Why should you care if a contractor is licensed in San Diego or anywhere in Southern California?  Why does California require licensure in the first place?

The California Contractors’ State License Law requires contractors to be licensed to protect the public from incompetent or dishonest contractors, and to assure that persons holding themselves out as contractors have the skill, character, and legal and business understanding to engage in such work.

The law encourages compliance by subjecting unlicensed contractors to criminal penalties and civil remedies affecting their ability to be paid for unlicensed work. (White v. Cridlebaugh (2009) 178 Cal.App.4th 506.)

Owning your own home is a significant investment and achievement, so be careful in hiring someone to work on it. There are many good contractors, but enough scammers to create genuine legal and financial hurdles for you if the contractor is not licensed.

Homeowners should care whether their contractor is licensed in San Diego or throughout California and verify the license. Ask the contractor for a copy of the license. Visit the Contractors State License Board online to check the status of the license at www.cslb.ca.gov or call the State License Board at (800) 321-2752).

You should also ensure the contractor is licensed for the type of work you wish to hire them to do.  Compare the license with the work it authorizes here.  You should continue to check these items throughout your project. Remember that a contractor must be licensed appropriately at all times while performing the contract.

“What Happens if I thought a Contractor is Licensed in San Diego But They’re Not?”

We are often asked “What happens if I thought a contractor is licensed in San Diego but it turns out they aren’t?” Using an unlicensed contractor exposes you as a homeowner to significant risks.  If the contractor is not licensed you have, in effect, made yourself to be the employer and you are now potentially liable for all injuries suffered on the job, which homeowners’ insurance may not cover.

I Believe Our Contractor is Licensed in San Diego – What Are Some Things I Should Look for?

A contractor may fail to be duly licensed in several ways, not limited to the following:

• Failing to obtain a valid California contractor’s license. A contractor who is properly licensed in Nevada, for example, is an unlicensed contractor for purposes of section 7031 unless a California license is obtained before contracting here.
• Failing to keep the license current. Even a licensed contractor must keep the license current.
• Doing work outside of the license. There are many license classifications, and a contractor must perform only work covered by the license. For example, a contractor licensed only to do drywall is not licensed do electrical or plumbing work.
• Contracting in the name of someone other than the licensee. Only the licensed contractor can use that license. Licenses cannot be borrowed or rented. And if the licensed contractor is a corporation, then the corporation must be the contracting party. A shareholder, officer, director, or employee of the corporation cannot use that license to contract outside of the corporate umbrella. The opposite is also true. If an individual is the licensed contractor, a corporation formed by that individual cannot contract in its own name until the license is properly moved over to the corporate entity.
• Failing to maintain workers’ compensation insurance for employees. Workers’ compensation insurance protects employees who are injured on the job, and some contractors want to avoid that expense. However, California law provides that if a licensed contractor uses employees without having workers’ compensation insurance, his or her license is automatically suspended. As a result, the contractor is not duly licensed at all times during performance of the contract, and is not entitled to be paid for any of the work or materials provided.

California Business and Professions Code section 7031 is a powerful tool that homeowners can wield to address work done by an unlicensed contractor. First, it provides that a contractor who is not duly licensed at all times during performance of the contract cannot sue for payment. Second, it provides that if a homeowner does pay a contractor that is not duly licensed throughout the project, the homeowner can sue to get all of those payments back—that’s right, all of the payments.

Section 7031 is harsh for unlicensed contractors, and courts apply it strictly. There is a very narrow exception where the contractor (1) was duly licensed before the performance of the contract, (2) he or she acted reasonably and in good faith to maintain proper licensure, and (3) he or she acted promptly and in good faith to remedy the failure upon learning of it.

If you are involved in a dispute with a licensed contractor or are concerned about potential liabilities which may have arisen on your work site we invite you to contact the Watkins Firm or call 858-535-1511 to learn more about how to protect your position and your property.