Over the last year, I’ve noticed an alarming increasing trend in the monthly Contractors State License Board (CSLB) News Releases. More and more “alleged contractors” have been caught in CSLB Statewide Investigative Fraud Team (SWIFT) operations using licenses that do not belong to them.
California has a very active SWIFT operation. Along with local City Code Enforcement Officers, it’s getting increasingly difficult to perform renovations and remodeling on your home and not get caught. The fines and prison sentences simply are not worth it. First time convictions include up to six months in jail and/or up to $5,000 in fines. Penalties escalate with successive violations.
What people are doing is pulling permits at the City using the license of reputable Contractors. They do this by stealing the license numbers off work trucks, web sites, print advertising, and the CSLB web site! This is illegal.
Here’s what you need to know:
1. Don’t hire anyone without making sure they are who they claim to be. Remember, this person is going to be in your home alone for hours – perhaps with your family.
2. Before they first arrive to your home, check them out at www.CSLB.CA.GOV . You can type in their name or license number to see if the license is legitimate and in good standing. Make sure they have Workers Compensation insurance. Don’t fall for the “they are exempt from Workers Compensation Insurance because they have no employees” language that you’ll likely see on the CSLB web site. Anyone can file an affidavit with the State testifying that they have no employees to avoid having to carry Workers Compensation insurance. What’s the big deal? If anyone is hurt while working on your home and they are not covered by Workers Compensation Insurance, you’re responsible for all medical, legal, and rehabilitation expenses – your home owners insurance policy does not cover this – it comes out of your pocket! Do you have tens and hundreds of thousands of dollars laying around for this?
3. When the Contractor arrives at your home:
a. BY LAW – All work vehicles must have in large lettering the business name, phone number, and license number on both sides of the vehicle. If it does not, you can be certain they are hiding something.
b. BY LAW – All Contractors must have and carry their plastic Pocket Card. This will identify the holder of the license, license number, CSLB’s web site address, entity (Corporation, LLC, etc.), classification, expiration date, and the signature of the legal owner. Ask the person to sign on a piece of paper their name and compare the two signatures. If they don’t match – throw them out!
c. BY LAW – All Contractors must have and carry their plastic Bond Card. Compare it to the Pocket Card. If the holder of the license number and license number itself do not match – throw them out!
d. BY LAW – Before you sign any contract, you must be provided with the Contractor’s license number and the name, address, contact telephone number, and policy numbers for their business location, Workers Compensation Insurance Carrier, General Liability Insurance Carrier, and Bond Carrier. You must also be provided the address and telephone number of CSLB. If it’s not there – throw them out!
e. BY LAW – The maximum amount of the down payment cannot exceed 10% of the contract price or $1,000; whichever is less. The contract must also provide you a payment schedule illustrating the progress payments including the amount and percentage the progress payment represents. The progress payments must clearly explain when they are due and what will be completed before that payment is made by you. NEVER let the payments get ahead of the work. Do not pay anyone because they claim to need more money for materials, labor, whatever. Pay them only what has been earned based on the work completed.
f. Never pay the first progress payment until the Contractor produces a valid Building Permit card for your job. If you’re not sure, call your City Building Department and ask. They’ll be happy to help you.
g. Never pay the final payment until the Contractor produces a valid and completed Building Permit card for your job illustrating that the Building Inspector has approved all work and signed that the job is complete. If you’re not sure, call your City Building Department and ask. They’ll be happy to help you.
If you have any questions, call me at (949) 380-0177. I’ll be more than happy to answer your questions and help you any way I can.