Category Archives: Construction

How to Get a Handyman License in California

Is There Such A Thing As A Handyman License?

Are you a handyman in California and want to get your contractor license? You came to the right place!

As you surely know, almost every type of construction or home improvement worker in California is required to have a Contractor State License Board contractors license to practice their profession. Everyone from engineers to roofers is required to have one. But what about handymen?

We’re going to break the news to you right off the bat: there is no Contractors State License Board contractors license for people who do handyman jobs or maintenance workers.

In many ways, that’s good news! You save money on pricey licensing fees, bonds and insurance costs, and all of the legal red tape that comes with costly construction.

The downside is that there is a limit to how much you can make as a maintenance worker or handyman without a license – so you may be thinking about taking on larger jobs that may require a license.

Let’s explore more about how a handyman can take advantage of a contractor’s license.

When Do You Need A Contractor’s License?

In California, a handyman can legally undertake jobs without a license, but only if the combined labor and material cost is less than $500.

For projects exceeding this amount, a contractor’s license is required. It’s important to note that splitting a larger project into smaller parts to avoid licensing requirements is prohibited.

What Kind Of Contractors License Does A Handyman Need?

If you plan to handle projects over $500, you need a CSLB license in whatever trade or profession the job is.

For example, if you are doing AC work, you need an HVAC license; if you’re pouring concrete, you need a concrete license, and so on.

However, the contractor license that makes the most sense for handymen or maintenance workers is a Class B General Building Contractor license.

This license covers a broad range of construction and remodeling activities. With a Class B License, you can perform a variety of general construction tasks from painting to carpentry and beyond.

Read our guide on the Class B License to learn more.

Requirements to Obtain a Contractors’ License in California

Journeyman-Level Experience: Aspiring handymen need at least 4 years of journeyman-level experience in their chosen trade, which can be verified by a licensed contractor or other experts.
Submit An Application: Complete the contractor’s license application on the CSLB website.
Exams: Pass the dreaded CSLB exam, which covers various aspects of construction, safety, and project management, in addition to contractor law and business.
Fees: Pay the required licensing fees. These fees are extensive and can add up quickly. See our article for a full rundown.
Bonds & Insurance: You must have a contractors’ bond and workers’ compensation insurance to get a contractor license from the CSLB.
Background Check: The CSLB will perform a federal background check and a fingerprint check. All applicants’ backgrounds are taken on a case-by-case basis, so don’t be discouraged if, for example, you’re a felon.

Additional Certifications and Training

With a contractor’s license, the scope of projects you can take on as a handyman or maintenance worker expands greatly. You can leverage this new power by strengthening your clients’ trust further in the form of certifications.

Here are some certifications in particular that dovetail nicely with handyman work. Many of these are important to ensure the health and safety of not only yourself but your employees and clients.

EPA RRP Lead Safety Certification: This certification is crucial for handling projects involving lead paint – making sure you’re not inhaling or ingesting any carcinogens in the process of removal.
Mold Remediation Certification: A valuable certification for handymen, given the health risks associated with mold. Black mold in general is extremely commonplace in the US at the moment, which creates an opportunity for handymen to step in.
Professional Home Inspection Certificate: Useful for identifying potential issues in homes, an advantageous skill for handymen involved in property maintenance and repair.

Conclusion

While California doesn’t have a specific handyman license, anyone undertaking significant repair or remodeling work should consider obtaining a contractor’s license – specifically a general contractor license.

By getting a Class B general contractor license, a handyman or maintenance worker can exponentially expand their offerings to individuals and businesses, to the point where you’re basically starting a new career entirely – without having to really do anything!

Additional Resources

For further details and up-to-date information, it’s recommended to consult the California Contractors State License Board and explore training courses and certification programs relevant to the handyman profession.

What Bonds Do I Need as a California Contractor in 2024?

If you’re a new contractor in California – whether you’re looking to become a Class B general contractor or a Class C specialty contractor or anything in between – you need to know your bonds.

In fact – at the very least, you’ll need to have a contractor’s bond to even get your CSLB contractor’s license.

