Home Improvement Salespersons (HIS) are entities that persons employed to sell home improvement contracts. The California Code defines HIS as
a person employed by a home improvement contractor licensed under this chapter to solicit, sell, negotiate, or execute contracts for home improvements, for the sale, installation or furnishing of home improvement goods or services, or of swimming pools, spas, or hot tubs.
They are essentially client managers for contractors, taking the reigns of the marketing and sales/contracts and allowing contractors to focus on the construction. Section 7153 of California’s Business & Professions Code mandates that home improvement salespersons register with the California Contractors State License Board (CSLB) as an HIS. The process of registration was a little too complex until recently.
On September 8, 2015, Senate Bill 561 was signed into law. Before this bill, a HIS would have had to register with the CSLB per representation. Now, under the new law, a HIS only has to register once with the CSLB in order to conduct business as a HIS no matter how many contractors they represent. In accordance with this new registration process, the penalty for not registering with the CSLB and still conducting business as a HIS is a single misdemeanor. Beforehand, a HIS was subject to a misdemeanor for each contractor they did not register with the CSLB.
In addition to these changes for a HIS, S.B. 561 will:
(1) require a contractor to notify the CSLB in writing prior to employing a registered HIS, and when employment ceases; (2) allow the CSLB to accept an electronic application and signature from a HIS applicant, (3) require a HIS to have a current and valid registration with CSLB before making sales calls and transactions on behalf of a contractor, and (4) provide that registrations will be valid for 2 years from the month of issue.
The amendment will come into effect on January 1, 2016. Until then, contractors and their home improvement salespersons must continue to operate under the old laws.
The Practical Side
When this amendment takes effect a few things will result. First and foremost, way less misdemeanors will be handed down to HISs. Before this law, a HIS was subject to penalty for each time they entered into a representation contract. Now they will only be exposed to a penalty once if not registered properly. Along with this simpler registration process and fairer penal repercussions, there is slightly more of a burden put on contractors because they must alert the CSLB of representation by a HIS. If you are a contractor, make sure you stay on top of this notice requirement in order to avoid penalties. Still, this amendment will greatly improve the efficiency of the HIS market and indirectly the work of many California contractors that choose to use a HIS.