Can I hire a contractor that is in the process of getting his CA Contractors License?
2 replies
Sep 27, 2019
California has very strict licensing licensing requirements, and severe penalties for performing construction work without a license when a license is required. Not only is not being licensed fatal to mechanics lien rights, it can be fatal to the right to get paid at all. In California, an unlicensed contractor may not bring a breach of contract action and file suit to get paid. In California, unlicensed contractors are not entitled to be paid – period – for anything, and will be thrown out of court if they file suit. Unlicensed contractors in California can be even be forced to repay amounts that they were paid for work they actually did! The Contractors State License Board in California works with property owners to recover amounts paid to unlicensed contractors, and in 2017 recovered $47 million in restitution.
Additionally, contracting without a license in California is a misdemeanor crime.
While there are some limited exceptions to this rule (handymen can perform less than $500 worth of work in some cases), and some construction participants (like equipment lessors and material suppliers) are not generally required to be licensed at all.
Since the licensing process can take 6 months or more, it is likely not a good idea for a contractor to perform work for which a license is needed prior to actually being licensed. Given the substantial risks and penalties for contracting without a license, it is probably unwise for the contractor to assume that the license will come through with no hiccups, and that there will be no disputes prior to obtaining a license.
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Sep 28, 2019
Nate is spot on. Your contractor must not commence work before the license is active otherwise your contractor may risk significant penalties for doing so.