Excerpts from California State Contractors’ License Board (CSLB)
(www.cslb.ca.gov)

Before you sign a contract; Before you hire a contractor; or before you pay for work and repairs to your home; Get free information from the California State Contractors License Board on their web site. The following information is a shortened excerpt from their web site:

When hiring a contractor to perform any job on your property, take your time before you make a decision about hiring a contractor. Get at lease three bids and check references. Hire only licensed contractors. Anyone performing home improvement work valued at $500 or more must be licensed by the Contractors State License Board. Get the contractor’s license number.

Contractors State License Board

The CSLB provides information about a contractor’s license, bond and workers’ compensation insurance status, as well as pending and prior legal actions.

• Verify License Status online
  Choose search option by License Number, Business Name, Personal Name, HIS Number (Salesperson’s Registration #), HIS Name (Salespersons Name to check the status of their registration)
  or by calling (800) 321-CSLB (2752).

Contracts:

• Get your contract in writing and don’t sign anything until you understand the terms. (In California, there must be a written contract for all home improvement projects over $500 in combined labor and materials costs!) For more detailed information on what a Contract should contain, see CSLB on-line section “What to include in a Contract”.
• Required in your contract: a specific description of work to be done, materials to be used, total cost of the project, and start and completion dates.
• Ask a friend, relative, or legal representative to review the contract before you sign it.

What you should know about unscrupulous Contractor Scams. . .

• Door-to-Door Solicitations – offers to do roofing, painting, paving work at reduced price. Once payment is made, little or not work is done ang the project is abandoned.
• High Pressure Sales – Unscrupulous Contractor pushes for an immediate decision about work, making it impossible for homeowner to get competitive bids, check licenses or review references.
• Scare Tactics – Deceitful contractor offer to perform a free inspection, then claims that faulty wiring, bad plumbing, or leaky roof puts homeowner in peril. Alarmed homeowner agrees to unnecessary and over-priced work.
• Demand for Cash – Contractor demands cash payments, sometimes going so far as to drive the victim to the bank to withdraw funds. The unscrupulous operator takes the money and runs
• Illegally Large Down Payments – Dishonest contractor takes more for a down payment that allowed by law, claiming to need instant cash for supplies and to pay workers, by law, a down payment cannot exceed 10 percent of the project price or $1,000, whichever is less.
• Verbal Agreements – Contractor states that a written contract is unnecessary-promising to deliver the verbal agreement. Shady operator takes advantage of the situation to perform shoddy work—or none at all.

Payments:

• Don’t pay cash.
• Include a payment schedule in your written contract.
• Don’t pay more than 10 percent of the job or $1,000, whichever is less, as a down payment
• Don’t let payments get ahead of the work.

ALERT Be advised that unlicensed individuals pose a risk to you and your family’s financial security if a worker is injured while on your property, your property is damaged, or if the work is incomplete and/or faulty. Few, if any, unlicensed individuals have a bond or workers’ compensation insurance. The quality of their work usually doesn’t compare to that of a licensed contractor. Don’t take the chance in order to save a few dollars. You’ll probably end up paying more in the long run.

CSLB licenses contractors in 44 different classifications. This ranges from general contractors to swimming pool contractors, landscapers, painters, electricians, plumbers and many more. It will be easier to decide the right type of contractor if you carefully plan your project in advance and clearly define what you want done to your property.

Ask for personal recommendations:

Friends and family recently may have had similar projects completed. If they are satisfied with the results, chances are you will be, too. Other resources are your local building department, trade association or union, consumer protection agency, consumer fraud unit, and the Better Business Bureau.

Verify the contractor’s business location and telephone number. A contractor who operates a business from the back of a pickup truck with a cellphone may be difficult to find if a job needs to be fixed after the last bill is paid.

Verify the contractor’s workers’ compensation and commercial general liability insurance coverage. Ask to see a copy of the Certificate of Insurance or aske for the name of the contractor’s insurance carrier and agency to verify that the contractor has insurance. In California, if a contractor has employees, he/she is required to carry workers’ compensation insurance. The importance of this cannot be overstated. If a worker is injured working on your property and the contractor doesn’t have insurance, you could be financially liable to pay for injuries and rehabilitation and your homeowner insurance may or may not cover the costs. Learn more from the California Department of Insurance.

