Homeowners can end up financially devastated by hiring these illegal operators
Nearly two dozen people went out on a limb by contracting without a license in San Bernardino. In so doing, they were caught in a sting operation conducted on May 26 and 27, 2010, by the Contractors State License Board (CSLB). The CSLB operation included support from the San Bernardino Police Department, the San Bernardino County District Attorney’s Office, and the California Department of Justice (DOJ).
Members of CSLB’s Statewide Investigative Fraud Team (SWIFT) posed as homeowners and took bids for tree trimming and painting. During the two days, 22 suspects received Notices to Appear (NTA) in court for contracting without a license. One of those 22 received an additional charge for soliciting an excessive down payment; another suspect will answer to charges of being an unregistered Home Improvement Salesperson.
California Business and Professions (B&P) Code requires all home improvement jobs valued at $500 or more for labor and materials be performed by a state-licensed contractor. The code also requires that contractors put their license number in all forms of advertising. Those without licenses may do jobs valued at less than $500, but their ads must state that they are not a licensed contractor. It’s also illegal to solicit a down payment greater than ten percent of the contract price or $1,000, whichever is less. There is an exception to the down payment provision for about two dozen contractors, noted on CSLB’s website, because they purchase special bonds for consumer protection. Another section of B&P Code requires all people who sell home improvement contracting services to be registered with CSLB.
Homeowners seldom realize the risks of hiring illegal operators. Phony contractors don’t carry workers’ compensation insurance or the license bond required by B&P Code that enables consumers, subcontractors or materials suppliers to collect if the job is incomplete or not completed according to the contract.
“Homeowners can end up financially devastated by hiring these illegal operators,” said CSLB Registrar Steve Sands. “If somebody gets injured while working on your property, you may be liable.”
The California Labor Code requires all contractors with employees to have workers’ compensation coverage for each of them. Roofing contractors must also carry workers’ compensation insurance for themselves. B&P Code requires that all contractors have a license bond for $12,500 for consumer protection.
CSLB urges consumers to remember the following tips when hiring a contractor:
- Verify the contractor’s license by checking online at www.cslb.ca.gov, or using CSLB’s automated phone system at 1-800-321-CSLB (2752), and ask to see a photo identification to make sure you’re dealing with the correct person.
- Don’t pay more than 10% down or $1,000, whichever is less. There is an exception to this for about two dozen contractors who have special bonds for consumer protection that are noted on the CSLB website.
- Don’t pay in cash, and don’t let the payments get ahead of the work.
- Check references, and get at least 3 bids and a written contract with the estimated total cost of the project before any work begins