It is a surprisingly common occurrence in California: a homeowner hires a contractor for a home improvement project, only to learn after it’s too late that the “contractor” is unlicensed. When you first meet the contractor, he seems highly professional, organized, and ready to complete your project on time. Perhaps he even came with good references. But after you hand over a big deposit check, the problems begin. You scarcely see or hear from the contractor again. At most, he sends a few of his tradesmen, on an unpredictable and sporadic schedule. And the work is being done all wrong. That’s when you find out your contractor is unlicensed. What do you do? What are your rights? Fortunately, California law has strong protections for homeowners in these situations.
Unlicensed contractors in California face severe consequences for engaging in construction work without the mandated licensure. California’s Contractors State License Board (CSLB) requires individuals or companies undertaking or performing construction work exceeding $500 in labor and materials to be licensed. Under California Business & Professions Code §7031(b), any contractor who performs work which requires a license at a time when they are not licensed must forfeit the entire sum paid to them while unlicensed. The statute is strictly interpreted and does not concern itself with whether the lapsed licensure was accidental or intentional, or whether the work performed was adequate or sub-standard.
These stringent consequences underscore the state’s commitment to protecting homeowners from contractors who “talk a good game” but can’t deliver, by promoting adherence to licensing regulations. The purpose of Section 7031 is “to protect the public from incompetent or dishonest contractors by requiring that contractors be licensed by the state and that, to obtain a license, they show knowledge, experience and good character. Business & Professions Code Section 7031 is designed to enforce licensing laws by precluding unlicensed contractors from using courts to recover money owed for contracting work, and by allowing victims of said contractors to recover all of the money paid to the contractor.” Knapp Development & Design v. Pal Mal Properties, Ltd., 173 Cal.App.3d 423, 430 (1985) (emphasis added).
Further, California Business & Professions Code §7159, requires a contractor to obtain a written contract, signed by both parties, among other requirements, before undergoing any home improvement project for more than $500. This law also mandates that change orders must be written and signed.
Lanza & Smith has successfully litigated cases against unlicensed contractors and recovered homeowners’ money.
Anthony Lanza and Brodie Smith are litigation and trial attorneys licensed in California, have developed a focused practice area in federal business litigation and civil RICO. They can be contacted at (949) 221-0490.
The information in this blog post does not constitute legal advice, nor create and attorney-client relationship. Laws constantly change, and this information may become outdated; moreover, the information here is only a general overview and may omit some aspects of the law. It is provided for discussion purposes only; not to be relied upon by the reader in making any real-world decisions
