Renting Your Contractors License – Yes or No?

Is Renting your contractors license Illegal… Not if you are following the law!

renting your contractors licenseFor years, I have been asked if it’s okay for someone to become a qualifier on a license for a company who couldn’t otherwise obtain a license on their own.

I’ve always answered by quoting the Business and Professions Code that covers this issue. I also stress that they must have first hand knowledge of the work being done under the license they are qualifying. This direct supervision could be in the form of on-site visits, progress reports, photo’s, etc. You, as the qualifier, are responsible to ensure that the work being done meets plans, specs, and is to code. By not doing this, you are putting yourself at great risk of losing your personal assets, and being removed from any other license you may be qualifying. My recommendation is to do on-site visits. If the CSLB were to receive a complaint about a project that you are required to oversee, you better have your i’s dotted and t’s crossed. The only way to effectively do that is to make site visits.

Although the article below is stating that it is illegal to “rent” your license, it also states that you can qualify up to three licenses per year if you show that you own at least 20% ownership in that company. The CSLB shouldn’t ask a question, answer it with a No, then tell you the law says yes. Mixed signals only confuses the issue.

What the CSLB doesn’t do, is require that you prove you actually own 20%. You’re only required to list 20% on the license application. When I complete a clients application, I notify them of the 20% rule, but there is nothing to keep the company and qualifier from having a side letter stating that the qualifier doesn’t own any voting shares. That agreement will also state what the compensation will be to the qualifier. The qualifier is obviously not going to work for free, so compensation will be part of that agreement. I’m not sure why the CSLB has chosen to use the word “rent” other than to attempt to keep qualifiers from doing what the law allows.

In the case cited in the article, the qualifiers who accepted payment but didn’t maintain direct knowledge of the work being done did deserve to be punished. But I feel the CSLB needs to either have more control (lol me suggesting the government should have more control is funny) over qualifiers who qualify more than one license, or they should change the law. Doing nothing but catching the bad guy after the fact is not following their mandate to protect the consumer… Don’t Stop Now…There’s More!

Please follow and like us:
error