Cracking Down on Unlicensed General Contractors
CA Toughens Contractor Laws
Unlicensed California contractors now face jail time and stiff fines under new laws that took effect Jan. 1.
Assembly Bill 370 increases the penalties for unlicensed contracting that are identified in Business & Professions (B&P) Code Section 7028.
Currently, a first conviction for contracting without a license is a misdemeanor with no set jail time or penalties.
As of Jan. 1, a first offense is punishable by up to a $5,000 fine and/or six months in county jail. A second offense is punishable by 20 percent of the contract price, or aggregate payments to the unlicensed contractor, or $5,000, whichever is greater, and not less than 90 days in county jail.
A third offense would be subject to a fine not less than $5,000 nor greater than $10,000 or 20 percent of the contract price, and a county jail sentence between 90 days and one year.
B&P Code requires that all home improvement jobs valued at $500 or more for labor and materials must be done by a licensed contractor. The bill also amends the Code to include that anybody who uses an unlicensed contractor is a victim entitled to restitution, regardless of whether they knew the contractor was unlicensed.
A related new law requires that home-improvement contractors notify consumers of any pending liens on their property. If they are not notified, the lien becomes unenforceable. This law takes effect on Jan.1, 2011.
