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 Spring 2015 Newsletter

The CSLB Spring 2015 Newsletter was sent out today.

Here are my highlights… or lowlights.

CSLBs Illegal Critical ClassificationsIn the Chair’s opening statement he said: “You can expect CSLB to continue its vigorous regulation of California’s construction industry, and to aggressively pursue unlicensed contractors and unscrupulous businesses through sting operations, construction site sweeps, and other strategies. We want to build more partnerships with licensees, industry groups, and government agencies to present a united front against individuals and businesses who try to hide from state laws or take advantage of consumers.”

Once again, they’re missing the bigger picture. Cause and effect, if you will. “…vigorous regulation of California’s construction industry, and to aggressively pursue unlicensed contractors…” The Contractors State License Board is playing a HUGE part in creating the large amount of unlicensed contractors with their “vigorous regulations.”

For over two years now they have been putting applicants through the wringer with their “profiling” of specific applications. They continue to quote the regulation that requires them to perform a secondary review of at least three percent of all apps received. What I’m hoping/praying will happen is that the State Legislature or an attorney will finally call the CSLB to the mat on this.

They are not randomly selecting applications as the law states, they specifically profiling and targeting these classifications. Last week I was told by a CSLB employee that they should no longer use the term “critical classifications.” I guess they realized that using this term was illegal. DUH!!! They can’t just decide on the whim of a single power hungry CSLB employee to profile specific individuals.

That’s all for now. More later.

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How to Get a California Contractors License Part 4

IN THIS SERIES OF POSTS, I’LL TELL YOU HOW TO GET A CALIFORNIA CONTRACTORS LICENSE. ON TO PART 4.

Contractors State License Board Wall License

16) DOES THE CSLB RECOGNIZE LICENSES FROM OTHER STATES?

Yes. The CSLB has reciprocity agreements with Utah, Nevada and Arizona. It is possible to get a CA license if you hold a license in one of these states by only having to take the CA Law & Business exam. The key is, you must have been licensed in the other State for a minimum of 5 out of the last 7 years. Note, if you are applying for one of the 8 critical classifications, be prepared to submit additional experience verification documents with your application.

17) WHAT HAPPENS IF I GET CAUGHT OPERATING WITHOUT A LICENSE?

It is a misdemeanor in CA, and the fines can range from $200 to $15,000. A citation would be issued that would remain at the Board for up to 10 years. So if or when you apply for your license, your application will be delayed for an extended period of time while they review the circumstances of the citation.

18) AM I REQUIRED TO BE FINGERPRINTED?

Yes. Fingerprints are required for all new applications, adding officers to an existing license, replacing the qualifier, etc.

19) WHAT IF I HAVE A MISDEMEANOR CONVICTION FROM YEARS AGO? CAN I STILL GET MY LICENSE?

Yes. You can still get your license but the application processing time will be greatly increased. All fingerprints go through the CA Department of Justice and the FBI before being sent to the CSLB. At the CSLB the records will be reviewed by the Criminal Background Unit or CBU. At the time of this video, the current backlog in the CBU is around 2 months. Which means that receiving a test date and obtaining your license could take as long as 4-6 months.

20) ARE THERE ANY FINANCIAL REQUIREMENTS TO QUALIFY FOR A LICENSE?

Yes. The CSLB requires that you maintain at least $2500 in working capital. There is a check box in the application that ask’s you this question. But the CSLB does not require you to provide banking information to prove this.

Stay tuned… Part 5 coming soon!

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CSLB News Release

A CSLB News Release was issued today.

It’s good to see the Contractors State License Board (CSLB) getting out and doing these stings. There were several of them that were bidding as B-General Building Contractors. I wonder if any of them have looked into, or attempted to get their license but couldn’t because of the new application processing procedures. And this could be a sign that the underground economy is expanding.CSLB News Release

It Was Raining Illegal Contractors at Hayward CSLB Sting OperationNine suspects cited, given court dates for contracting without license, illegal advertising.

SACRAMENTO

– A stormy day didn’t deter unlicensed contractors from converging on a Hayward home to bid for construction work during a Contractors State License Board CSLB undercover sting operation on November 20, 2013, carried out with the assistance of the Alameda County District Attorney’s Office. Nine suspects were issued Notices to Appear NTAs in Superior Court on charges of contracting without a license and false advertising.

Investigators from CSLB’s Statewide Investigative Fraud Team SWIFT posed as homeowners at the single-family home and fielded a multitude of offers to do work that included electrical, plumbing, fencing and flooring projects. It wasn’t difficult for CSLB investigators to identify those who might be illegally contracting in the area simply by checking online bulletin boards such as craigslist, business cards or flyers posted at hardware stores, and local publications, including Penny Saver.

Nine of the 10 people who showed up to give a bidwere cited. All nine face misdemeanor charges for both contracting without a license Business and Professions Code section 7028, which carries a penalty of up to six months in jail and/or a fine of up to $5,000 if convicted, and illegal advertising Business and Professions Code section 7027.1. State law requires contractors to place their license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. The penalty is a fine of $700 to $1,000.

The lone person who did not bid had a good reason – he had been cited for illegal contracting during a CSLB sting in July and avoided getting caught again.

“It doesn’t matter what the conditions – rain, cold, or even after a natural disaster – unlicensed contractors always seem to come out of the woodwork,” said CSLB Registrar Steve Sands. “And they come to take advantage of a situation, no matter if they’re qualified or not to do the job.

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Experience Verification of a Young Journeyman-Contractor Talk

Below is a question from a young journeyman who has to provide experience verification.

