What Is In A Name? It May Not Matter As Much As You Think If You Are An Individually Licensed Contractor

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The Contractor's State License Law (“CSLL”), found at Business and Professions Code sections 7000 et seq., provides a comprehensive licensing scheme that requires all contractors doing business in California to possess a valid contractor's license unless they meet the very narrow statutory exceptions to the licensing requirements. The purpose of the CSLL is to protect the general public from incompetence and dishonesty by those who provide construction services in this state. (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d) The licensing requirements set forth in the CSLL are enforced by the Contractors State License Board (“CSLB”) through disciplinary actions, orders of correction, fines, penalties, license suspension or license revocation. (Business and Profession Code §§ 7011.4, 7090, 7095 and 7099.)

One might ask that if the CSLL regulatory system only applies to licensed contractors, what control does the CSLB or the CSLL have over persons or entities offering contracting services in California without a license? That question is answered by Business and Professions Code sections 7028 and 7031(a). Section 7028 makes it a criminal misdemeanor to engage in the business of or act in the capacity of a contractor without having a valid California contractor's license. Section 7031(a) bars any and all legal actions in California by a party seeking compensation for any construction work or services performed by any person or entity acting in the capacity of a contractor for which a contractor's license is required by the CSLL. Section 7026 of the Business and Professions Code provides a very expansive definition of “contractor” and the work or types of services that makes someone a “contractor” required to be licensed. Simply put, if you perform any construction work that requires a contractor's license in California, you cannot maintain a lawsuit seeking to get paid for the construction work or services you have performed or provided. In addition, if a consumer has paid an unlicensed contractor for construction work, the consumer can recover from the unlicensed contractor any and all sums the consumer paid to that unlicensed contractor for the construction work performed. (Business and Professions Code § 7031(b).)

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Published In: Administrative Agency Updates, Civil Remedies Updates, Construction Updates, Consumer Protection Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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