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CSLS Construction Connection

Contractors State License Services is committed to your continued growth and education of your career as a licensed contractor. It is our intention to provide you with valuable information of what's new in the construction industry, important events that you may want to attend, and helpful business and exam preparation tips. You can also stay connected with CSLS through Facebook, Twitter, Linked in and You Tube.

IN THIS ISSUE
DECEMBER 2010

• UNDERSTANDING BONDS
• INSTRUCTOR'S CORNER
• ADVERTISING 101
• CSLS HONORS VICTOR PEREZ WITH A SCHOLARSHIP
• IPAD CONTEST WINNER

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 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.
• A property owner contracting for the construction of a single-family dwelling who is damaged asa 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.

• 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.

• An employee of the licensee damaged by the licensee's failure to pay wages.
• 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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Looking for a Marketing Winner: Advertising 101...
Learn the Basics About Advertising
Advertising is a form of communication intended to persuade an audience (viewers, readers or listeners) to purchase or take some action upon products, ideals, or services. It includes the name of a product or service and how that product or service could benefit the consumer, to persuade a target market to purchase or to consume that particular brand. Commercial advertisers often seek to generate increased consumption of their products or services through branding, which involves the repetition of an image or product name in an effort to associaterelated qualities with the brand in the minds of consumers.

Most contractors know that they must include their license number on all advertising. But do you know what that really means and what the laws really say? Business and Professions (B&P) Code Section 7030.5 states that all licensed contractors are required to include their license number in "(a) all construction contracts; (b) subcontracts and calls for bid; and (c) all forms of advertising, as prescribed by the registrar of contractors." The Code further provides that failure to comply with this requirement can result in a fine between $100 and $1,000 for a first offense.

The following tips for advertising will not only help you comply with the law, but will also help you plan your marketing strategies for success as a licensed contractor.

1. Include your Contractors license number in anything that might be considered as advertising. Examples include: newspapers, radio, television ads, your business card, any contract proposal, lettering on every one of your commercially registered vehicles (See B&P Sections 7029.5 and 7029.6), signs or billboards identifying your company as a contractor, your company's website, any soliciting brochures or pamphlets, any clothing or promotional items that include your company name and logo; and any directory listing that states or implies you are looking for work or services which would require a contractor's license.

2. Don't use false or misleading advertising, or advertise a price that you don't intend to honor. B&P Section 7161 makes it a misdemeanor "for any person to ....[use] false, misleading, or deceptive advertising as an inducement to enter into any contract for a work of improvement, including, but not limited to, any home improvement contract, whereby any member of the public may be misled or injured."

3. Don't advertise to do work that you are not licensed to perform. Contractors who advertise to do work beyond the scope of their license are subject to a fine of not less than $700 and not more than $1,000, plus any other punishment established by the Registrar of Contractors or a court. Such offenses are deemed misdemeanors according to B&P Section 7027.1.

4. When advertising about asbestos removal services, be sure to include your asbestos certification and registration numbers along with your business name. Contractors must list their asbestos certification number issued by the Board and the registration number required under Labor Code Section 65015.5. The Registrar will issue a notice to comply if either of these numbers are omitted. If a contractor fails to comply after receiving notice, a citation will be issued as well as potential fines ranging from $100 to $1,500.

5. Don't advertise about bonding. Contractors are prohibited from including any reference to the contractor being "bonded" in any advertisement, or on any company "paperwork" that could reasonably be considered "advertising", if the bond being referred to is the standard license bond that all California Licensed Contractors must have. B&P Section 7071.13 provides that any such references or presentments are grounds for discipline and/or suspension of the contractor's license.

6. Be VERY careful when advertising as "insured". CA licensed contractors cannot advertise that they are "insured" unless they state what type of insurance it is. Any reference to "insured" in your company‘s advertising must specifically state the type of insurance you are referencing. Failure to properly identify the type of insurance in the advertisement is cause for discipline pursuant to B & P Section 7027.4. If for example you want to advertise that you carry both commercial general liability insurance and worker's compensation insurance, then it should be stated as such, "We carry Commercial General Liability and Worker's Compensation Insurance."

Knowing the law can help keep you out of trouble with the CA State Contractors Licensing Board and prevent legal problems that can arise from mistakes.

##1 See Wikipedia @ http://en.wikipedia.org/wiki/Advertising . A misdemeanor is a crime punishable by imprisonment in a county or city jail or detention facility not to exceed one year. Except where the law specifies a different punishment, a misdemeanor is punishable by imprisonment in a county jail not exceeding six months and/or a fine not exceeding one thousand dollars. See California Penal Code Section 19.