Hey License Guru I have a a few questions. My story been working with my dad since I was 15 doing gen contractor stuff like framing etc part time until I graduated HS then i did it full time. I am 23 now. I did work for his friend a while back who is also a licensed contractor. Thing is I dont have much in the way of paperwork showing i did. My dad just started paying me with pay checks a few months ago. Before that he has been giving me personal checks for the last few years. I checked my app status and it says now SPEC PROJ – EXPERIENCE VERIFICATION

Are they asking for my general experience so far or what I did for my dads friend. He was the one who did my experience verification/qualification form. For whatever reason he did not list his license number instead opting to put himself as an client Saying because I listed as self employed? He guided me through the application process but I had some reservations about it. It didnt feel right but I didnt know enough to really know.

So I ask 1. What does SPEC PROJ – EXPERIENCE VERIFICATION mean?

2. If it is what I think it is what happens if my dads friend the certifer does not have any reciepts/paystubs for me working for him? I think it said letters saying I did will not suffice? What if he puts down he is a licensed contractor and includes his license if he did not included it before. Would they accept that?

3. If I get rejected what happens. How long is the waiting period for me to apply again? will they have records of all the stuff I had previously? Would they catch any contradictions between applications if on the next go round I get put as working with my dad?

4. Any other tips on what to do since Im young I’m assuming they are going to scrutinize me more than they normally would.

experience verification young journeyman

My reply:

[Read more…]

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CSLB Qualifying Experience

In the next series of posts, I will be discussing the CSLB Qualifying Experience outline and process.

Below are a set of powerpoint slides that were shown at the recent Contractors State License Board Licensing Committee Meeting held at the CSLB office in Sacramento on October 21, 2013.

Along the way, I’ll add my advice and opinion where necessary. Click on the images to enlarge.

 

CSLB Qualifying Experience

Slides #1-2

How does the CSLB determine which trade classifications are directly affecting consumer’s health and safety?

CSLB Qualifying Experience Slides #3-4A month or two ago, there were only four CSLB trade classifications that they had labeled “critical classes.” Now there are 8.I would think the C-39 classification would have an affect on consumer health and safety if the work wasn’t done correctly.
CSLB Qualifying Experience Slides #5-6″Questionable Experience” What is the definition of “Questionable”? Who at the CSLB has determined this?

Also, no where in California Law is the term “Critical Classifications” mentioned. Is this a made up term?

 CSLB Qualifying Experience  Slides #7-8These explanations are much better at defining what steps the CSLB will take. They won’t provide this information in any shape or form, unless you were to go looking for it deep within the CSLB website.

Slide #8 doesn’t state that you have appeal rights after the formal investigation has generated a denial.

That’s all for now. Many more slides to cover in future posts. Thanks for reading!Click on the link below if you’d like to see the current letter being sent to applicants who are having to prove their CSLB Qualifying Experience.Acceptable CSLB Qualifying Experience

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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!

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Sex Offenders, Convicted Felons Snagged in Contractors State License Board Statewide Sting

Sex Offenders, Convicted Felons Snagged in Contractors

sex offenders, convicted felonsState License Board Statewide Sting

California Blitz highlights serious risks consumers take when hiring unlicensed contractors

SACRAMENTO – Seventy-five people may face criminal charges after being caught in six simultaneous statewide undercover sting operations conducted this week by the Contractors State License Board (CSLB). Among those arrested during CSLB’s fall California Blitz were two registered sex offenders; two individuals with several prior felonies including robbery, rape, burglary and drug possession; three who had an active arrest warrant; and several caught using contractor license numbers not belonging to them. Three of the suspects were taken to jail. One vehicle was towed.

“Homeowners should be nervous when they hear the background of some of the people we caught in these stings,” said CSLB Registrar Steve Sands. “Unlicensed, illegal activity that puts homeowners at risk and legitimate contractors at a competitive disadvantage will not be tolerated.”

“The Department of Insurance works closely with our state law enforcement partners to make sure that all businesses comply with the workers’ compensation laws, so that no business enjoys an unfair competitive advantage by violating the law”, said Insurance Commissioner Dave Jones… There’s more to read

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CSLB Undercover Sting

CSLB Undercover Sting Leaves Unlicensed Painters Feeling Blue

cslb undercover stingCould the CSLB be adding to the unlicensed activity taking place because of their new application processes?

CSLB Undercover Sting in Santa Monica Leaves Unlicensed Painters Feeling Blue

Multiple suspects hit with three different legal punches

SACRAMENTO — An apartment complex about one mile from the famous Santa Monica Pier served as the backdrop for an undercover sting operation conducted Thursday, September 26, 2013, by the Contractors State License Board’s (CSLB) Statewide Investigative Fraud Team) (SWIFT). The operation resulted in eight people receiving Notices to Appear (NTA) in court to answer a variety of misdemeanor charges. Seven of the eight gave bids for painting.

via CSLB Undercover Sting in Santa Monica Leaves Unlicensed Painters Feeling Blue.

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Contractors State License Board meeting, Sacramento, CA. 9/16/13

I attended the CSLB Board meeting today and here are a few note worthy items.

1) The CSLB is working with the Highway Patrol to educate some officers on contractors license law. It’s currently a pilot program, but if you are pulled over and have a truck full of construction materials, the officer may ask you for proof of a license. Just something to be aware of.

2) The CSLB conducted some trial stings where they approached contractors, or persons who looked like contractors, at SoCal area building supply stores. They approached these persons to get their contact information. Then they made appointments to have these persons come over to a sting house to give a quote. Several were caught, cited, and/or arrested.

The bottom line here…. the CSLB is cracking down on unlicensed activity in many ways that haven’t been seen or used before. I commend them on their efforts.

3) It was stated in today’s meeting that if you submit self employed experience and are afraid that if you provide documents that may suggest you are working illegally without a license…. no worries. They have said on the record that they will not pursue you administratively for working above the $500 limit. Their goal is to get people licensed.

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