In this article, we’ll cover all the basics for what bonds you need to start the year off with a shiny new contractor’s license. This article will only cover the essentials – if you want to deepen your understanding of bonds, check out our Comprehensive Guide to Bonds.

Contractors State License Board Bond Requirements

What Is the Contractors State License Board?

The Contractors State Licensing Board (CSLB) is responsible for all contractors’ licenses in California. The CSLB handles all 300,000 contractors in the state of California – which is no small feat.

The CSLB’s main job is to make sure that contractors meet safety and craftsmanship standards to protect consumers and businesses from bad actors. They do this via the CSLB contractor’s license, which ensures a common standard.

Contractors License Bonds

In order to get your CSLB license, one must first meet the CSLB’s bond requirements – which have actually just changed as of January 1 of this year.

The primary bond that all contractors – regardless of classification, trade, tenure, experience, age, or type of work – are required to have at all times is a contractor bond.

The bond guarantees that a contractor will adhere to all contractual obligations laid out in the contract. If the terms are not met due to the contractor’s actions, the surety company covers the debts, up to the amount of the bond.

It’s important to note that even with a contractor’s bond, the contractor is ultimately responsible for repayment of the damages to the bond company. This bond is designed to protect homeowners against sketchy contractors by giving them at least enough money to cover most construction costs – although it’s often not enough.

Thanks to Senate Bill 607, as of January 1, 2023, the CSLB increased the principal bond limits for contractors from $12,500 or $15,000 to $25,000 for all contractors.

A Word About Insurance

It’s important to note that the CSLB requires additional types of protective measures in the form of insurance.

Insurance operates differently from bonds – covering the amount without needing repayment from the contractor – but offers the same guarantee of payment in the case of an issue.

The CSLB requires one type of insurance in order to receive or renew your license: Workers’ Compensation insurance. There are exceptions to this rule, but it’s de facto necessary.

The Main Types of CSLB Bonds

Contractor’s Bond: As we’ve covered, this is the main and most important bond required by the CSLB. Every contractor must have a contractor’s bond to receive their CSLB license. It must be written by a surety company endorsed by the CSLB and must be in the amount of $25,000.
Bond of Qualifying Individual: Required if your license is qualified by a Responsible Managing Employee or Officer who doesn’t own at least 10% of the corporation’s voting stock. This bond also has a $25,000 limit.
Disciplinary Bond: Necessary if a contractor’s license has been revoked due to violations. It is an additional bond with a $25,000 limit and must remain in effect for at least two years.
Workers’ Comp: For contractors operating as LLCs, a unique $100,000 LLC Employee/Worker Bond is required, providing extra protection for employees and workers.
Liability Insurance: For LLCs with five or fewer employees, you need to have liability insurance in the amount of $1,000,000.

Can You Get A Bond With Bad Credit?

Having bad credit can make obtaining a bond more challenging but not impossible – it’s not like buying a house or other situation where you are raked over the coals and cooked until crispy.

On the contrary, the construction industry is filled with competent, good people who have bad credit. You’d be lucky to find a job site without a good number of sub-600 credit scores.

That’s why many surety bond companies offer bonds for applicants with less-than-perfect credit. The trade-off is that you pay a higher premium rate.

Visit our Comprehensive Bond Guide for more information.

Conclusion

Bonds – specifically contractors bonds – are an essential part of the construction industry in California, creating a safety net for both individuals and businesses looking to get work done.

With a contractor bond, the client will receive some sort of compensation, so that they can at least come away with something in case they run across the small percentage of construction contractors who want to take advantage of people.

If you’re a contractor, make sure you get your bonds from one of the CSLB’s approved list of bond providers. The process should be quick, easy, and streamlined for anyone in the industry.

C-4 Boiler, Hot Water Heating and Steam Fitting Contractor: A Comprehensive Guide

What is the C-4 License?

The C-4 Boiler, Hot Water Heating, and Steam Fitting Contractor is the license assigned to contractors in California working on jobs involving hot water systems – boiler systems, steamfitting, heat pumps, and so on.

The C-4 License is designated for painting and decorating contractors in California. It encompasses various activities such as scraping, sandblasting, and applying paints, textures, fabrics, pigments, oils, varnishes, shellacs, stains, fillers, and adhesives.

