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is a construction contract valid if it was signed under a suspended license?

California

If the construction and payments were carried out for a time, does it wave the requirement of a Good Standing Construction License? California Board of Licensing requires that every Contractor should possess a valid Construction License at all times during construction? Can a contractor with a suspended license file a lien? Especially, when the contractor signed a construction contract with a suspended license and he never cured the suspension?

3 replies

Jul 30, 2021
Anyone can file a lien but, to answer your question, any lien would be defective and likely voidable if the contractor's license was suspended at any time.
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Jul 30, 2021
A contractor must maintain their license in good standing at all times during the course of the contract until the project is completed. Failure to maintain the licensure at all times relevant MAY subject the contractor to disgorgement, whereby contractor can be compelled to pay back every dollar on the project, even for material. However, enforcement of disgorgement has been spotty, even within certain courthouses. Caveat: often licensure lapse for whatever reasons, ex. late payment of bond or workers comp. insurance, and the contractor is instructed to correct it. At that point, it is not truly a lapse because the bond or workers comp. insurance would retroactively cover backward a few days. There are a lot of factors involved making the issue of licensure not as simple as it appears. You will want to have a discussion with a qualified construction attorney.
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Jul 30, 2021
Well the contractor could file it but that would be the equivalent of shooting ones self in the foot. You should have a construction law attorney review the contract and lien if filed.
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