Home>Levelset Community>Legal Help>When is it legal for a licensed company to hire an unlicensed subcontractor. When is an invoice considered a contract?

When is it legal for a licensed company to hire an unlicensed subcontractor. When is an invoice considered a contract?

CaliforniaConstruction Contract Licenses

1. Can a licensed flooring company legally use unlicensed, unsupervised, tile installers to perform work in a home? They are (1099 employees, not W-2). 2. If a homeowner signs an invoice, is that considered a legal contract if it does not include a thorough description of the work to be done, information regarding consumer's rights, or information regarding general liability insurance, workers comp, CSLB, or the right to cancel?

1 reply

Sep 27, 2019

It's possible that a signed invoice could create or lead to the creation of a contract. However, California home improvement contracts have very strict requirements regarding what information must be included in home improvement contracts - including a notice of right to cancel. We discuss that in this article: California Home Improvement Contracts Require Specific Language [Free Download]. And, failing to include certain information can even render the agreement void altogether. Right to cancel Regarding the failure to include the right to cancel in the contract - California home improvement contracts must include provisions relating to the property owner's 3-day right to cancel the contract. Generally, an owner is allowed a 3-day "cooling off" period after they've entered into an agreement, and if they decide to cancel the contract within those 3 days, then the agreement will be terminated without the owner being liable for breaching the contract. But, if the notice of right to cancel isn't properly included in a home improvement contract, an owner will generally be entitled to cancel their contract within 3 days of receiving notice of their right to cancel. Licensing considerations Note that there's generally no licensure requirement for those who merely provide labor for a properly licensed construction business. Meaning, each individual employee doesn't necessarily need to be licensed as long as the business is properly licensed. When those performing labor are independent contractors, rather than employees - this can get trickier. But, generally, not every laborer who's performing work for a properly licensed contractor will need to be licensed. Of course, if unlicensed laborers aren't being supervised at all by the licensed contractor - that might ultimately be a misuse of the license. And, in a situation where a licensed contractor isn't actually supervising the work their license was used to qualify, that would quite possibly constitute a violation of the licensing rules and justify a complaint with the CSLB. That's about the extent of my expertise on the topic, but if there's been an issue on your project, it might help to consult a California construction attorney about the matter. They'll be able to review all of your documentation and other circumstances and advise on how best to handle your situation. We've got a list of California construction law experts here: Construction Payment Experts in California. Further, we've published lists of great construction attorneys and firms in both Los Angeles and San Francisco, if you happen to be in or near one of those cities.

2 people found this helpful

Helpful