The Contractors State License Board (CSLB)

The CSLB is the state agency in California responsible for licensing and regulating contractors in the construction industry, including the C-4 License. Everything you do related to the C-4 license

Application Process: The CSLB manages all the applications for a C-4 contractor
Qualifications and Experience: The CSLB sets eligibility criteria, including a combination of education, work experience, and/or apprenticeship training
Examinations: The CSLB administers the trade-specific and law & business exams necessary for licensure
Background Checks: The CSLB verifies identity and criminal history of all contractors
Licensing and Renewal: The CSLB issues and renews all contractor licenses
Consumer Complaints and Investigations: The CSLB handles complaints and can take disciplinary action against contractors through their enforcement division, SWIFT.

What Does A Boiler, Hot Water Heating, and Steam Fitting Contractor Do?

Luckily for us, this classification is easy to understand and very straightforward: if you’re painting or decorating a home with materials and labor costing $500, you’re doing C-4 work.

Key Duties

Demolishing and removing existing boilers or heating devices.
Installation, maintenance, and repair of various boiler systems
Testing, audits, and preventative maintenance
Design and engineering of advanced mechanical systems
Monitoring of boiler and heating systems and emergency services

Most Common Types of Jobs For C-4 Contractors

In your day-to-day work as a C-4 Contractor, you’ll most likely find yourself working on these types of jobs:

Boiler Services: Demolishing and removing existing boilers, boiler troubleshooting, and boiler system maintenance, repair, and retrofit.
Installation and Engineering: Installation and engineering of advanced mechanical systems, including radiant panel design and engineering, and the installation of new boiler systems after preparing the job site.
System Maintenance, Repair, and Retrofitting: Emphasizing the ongoing care and upgrades of boiler systems. In California in particular, retrofitting is an extremely lucrative area for any contractor.
Emergency Services: 24/7 emergency services and monthly monitoring for various boiler systems.
Environmental and Energy Efficiency Services: Fuel efficiency, energy optimization, and energy audits, for example: AQMD compliance testing.
Specialized Hot Water Systems: Specialty systems like hotel steam boilers, school and hospital boiler systems, and residential hydronic boiler systems.
Hydronics and Heat Transfer Solutions: IRadiant heat systems, heat services, and hydronic baseboard retrofits.
Planning, Estimation, and Customer Service: Planning and estimating boiler projects. Communicating with customers, whether gencons or homeowners, is something you’ll do every day.
Safety: Ensuring constant personnel and job site safety, including confined space work and handling dangerous materials.
Power Boiler Installations: Installation, service, and repair of fire-tube and water-tube steel power boilers and hot-water heating low-pressure boilers.
Steam Fitting and Piping: It’s in the name – you’ll be doing a ton of installation and maintenance of steam fitting and piping systems, along with fittings, valves, gauges, and pumps. If it’s high-pressure, you can work on it.
Radiators and Convectors: You already know this, but you’ll be working on a ton of radiators, convectors, fuel oil tanks, fuel oil lines, chimneys, flues, and heat insulation.
Solar Heating Equipment: The C-4 license also covers work related to solar heating equipment associated with these systems.

Who Needs the C-4 License?

Contractors who do any sort of heating, steam-fitting, or boiler work. If you do any sort of hot water work or work involved in pressurized water involving project costs over $500, you absolutely need a C-4 license.

In reality, that means most anyone doing this work, as anything involving boilers or furnaces or chimneys or anything of that sort will involve expensive materials and labor.

When Do You Need a C-4 License?

Any of the above projects exceeding $500 in labor and materials necessitates a C-4 license. This requirement applies regardless of the project’s complexity or scale.

For smaller projects under $500, a C-4 license is not mandatory. But in reality, that’s rarely applied to anyone working on hot water systems. Considering the cost of most hot water projects, you can expect to need a license.

When it comes to the C-4 license, very few jobs don’t require a C-4 license. You can get away with small jobs like replacing a valve or doing routine testing, but anything beyond basic maintenance will quickly get expensive in California.

How to Get a C-4 License

As established, the CSLB is responsible for licensing, maintaining, and renewing C-4 licenses. There are a number of prerequisites that a contractor must fulfill before the CSLB will assign a C-4 license.

