a license, the contractor may not be able to collect the money owed. In other words, if you hired an unlicensed person, you are not obligated to pay them, and they will be powerless to do anything about it. Furthermore, the homeowner has the right to sue for some or all of the payments made.
Are homeowners blameless?
Hiring an unlicensed contractor may be cheaper than a licensed contractor, but be careful! Doing so could also have legal consequences for you.
Since unlicensed contractors cannot obtain legal permits to perform certain types of work, your home could lose value later if you try to sell it, as you need to disclose this information to potential buyers. If you fail to disclose this information, you could be held liable if the illegally performed work later fails to meet code requirements.
However, the biggest risk is liability, which is something unlicensed contractors do not have. If they are injured on the job, the homeowner has to assume responsibility for the damages since there would be no liability insurance to rely on.
Another major complication in these types of cases is when non-citizens are involved. While these violations typically do not result in inadmissibility or deportation from the US, often the judge, as part of sentencing, may require the client to be admitted to a local jail for a process known as “booking and release.” This could frighten undocumented clients, fearing that their presence in a criminal jail could alert immigration authorities to their illegal status in the United States.
Ultimately, cases involving hiring an unlicensed contractor are extremely complex and warrant the assistance of a team of Kannan Law attorneys with proven legal experience to assist you at all times and help you obtain the best possible resolution.
Frequently Asked Questions
Is it illegal to hire an unlicensed contractor in California?
Yes, in California, any job costing more than $500 in labor and materials requires the contractor to have a valid license issued by the California State Contractors’ License Board (CSLB).
What are the risks of hiring an unlicensed contractor?
Hiring an unlicensed contractor can result in substandard work, lack of warranties, legal issues, and possible fines. Additionally, the property owner may be liable for workplace injuries.
Can I sue an unlicensed contractor if they do poor work?
Although you can sue them, unlicensed contractors have fewer legal protections and may not have insurance or assets to cover damages. Additionally, in some cases, they may attempt to sue the property owner to get paid for their job.
What penalties does an unlicensed contractor face in California?
An unlicensed contractor can face fines of up to $15,000, criminal charges, and the inability to collect payment for their work in a civil lawsuit.
How can I verify if a contractor is licensed in California?
You can check a contractor’s license status through the CSLB website (www.cslb.ca.gov) by entering the contractor’s name or license number.