Tag Archives: Contracting

CSLB Bulletin: CSLB and Partners Sting 15 for Contracting Without Licenses

CSLB and Partners Sting 15 for Contracting Without Licenses

 SACRAMENTO — The Contractors State License Board (CSLB) teamed up with the Orange County District Attorney’s Office and La Habra Police Department for a two-day sting operation in La Habra where 15 individuals received notices to appear in court for contracting without a license and other, related charges.

On June 29-30, 2011, members of CSLB’s Statewide Investigative Fraud Team (SWIFT) posed as owners of a home (June 29) and a business (June 30) and sought bids from suspected unlicensed operators for painting, concrete, drywall, cabinet installation, and flooring. Those who bid more than the legal threshold of $500 for labor and materials received notices to appear in court for violating California contracting laws.

Some of the suspects will also face charges for failure to carry workers’ compensation insurance, soliciting an excessive down payment, and illegal advertising. State law requires contractors to have workers’ compensation coverage for all employees. Contractors are also prohibited from soliciting a down payment larger than $1,000 or 10 percent of the project, whichever is less. There is an exception for about two dozen contractors who purchase special bonds for consumer protection and may ask for larger down payments. The law also requires contractors to put their license number in all advertisements. Those who are not state-licensed and work on projects valued at less than $500 must state that they are not licensed in their ads.

The first suspect caught contracting without a license was on parole for drug crimes. During the second day of the operation a licensed contractor arrived at the commercial building. He thanked CSLB for conducting the sting and for other enforcement efforts aimed at unlicensed, uninsured individuals who he says are cutting into his business.

“CSLB routinely conducts operations like this one in La Habra as part of its mission to protect the state’s consumers and the integrity of the construction industry,” said CSLB Registrar Steve Sands. “Many of the complaints received by the board after a project has gone awry could have been avoided had homeowners taken a few minutes to check the license first, and followed CSLB’s Ten Tips available in English and several other languages.”

THE CONTRACTORS STATE LICENSE BOARD (CSLB) ZERO-TOLERANCE ENFORCEMENT POLICY IN 2010 AND NOW ISSUES LEGAL ACTION AGAINST ANY C-10 ELECTRICAL CONTRACTOR WHO WILLFULLY EMPLOYS AN UNCERTIFIED ELECTRICIAN TO PERFORM WORK AS AN ELECTRICIAN

 

CSLB Announces Zero Tolerance Enforcement Policy for C-10 Electrical Contractors. 

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SACRAMENTO – The Contractors State License Board (CSLB) established a zero-tolerance enforcement policy in 2010 and now issues legal action against any C-10 Electrical contractor who willfully employs an uncertified electrician to perform work as an electrician. CSLB is legally required to open an investigation and initiate disciplinary action against the contractor (which may include license suspension or revocation) within 60 days of receipt of a referral or complaint from the Department of Industrial Relations’ Division of Apprenticeship Standards (DAS).

Labor Code Section 3099.2 stipulates that anyone who performs work as an electrician for C-10 Electrical contractors shall hold an electrical certification card issued by DAS; DAS is required by Labor Code Section 3099.2 to report violations to CSLB.

Electricians are defined as those who engage in the connection of electrical devices for C-10 contractors. It is CSLB’s position that electrical work must be performed by either a state-licensed or a certified electrician. An indentured apprentice or state-registered electrician trainee may also perform electrical work if supervised by a state-certified electrician. Trenching, concrete, framing, and other work that does not involve connecting electrical devices may be performed by noncertified workers.

Learn more about electrician certification by visiting the Division of Apprenticeship Standards website

Contact a CSLS School Administrator to assist in purusing your C-10 License today! www.MakeMeAContractor.com

Avoid the Pinch…CSLB Fee Increase coming soon!

CSLB Fee Increase avoid it with a Contractors License now

July is steadily approaching which means fee increases from the CSLB for a Contractors License associated fees is also approaching sooner than you think. Start now in a qualified Contractors Licensing program such as the In School Law & Trade program with CSLS and avoid the pinch.  Details from the CSLB outlined to give you an idea of how enrolling now can save you from the big pinch.

Office of Administrative Law Approves CSLB Fee Increase

New fee schedule begins July 1, 2011

SACRAMENTO – Contractors State License Board (CSLB) application, licensing and registration fees transition to a new schedule on July 1, 2011, following action taken by the state Office of Administrative Law (OAL) in 2010. CSLB fees had remained the same since 1993. OAL approved increases that would represent the statutory maximum that was set by the Legislature in 2002 in response to the Enforcement Monitor report that called for increased resources for CSLB’s enforcement program.  The increase will help assure that CSLB is able to uphold its mandated protection of California consumers and the integrity of the construction industry.

