Homeowners and landlords know a contractor is better off without a contractors license! Why?
Because if they screw up, then it’s not their problem. I really don’t think homeowners and well-meaning third parties understand the implications of who does the work and what the risks are.
The Contractors State License Board (CSLB) under the California Department of Consumer Affairs operating under the Business and Professions (B&P) Code is the only agency that evaluates and licenses contractors. Period. County or city business taxes are not contractor licenses, even the ones in this paper.
While it is true that handymen can do up to $500 of work (labor and materials) without a license, it is against the law to advertise without disclosing a CSLB license according the B&P Code. A non-licensed contractor can advertise if he or she states in the advertisement that they “are not a licensed contractor.” This is detailed in B&P Code section 7048, commonly called “Small Operations.”
Under the law, an unlicensed contractor is your employee, so if he (or she) falls off your roof, it’s the homeowner who is responsible for their injuries and lost income. If he (or she) walks off with half your house or moves in while you’re away, it’s too bad, so sad. Licensed contractors have at a minimum a contractors license bond of $12,500.
While homeowners must weigh the risks and determine whether to use illegal contractors, there is no excuse for Realtors or lumber yards to recommend or bring in illegal contractors at the homeowners risk.
I was recently amused when the Riverside County Sheriff’s Department had to forcefully evict an illegal contractor who decided to move in and use the MLS listed-for-sale house he was working on with his girlfriend. How surprised the homeowner was to walk in at the exact time of some conjugal activities up in bedroom that Saturday morning. And one red faced real estate agent was likely all too embarrassed to say the least. The Sheriff deputies actually went into the house with their guns drawn.
In this swell economy, plenty of legitimate bonafide contractors are available to do wonderful work at a fair price on the hill. There is no need to put yourself, your client or your insurance company at risk.
A contractors license is a pain to maintain and is hardly a benefit to any contractor other than being subjected to a host of rules and regulations. Yet you must manage your risk. The juice of an illegal contractor isn’t worth the squeeze. And verifying a name or license number is easy at cslb.ca.gov.