Commercial general liability insurance is not required; however, it covers damage to your property. If the contractor does not carry general liability insurance, he/she should be able to explain how damage or losses will be; otherwise, you or your insurance company could end up paying for damages.

A licensed contractor must provide you with information regarding both types of insurance in your written contract.

Contractor Bonds:

California licensed contractors are required to have a contractor license bond. It’s important to know what bonds do and do not cover. Some bonds are designed to protect you against substandard work that does not meet with local building codes.

Bonds may be classified as:

• Contractor License Bonds
• Contract Bonds
• Blanket Performance and Payment Bonds

To learn more about Contractor Bonds, visit California Contractors State License Board on-line section “Learn About Contractor Bonds”.

Building permit for my project:

This section guides you to your local building department. There are numerous building departments in California. According to the California Building Standards Code, no building or structure may be erected, constructed, enlarged, altered, repaired, moved, improved, removed, converted or demolished unless a separate permit for each building or structure has first been obtained from the building official. Code requirements vary in different cities and counties around the state. Check with your local building department to find out what’s needed in your area. You may want to check city, county and/or town if necessary. Links to those agencies in your area may be found on-line section “Do I need a building permit for my Project?”

Mechanics Liens:

Consumers are required to receive a “Notice to Owner” warning about property liens. Anyone who helps improve property, but who is not paid like subcontractors, suppliers or workers, may place what is called a mechanics lien on the property. A mechanics lien is a claim made against the property and recorded with the county.

For other ways to prevent liens, review CSLB’s publication, A Homeowner’s Guide to Preventing Mechanics’ Liens.

Canceling:

Three-day right to cancel

• Unless the contract is negotiated at the contractor’s place of business, and/or the contract price is under $25, the buyer qualifies for a three-day right to cancel. The contractor must provide you with information on your three-day right to cancel under the “Home Solicitation Sales Act” with your contract. This notice requires a seller of home goods or services to give the buyer three days to think about whether to buy the offered goods or services.
• To cancel, the buyer need only give the contractor written notice of his or her intent not to be bound by the contract. Under the law when the contract is canceled the seller can be required to return the entire contract amount and restore a consumer’s property to the way it was before the contract.

ALERT The exception to the three-day rule: Service and Repair contracts

• One major exception to the three-day right to cancel is a “Service and Repair” contract that covers emergency repairs or services that are requested by the consumer on short notice.
• The right to a three-day notice automatically is canceled the moment the contract is signed, and the contractor begins working on a “Service and Repair” contract.
• The contract should indicate that it is a “service and repair” agreement, and the total contract price for labor and materials must be under $750.

Five-day right to cancel

Starting in 2021, seniors (those 65 and older) will have five days to cancel the following transactions: home solicitation contracts, home improvement contracts, Property Assessed Clean Energy assessment contracts, service and repair contracts, and seminar sales contracts (AB 2471).

Homeowner Checklists

This step provides a list of some questions homeowners can ask themselves to see if their contract measures up

• Did you contact the Contractors State License Board (CSLB) on-line to check the status of the contractor’s license or did you call the CSLB for status at 1-800-321-CSLB (2752)?
• Did you get at least three local references from the contractors you are considering?
• Did you call them and see the work the contractor completed?
• Does the contract require the contractor get any needed permits before the work starts?
• Are the permit fees included in the contract?
• Did you read and do you understand your contract?
• Does the 3-day right to cancel a contract apply to you?
• Does the 5-day right to cancel a contract (for those 65 and older) apply to you?
• Does the contract tell you when work will start and end?
• Does the contract include a detailed description of the work to be done, the material to be used, and equipment to be installed?
• If you are making a down payment, make sure it is no more than 10% of the contract price or $1,000, whichever is less.
• Is there a schedule of payments? If there is, you should pay only as work is completed and not before.
• Did your contractor give you a “Notice to Owner,” a warning notice describing liens and ways to prevent them?
• Did you know changes or additions to your contract must all be in writing? Putting changes in writing reduces the possibility of a later dispute.