Locations Throughout
California

Beware of Unlicensed California Contractors: Rights & Liabilities

Beware of Unlicensed California Contractors:  Rights & Liabilities

A Contractors State License Board (CSLB) sting operation conducted in San Clemente highlights the risks consumers face if they hire unlicensed contractors for home or business improvement projects. CSLBA’s Statewide Investigative Fraud Team (SWIFT) partnered with Orange County District Attorney’s investigators and Sheriff’s Department investigators for the operation conducted October 29 and 30, 2009.

SWIFT Enforcement Representatives posed as owners of a commercial suite and warehouse in an effort to catch unlicensed, uninsured suspects who submitted bids greater than $500 for construction projects. California Business & Professions (B&P) Code requires that any job valued at $500 or more for labor and materials be done by a company licensed by the state. Suspects bid on projects such as tiling and painting.

SWIFT investigators targeted those who advertised their construction services online or in local publications.

Always Ask for the Contractor’s State License Number

California law requires that all advertisements include a valid state contractor license number or that they are not licensed. Those not licensed by CSLB may only do projects valued at less than $500 (Labor & Materials). Those nabbed in prior stings were also invited to the sting location.

Suspects were issued a Notice to Appear (NTA) at the Orange County Superior Court’s Central Justice Center in Santa Ana on December 15, 2009 to answer misdemeanor charges of contracting without a license and advertising violations. During the two-day sting, 14 NTAs were issued. A 15th person was issued an NTA for allowing another person to fraudulently use his CSLB license number.

“You never know who you might be letting into your home if you contract with someone that isn’t licensed,” said CSLB Registrar Steve Sands. “Since 2005, CSLB has conducted background checks on all new applicants, and those adding classifications to their licenses. Those with offenses substantially related to contracting are not granted licenses. Consumers should always ask to see the contractor’s CSLB license and a photo ID to verify that it’s that person.”

CSLB uses stings to educate unlicensed contractors on how they can come into compliance with the law, once they´ve paid their fine for contracting without a license. DA investigators used this operation as an opportunity to let them know they could face additional charges in the future if they do not carry workers’ compensation insurance for their employees. Licensees are also required to have workers’ compensation coverage for all employees, and for themselves if they are C-39 roofing contractors, to ensure homeowners will not be responsible for a work injury should it occur on their property.

“Consumers might think they’re saving money by hiring the unlicensed, uninsured person who offers a low bid,” said CSLB Registrar Steve Sands. “But, if somebody is hurt while working on the project and doesn’t have workers’ compensation insurance, the homeowner could be held liable for any medical expenses, which would undoubtedly prove much more costly.”

CSLB Urges Consumers to Remember the Following Tips when Hiring a Contractor:

  • Be especially hesitant when approached by someone offering home improvement services door-to-door.
  • Verify the contractor’s license by checking online at www.cslb.ca.gov, or via CSLB’s automated phone system at 1-800-321-CSLB (2752).
  • Don’t pay more than 10% down or $1,000, whichever is less. There is an exception made for about two dozen licensees who carry special coverage to ensure consumer protection and may ask for more than a ten percent down payment. Those exceptions are noted on the CSLB Web site.
  • Don’t pay in cash, and don’t let the payments get ahead of the work.
  • Check references, and get at least three bids and a written contract.
  • Contact CSLB if you have a complaint against a contractor.

How to Check the Contractor’s State License Number

CSLB offers helpful consumer publications that can be downloaded at www.cslb.ca.govor www.CheckTheLicenseFirst.com, or ordered by calling, toll-free:1-800-321-CSLB (2752).

In 2009, CSLB, which operates under the umbrella of the Department of Consumer Affairs, marks its 80th anniversary of protecting consumers by regulating California’s construction industry. Today, CSLB licenses about 315,000 contractors. In any given year, complaints are filed against only 3% of licensed contractors. In fiscal year 2008-09, CSLB helped consumers recover nearly $36 million in ordered restitution.

The Peck Law Group

About the Author

Attorney Steven Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.


Free Case Evaluation

*Please do not include any confidential or sensitive information in this form. This form sends information by non-encrypted e-mail which is not secure. Submitting this form does not create an attorney-client relationship. For more information, please read our Privacy Policy.


Bar Memberships and Affiliations

The Peck Law Group stays up to date and in touch with the legal community through various memberships and affiliations.