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Contractors State License Services Honors Victor Perez with a Scholarship
Contractors State License Services (CSLS) granted a full scholarship to local Fresno California, hero Victor Perez, an unemployed Contractor in the hopes to build a brighter future for a Good Samaritan and hero. Victor Perez, the Fresno Construction worker put his life on the line to save an abducted 8-year-old girl last week. Victor's heroics and daring rescue has touched the heart of not only local residents to Fresno California but also the President and CEO of Contractors State License Services, also known as MakeMeAContractor.com, David Mizener.

David Mizener, CSLS' President & CEO, learned about Victor's compelling story and that he lacked a California Contractors License through the Media. "After hearing Victor's story and the request of Governor Schwarzenegger that someone give Victor a job. "I knew we could do more than simply give him a job, we could help him build a future and a business that would ultimately help him provide for his family," said David Mizener.

The Contractors Scholarship valued at over $1,500 provides full enrollment to Contractors State License Services In-School Law and Trade program which is designed to assist Contractors in passing the California Contractors License Exam. "Our 98% pass rate will provide Victor with a sense of peace knowing that he will pass the first time he sits for the Contractor's License Exam. In fact, we have helped over 120,000 Contractors just like Victor to gain their Contractors License," states Maureen Esses, License Advisor. CSLS classes offer live instruction taught by qualified and experienced instructors. The classroom setting allows for individual attention and the opportunity for classroom discussion and immediate response to questions our students may have. Program content is relevant to day-in, day-out Contractor practice and the California Contractors State License Examination such as Contractors Business Law.

Additionally, Contractors State License Services Contractors Scholarship will also cover all the State required fees associated with gaining a Contractor's License such as the California State Contractors License Application Fee, Contractor's License Fee, as well as, additional Contractor fees for requirements such as Contractor Bonding fees. "We are happy to assist such a great man with the additional cost of earning a Contractor's License. The Contractors Bonding requirement of $12,500 will be covered by CSLS as well", states David Mizener, CSLS President & CEO. "That's unbelievable," Perez said. "To become a contractor would be a dream come true."

Victor plans to pursue the General Building (General B) Contractors License and to attend CSLS's Fresno School Locations live class room 4 week program. The Fresno school location is one of 25 School locations throughout California for Contractors State License Services along with the Live Online programs nationwide and Home Study programs. "We are excited to assist Victor reach his goal of becoming a Licensed Contractor. We applaud Victor's first steps to building a brighter future and look forward to helping him achieve his goals", says Mary Birch District Manager.

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CSLS iPad Contest Winner Awarded New iPad

Helping to build futures, today CSLS awarded student Karl Menjivar a New iPad. CSLS iPad contest ran throughout the month of October resulting in one very lucky winner. "I am so excited", said Karl. "I didn't expect to win." Karl is pursuing his C-10 Electrical Contractors License. We wish Karl the best and congratulate him on his win!
Looking for how you too can leverage an iPad for your Construction business? Take a look at the top 5 ways an Apple iPad can help your Construction business save time, earn more clients, and simply make your professional life easier.

Top 5 Ways an Ipad can Help Your Contractor Business
1. In the field sketching / note-taking: Sketching out plans, dimensions and equations on the fly is an integral part of the construction process. For this, the iPad opens up a whole new world of possibilities for accuracy, convenience and organization. This tablet can make sketching a plan out as easy as touching the screen and drawing with your finger. Need a calculator? Flip on over to the calculator application. Need to jot a few notes? Flip on over to the notepad application. Then, when you are done - just click save, and move on with your day. There will most likely be tons of applications that you can download that might make the process even easier.
2. Contract reference: The iPad allows you to store and view your most important documents where you can reference contracts, accounts payable, receivables, as well as popular books. Need a on the job reference guide check out the ibooks option.
3. Portable credentials: How many times have you been bidding on a job and been asked to show some credentials? The iPad could easily turn into your on-the-road filing cabinet. Keep important documents like your certificate of liability, Contractors bond, Contractors license(s), worker's comp - basically anything that you might need when out in the field or bidding on a project, all in one spot.
4. Mobile Professional Portfolio: Nowadays, people want proof of how good you are. They want to see photos, videos, maybe even testimonials of past customers. What better way to showcase yourself than with your iPad? Show customers slideshows of your work, your website, videos ... get creative! Apple is renowned for it's products' abilities to create cool looking presentations, so take advantage of it and get some more jobs!
5. Digital blueprints: Many contractors have gotten into the habit of bringing their laptops on the job to reference digital blueprints and plans. Well laptops, the iPad has just one-upped you. Already with Apple's smaller touch interfaces, you can zoom in to minute details, rotate images, even edit on the spot - all with your fingers. And it's fast! We can only imagine the cool new ways that a larger screen will allow you to interact with and share your plans on the job site. Paper is indeed a thing of the past.
View more on our website at http://www.contractorslicensingschools.com/contractor-industry-news.cfm(List adapted from Center Networks, by Johnnie Munger)