 
Fee Current Amount New Amount  Increase % Increase
Application for Original Contractor License $250.00 $300.00 $50.00 20%
Application to Add a Supplemental Classification or to Replace the Responsible Managing Officer or Employee on an Existing License $50.00 $75.00 $25.00 50%
Rescheduling an Examination $50.00 $60.00 $10.00 20%
Initial License Fee $150.00 $180.00 $30.00 20%
Renewal – Contractor License (Biennial) $300.00 $360.00 $60.00 20%
Renewal – 4-Year Inactive License $150.00 $180.00 $30.00 20%
Reactivate Contractor License $300.00 $360.00 $60.00 20%
Home Improvement Salesperson (HIS) Registration Fee $50.00 $75.00 $25.00 50%
Asbestos Certification Fee $50.00 $75.00 $25.00 50%
Hazardous Substance Removal Certificate $50.00 $75.00 $25.00 50%
Delinquent Renewal – Contactor License /1 $150.00 $180.00 $30.00 20%
Delinquent Renewal – 4-Year Inactive License /1 $75.00 $90.00 $15.00 20%
Delinquent Renewal – HIS Registration /1 $25.00 $37.50 $12.50 50%

/1 Delinquent renewal fees are not included in the proposed regulation because B&P Code Section 7137 (f) sets the delinquency fee as a percentage of the applicable renewal fee: “The delinquency fee is an amount equal to 50 percent of the renewal fee, if the license is renewed after its expiration.”

Statewide sting nets 19 suspected unlicensed contractors in San Diego County

By Tanya Mannes/www.signonsandiego.com
Wednesday, March 16, 2011

Nineteen contractors in San Diego County were among 135 arrested last week during a statewide undercover operation seeking to identify people working without proper licensing.

The Contractors State License Board conducted the operation to spotlight the severe risks California consumers take when they hire unlicensed operators to work in and around their home.

Consumers often don’t realize the risk they run when hiring someone who is not licensed. Because these phony contractors don’t carry workers’ compensation insurance, the homeowner could be liable if a worker is hurt on the job. Also, if something goes wrong or the project is abandoned, homeowners have few options for getting back their money.

“Consumers must check out the people they’re going to hire to work on their home to make sure they’re properly licensed,” said CSLB Registrar Steve Sands. “A family’s safety or finances could be jeopardized by not taking a few minutes to verify the contractor on CSLB’s website or through our toll-free phone system. We hope this blitz is a wake-up call for consumers to check the license first.”

To verify licensing, visit www.cslb.ca.gov or call 1-800-321-CSLB.

Of those arrested statewide, some were registered sex offenders and others had warrants for arrest on suspicion of burglary, domestic violence or driving under the influence. (None of those cases were in San Diego County.)

The San Diego County operation received support from the District Attorney’s Office, the Sheriff’s Department and the California Department of Insurance.

Investigators from CSLB’s Statewide Investigative Fraud Team posed as homeowners or landlords, asking for bids on projects that ranged from landscaping, concrete and fencing to painting, gutters, garage doors, cabinets, tile work and tree trimming. Those who bid more than the legal limit of $500 for labor and materials received a notice to appear in Superior Court on suspicion of a misdemeanor charge of contracting without a license.

Other charges included illegal advertising and soliciting excessive down payments.

Important CSLB Bulletin: Contractors State License Board Encourages Vigilance as Winter Storms Hit State

SACRAMENTO — In the wake of heavy rain, mudslides, flooding and their aftermath, the Contractors State License Board (CSLB) reminds California property owners to stay vigilant when it comes to contracting for clean-up or repairs. Sometimes what appears to be the cheapest solution to remove a fallen tree, fix a downed fence, or patch a leaky roof may not be the wisest choice.

Consumers can use CSLB™s online resources to check the license status of the contractor they plan to hire, and to get tips on home repair and improvement choices. Any construction job valued at $500 or more in labor and materials must be done by a state-licensed contractor. California Business & Professions Code requires all licensees to carry workers compensation insurance coverage for their employees and to purchase a contractor license bond.

Now that Governor Schwarzenegger has declared a State of Emergency in several coastal, Central Valley, and Southern California counties, anyone caught contracting without a California contractor license can potentially be charged with a felony and subject to up to $10,000 in fines and three years in state prison (Business and Professions Code section 7028.16). In areas that are not state or federally-declared disaster areas, penalties are generally misdemeanors.

“A state-licensed contractor is the right choice when looking for a legitimate, qualified home repairperson”especially in an urgent situation,” said CSLB Registrar Steve Sands. “A CSLB-licensed contractor who is skilled in the specific trade you are seeking is not likely to leave you in the lurch when it comes to properly completing the job at a fair price.”

For tree trimming and removal jobs where the tree is 15 feet or higher and the job is more than $500, the contractor must be state-licensed. Business & Professions Code allows a gardener to do incidental pruning on trees less than 15 feet and under a cost of $500 without a CSLB license.

CSLB urges consumers to follow these tips when soliciting bids from a home improvement contractor:

• Hire only licensed contractors, and ask to see the license and photo identification to make sure the person is who they claim to be.
• Dont rush into repairs, no matter how badly they are needed.

