Home>Levelset Community>Legal Help>Operated Equipment Rental in California - License required?

Operated Equipment Rental in California - License required?

We have a prospect who is a Operated Equipment Rental Business, which does dirt work. We initially thought we may not be able to work with them and they were not not a licensed contractor in California, but they told us that due to the fact that he simply charges by the hour as rental for his equipment (which he operates himself), he is not required to be licensed. He does not submit bids or quotes. H gives a hourly rental rate only. Second question, since this work does improve property, would lien rights exist for this for this work, even though he is not a licensed contractor.

4 replies

May 18, 2020

Earthwork generally requires a C-12 license when performed in California. With that being said, there are various exceptions to California's licensing requirements, which you can read here: Exemptions [7040 - 7054.5]. After reviewing those exceptions, I'm not sure that simply charging an hourly rate as an owner-operator would qualify as an exception to licensing rules. But, I'm also no expert on California's licensing rules. So, consulting with a California construction attorney might be helpful on that front - they'll be able to provide much more clarity there. If a license is required - then failure to hold the appropriate license would result in the loss of mechanics lien rights. What's more, that'd also render the contractor unable to recover payment via any legal or equitable claims, too. So breach of contract, unjust enrichment, prompt payment claims, etc. would be off the table if the unlicensed contractor went unpaid. With that being said, it's best to assume that they'd be entitled to lien rights and to proceed accordingly. Even if they aren't technically allowed to bring a claim - that doesn't mean they won't try to. And, even invalid mechanics lien claims and legal claims will create headaches and could be costly. What's more, making sure everyone gets paid on time and exchanging the proper paperwork on the job is just the right thing to do - and it will ensure that the job goes smoothly, stays on budget, and sticks to the schedule. For more discussion on California lien rights and licenses: - Can Unlicensed Contractors File a Mechanics Lien? - California Contractors License and the CSLB: Understanding the Rules

1 person found this helpful

Helpful

May 19, 2020

I read the code. There is no exclusion for the operator of equipment being rented. But he doesn’t hold himself out to be a contractor. He bills himself as a blade rental company but he is the one who operates the blade. If he is not a contractor, they would not need to be exempted. This. Commentary did not answer if the statue applies to this company.

Report Spam

May 19, 2020

The California licensing requirements apply based on the work that's done, not on how a business or person classifies themselves. And, if the work being done requires a license, then the person or business who's performing that work should hold the appropriate license. So, generally: If the work being done sounds like the work that's described by the C-12 license description, chances are that C-12 license is required. But again - I don't have a wealth of experience with California's licensing rules. So, for ultimate clarity, reaching out to a California construction attorney or to the California Contractors State License Board would be useful.

0 people found this helpful

Helpful

Sep 5, 2021

The operator of the equipment is doing the work under the direction of the contractor hiring him. If the contractor tells him to dig here, cut grade here, he is not controlling any of the work himself but only doing what the hiring contractor is telling him to do. So as far as I can tell, no contractors license is needed for equipment rental.

Report Spam