Under California Business and Professions Code section 7048, a California contractors license is required when a contractor performs work on a project under one or more contracts with an aggregate contract price of $500 or more.
- Unlicensed contractors may advertise so long as their advertisement indicates that they are not a licensed contractor. Bus. & Prof. Code §7027.2;
- Licensed contractors may advertise so long as they include their California contractors license number on all advertisements, including print, television and radio advertisements, contracts, subcontracts, bids, business cards, webpages, and commercial vehicles. Bus. & Prof. Code §§7027, 7027.1, 7029.5, 7029.6, 7030.5; and
- Prime contractors and home improvement contractors must also include specified language in their contracts. Bus. & Prof. Code §7030.
Note: As one commentator has pointed out, the CSLB’s news release below is technically inaccurate, in that it implies that a contractor can advertise without a California contractors license so long as the work being performed has a value of “$500 and under.” Actually, Business and Professions Code section 7048 says that a California contractors license is required if a contractor performs work with a value of “$500 or more.”
Yeah, I know, it’s a difference of a buck. Who knows, maybe the CSLB is in the holiday spirit and giving unlicensed contractors a $1 break.
Angry about Unlicensed Competition? There’s a Form for That
Licensed contractors must include their CSLB license number in all forms of advertising. Those without a license can advertise as long as the ad states that they are not a state-licensed contractor, and the combined total of a project’s labor and materials costs is $500 and under (Business and Professions Code section 7027.1).CSLB has a new way to report illegal advertising activity to help level the playing field for licensees. An Advertising Complaint form now is available on the CSLB website to report unlicensed operators who illegally list their services on the Internet or in publications, in defiance of state contracting law.
However, many unlicensed operators are flouting the law by soliciting for projects that can far exceed the $500, such as kitchen or bathroom remodels, tree services, or painting. They often find a ready market for those services on various Internet sites and bulletin boards, where minimal oversight exists to weed out unscrupulous operators.
Licensed contractors who encounter an ad they think was placed by an unlicensed operator can go towww.cslb.ca.gov/Resources/FormsAndApplications/AdvertisingComplaint.pdf. The reporting service also is open to consumers.
While some complaints may not contain sufficient evidence for CSLB to take disciplinary action, the information is still important and may be used for future enforcement actions.
Anyone who files a complaint can remain anonymous. Download and print the online PDF form, specify the source of the ad, and attach a copy that shows the ad publication date. The form must be mailed to either CSLB’s Sacramento headquarters or the Norwalk Intake & Mediation Center. Instructions about which office to mail the information to are included on the form.