Understanding the Contractor’s License Bond


In California, anyone who contracts to perform work that is valued at $500 or more for labor and materials must hold a current, valid license from the Contractors State License Board (hereinafter “CSLB”) and must carry a Contractor’s License Bond. Surety bonds are commonly used for this purpose, but cash or certificates of deposit may also be posted. All Contractor License Bonds must be implemented by an authorized surety company, in a manner up to the required standard of the CSLB and suitable to the State of California. Currently the CSLB requires that contractor’s bonds be in the sum of twelve thousand five hundred dollars ($12,500). At their discretion, the Board may require an applicant to carry a higher bond amount or separate bonds for contractors who have been disciplined, and the amounts of these bonds vary. The bond amount is not per job. It is the amount available for all jobs a contractor takes on during the life of the bond.

A surety bond is a contract in which a surety company promises the State of California that the contractor will comply with the Contractors’ State License Law. Generally speaking, a licensed contractor is obligated not to commit any violations of the Contractors’ State License Law. The law describes and identifies specific violations that the bond will cover and violations can result in disciplinary action against the licensed contractor. California Business and Professions Code § 7071.15 provides that failure to maintain a sufficient bond can result in a minimum penalty of suspension ranging from 60 days up to 1 year probation, and a maximum penalty of revocation. Additionally, if warranted the CSLB can impose an actual suspension of the license for 5 days or more, require contractors to retake the CSLB law and business examination if not taken within the past 5 years, impose educational course requirements, or require payment of CSLB investigation and enforcements costs.

If the contractor does not comply with the conditions of the bond, a consumer, supplier or an employee can file a claim against the bond. California Business and Professions Code § 7071.5 provides that the contractor’s bond shall be for the benefit of the following:
(a) A homeowner contracting for home improvement upon the homeowner’s personal family residence damaged as a result of a violation of this chapter by the licensee.
(b) A property owner contracting for the construction of a single-family dwelling who is damaged as a result of a violation of this chapter by the licensee. That property owner shall only recover under this subdivision if the single-family dwelling is not intended for sale or offered for sale at the time the damages were incurred.
(c) A person damaged as a result of a willful and deliberate violation of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract.
(d) An employee of the licensee damaged by the licensee’s failure to pay wages.
(e) A person or entity, including an express trust fund described in Section 3111 of the Civil Code, to whom a portion of the compensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, damaged as the result of the licensee’s failure to pay fringe benefits for its employees, including, but not limited to, employer payments described in Section 1773.1 of the Labor Code and regulations thereunder (without regard to whether the work was performed on a private or public work). Damage to an express trust fund is limited to actual employer payments required to be made on behalf of employees of the licensee, as part of the overall compensation of those employees, which the licensee fails to pay.

General requirements for bonds include the following:
•Bonds are NOT transferable – do not attempt to transfer a bond from
one license to another or from one qualifying individual to another;
•The business name and license number on the bond must correspond EXACTLY to the information in the records of the CSLB
•The license number on the bond of a qualifying individual must match that of the firm for whom the individual is to serve as the qualifying individual;
•Contractors bonds must be in the correct amount of $12,500;
•A bond of a qualifying individual must be in the correct amount of $12,500;
•The bond must have the signature of the attorney-in-fact ; and
•Bonds must be filed with the CSLB within 90 days of the effective date of the bond.

To avoid problems with the bonds filed for your license and to maintain your bonds, the following guidelines are helpful:
•Keep your required bonds, cash deposits, or bond exemptions current at all times;
•Renew your bonds promptly. Make sure that the effective date of a new bond is the same as the cancellation date of the old bond and allow for processing time;
•Only one bond is effective at any time. A second bond filed for the same period will cancel out the first bond;
•CSLB does not return any bond that has been accepted or processed for an active license; and
•Keep accurate records on your agent, surety company, bond numbers, effective dates, and terms of the bonds.

If a contractor receives notice from their surety company that a claim has been filed against his/her bond, the contractor should immediately contact the surety company to respond to the claim and explain his/her position. The contractor should also submit all documentation relevant to the claim. If a complaint is filed with the CSLB, the contractor should also respond immediately and provide the CSLB all of the requested information and documentation throughout the course of the investigation. Complaints filed with the CSLB and with surety companies are taken very seriously and a contractor’s cooperation is critical to a successful resolution.
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1. See California Business and Professions Code § 7071.6.
2. The term attorney-in-fact is commonly used in the United States, to make a distinction from the term Attorney at law. An attorney-at-law in the United States is a lawyer—someone licensed to practice law in a particular jurisdiction. As an agent, an attorney-in-fact is a fiduciary for the principal, so the law requires an attorney-in-fact to be completely honest with and loyal to the principal in their dealings with each other. See Wikipedia @ http://en.wikipedia.org/wiki/Power_of_attorney .