Report Unlicensed Activity

CSLB Unlicensed Contractor stingThe Contractors State License Board (CSLB) states that unlicensed contracting is part of California’s estimated annual $60 to $140 billion dollar underground economy. These individuals and businesses do not pay taxes, have general liability insurance or license surety bonds. The CSLB also believes that it is not unusual for them to be involved in other illegal activities as well.

What can you do if believe that an individual or business is contracting without a license? And can I report unlicensed activity?

File a complaint using this CSLB Advertising Complaint for Unlicensed Contractors form.

What is illegal contractor activity?

It is illegal for an unlicensed person to perform contracting work on any project valued at $500 or more in combined labor and material costs. Besides being illegal, unlicensed contractors lack accountability and have a high rate of involvement in construction scams. Unlicensed contractors are also creating unfair competition for licensed contractors who operate with bonds, insurance, and other responsible business practices.

What should you do if you know that an individual or business is using someone else’s license number illegally?

File a complaint using this CSLB Advertising Complaint for Unlicensed Contractors form.

What happens if you don’t renew you license on time?

You will be considered unlicensed until your renewal is processed. During this period you may not enter into any new contracts.

How does CSLB process complaints against unlicensed contractors?

When the Board receives a complaint against an unlicensed contractor, it may issue an administrative citation or file a criminal action with the local district attorney’s office. In some cases, it may initiate injunction proceedings against the non-licensee through the Office of the Attorney General or the district attorney.

Citation

The Registrar may issue a citation to an unlicensed contractor when there is probable cause to believe that the person is acting in the capacity of a contractor or engaging in the business of contracting without a license that is in good standing with CSLB. The citation includes an order of abatement to cease and desist and a civil penalty of up to $15,000. Unless the board receives a written appeal within fifteen (15) working days after the citation is served, the citation becomes a final order of the Registrar. The civil penalty is paid to CSLB.

If the citation is appealed, a mandatory settlement conference may be held to resolve the citation. If the matter is not settled, the appeal will be heard before an administrative law judge. The administrative law judge submits a decision to uphold, modify, or dismiss the citation. The decision is sent to the Registrar for adoption. If the cited unlicensed contractor continues to contract without a license, the Registrar may refer the case to the local district attorney for criminal action.

Criminal Action

CSLB may refer investigations to the local prosecutor to file criminal charges. If criminal charges are filed, the unlicensed contractor appears in local court, which renders a final decision on the case. The court may order a fine, probation, restitution, a jail sentence, or all of these.

Injunction

The Registrar may apply for an injunction with the superior court of either the county in which an alleged practice or transaction took place or the county in which the unlicensed person maintains a business or residence. An injunction restrains an unlicensed person from acting in the capacity or engaging in the business of contracting without a license that is in good standing with CSLB.

If you are unlicensed and need help with your application or you need study materials, the License Guru is here to help.

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CSLB Application Denials and the Appeals Process

Let’s take a minute to discuss CSLB Application Denials and the Appeals Process.

application denialIt’s a boring subject I know, but it’s good information to have if you find yourself stuck in the AIU vortex.

If your application is denied by the Application Investigation Unit, Section 485 kicks in.

§ 485. Procedure upon denial

Upon denial of an application for a license under this chapter or Section 496, the board shall do either of the following:

  • (a) File and serve a statement of issues in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
  • (b) Notify the applicant that the application is denied, stating (1) the reason for the denial, and (2) that the applicant has the right to a hearing under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code if written request for hearing is made within 60 days after service of the notice of denial. Unless written request for hearing is made within the 60-day period, the applicant’s right to a hearing is deemed waived. Service of the notice of denial may be made in the manner authorized for service of summons in civil actions, or by registered mail addressed to the applicant at the latest address filed by the applicant in writing with the board in his or her application or otherwise. Service by mail is complete on the date of mailing.

Added Stats 1972 ch 903 § 1. Amended Stats 1997 ch 758 §

The key here is that 60 day deadline to file your appeal request. I would suggest filing your appeal as soon as possible to get the appeal process started.

From here Section 487 applies and it outlines the Hearing process.

§ 487. Hearing; Time

If a hearing is requested by the applicant, the board shall conduct such hearing within 90 days from the date the hearing is requested unless the applicant shall request or agree in writing to a postponement or continuance of the hearing. Notwithstanding the above, the Office of Administrative Hearings may order, or on a showing of good cause, grant a request for, up to 45 additional days within which to conduct a hearing, except in cases involving alleged examination or licensing fraud, in which cases the period may be up to 180 days. In no case shall more than two such orders be made or requests be granted.

Added Stats 1972 ch 903 § 1. Amended Stats 1974 ch 1321 § 10; Stats 1986 ch 220 § 1, effective June 30, 1986.

The important part in this section is that the hearing shall be conducted within 90 days of the hearing being requested. Unless you, the applicant, request or agree to a continuance. I wouldn’t agree to a continuance because I wouldn’t want to give the board the ability to delay the process any further. If the OAH grants a request for extension, you’re stuck with it. The CSLB likes to say that the process can take 4-6 months, but I think this is a scare tactic. Section 487 suggests that a hearing could take place in as little as 3 months.

After a hearing request is submitted, Section 488 comes in to play.

§ 488. Hearing request

Except as otherwise provided by law, following a hearing requested by an applicant pursuant to subdivision (b) of Section 485, the board may take any of the following actions:

  • (a) Grant the license effective upon completion of all licensing requirements by the applicant.
  • (b) Grant the license effective upon completion of all licensing requirements by the applicant, immediately revoke the license, stay the revocation, and impose probationary conditions on the license, which may include suspension.
  • (c) Deny the license.
  • (d) Take other action in relation to denying or granting the license as the board in its discretion may deem proper.

Added Stats 2000 ch 568 § 2 (AB 2888).

This one is interesting because of item (c). This suggests that the CSLB could deny the license… again. What’s curious is that it was a denial that led you down the appeal/hearing path in the first place.

So there you have it, some interesting facts about CSLB application denials and the appeals process.

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