Below you’ll find the requirements for the C-4 License and the Step-By-Step process to get one from the CSLB.

Requirements

At least 18 years of age
Valid driver’s license or ID
Social Security or ITIN number
Not on probation or parole
Four years of journey-level experience
A certifier to verify experience known as the Qualifying Individual
Documentation of experience if requested.

Step-by-Step Process

Gain Work Experience: A minimum of four years of experience as a journeyman is required to acquire ANY CSLB license.
Get Endorsements: Credible witnesses must testify to the applicant’s background and skills. Usually, this is your boss.
Submit A CSLB C-4 License Application: Complete and submit the application with necessary documentation.
Pay Fees: Pay all the fees associated with your license.
Background Check: Submit fingerprints for a background check.
Take the CSLB Exam: This two-part exam has two parts: a painting-specific exam and a law and business exam.
Get Bonded And Insured: Obtain a California contractor bond worth $25,000 and Workers’ Compensation insurance for every contractor under the license.
Receive Your License And Get To Work!: If you’ve followed all of these steps correctly, expect your license in a few weeks at most.

The C-4 License Application and Exam

The CSLB Exam

In order to get your C-4 license, you must pass the C-4 license examination – a 3.5 hour, 200+ question test that poses a real threat to your C-4 dreams.

The CSLB Exam is notorious for breaking even the smartest, most experienced contractors. This 230-question exam can take up to 6 hours and involves two sections: one on the finer points of painting and decorating, and one section on the business and law of contracting.

Exam Breakdown

The exam consists of two parts, each with 115 questions:
Law & Business Exam: Covering topics like company organization, bidding, cost control, business structures, labor laws, and contractor bonds.
Trade-specific Exam: Focusing on planning and estimating, boiler system installation and maintenance, safety, and various other technical aspects of boiler, hot-water heating, and steam fitting.

Timeline From Application To Licensure

It usually takes 6-8 weeks to receive your CSLB license from the time you apply.

The longest period of time you have to wait is waiting for your application to be processed by the CSLB. This currently takes roughly one month but can take up to six weeks. You can check the current status of your application on the CSLB website.

After you apply for your license and receive affirmation from the CSLB, you must pass the CSLB exam. This takes roughly a week.

After you take the test, you’ll know immediately if you passed or failed. If you pass, congratulations! You can deliver your insurance and bonds and get your license!

If you failed the CSLB exam, don’t worry, you can take the test again. Unfortunately, though, you must wait a few weeks before being able to retake the test.

C-4 License Maintenance and Renewal

Renewal Process

The C-4 license must be renewed every two years. If you don’t renew your license in time, it will cost you extra in fees.

Renewal applications must accurately reflect any changes in business information. If you change address, add anyone to your license, or have any changes at all to your C-4 license, make sure you let the CSLB know.

Exam and Re-Examination

Exam results are provided immediately after the test, so you’ll know if you passed or not on the day of the exam.
Unsuccessful candidates receive a performance breakdown for improvement. If you fail, you’ll know the specific areas that you need to improve upon to pass the exam.
If you fail the exam, you can retake the exam as many times as you like. Note that the CSLB charges an examination retaking fee every time you need to retake the exam.

Fees and Costs

There’s a litany of costs associated with getting your C-4 License. At the very least, expect to spend $700 on your license, with fees increasing or decreasing based on your business structure, exam results, and so on.

Initial application fee: $500.
License fee (sole owner): $200; (non-sole owner): $350.
Re-examination fee: $100.
Fingerprinting fees: DOJ – $32, FBI – $17.

Should I Get Multiple Licenses As A C-4 Contractor?

Considering how important and interconnected hot water systems are to the larger construction project, C-4 contractors might find themselves wondering if it makes sense to get additional licenses in order to provide a broader service to your community – and make a little bit of extra money in the process.

The answer is – definitely! If you can handle bigger projects, you can naturally make more money as a contractor, and considering you probably already have broad construction knowledge due to the interconnected nature of hot water systems, it’s absolutely worth it to invest in additional licenses to improve your bottom line.

When it comes to getting additional licenses for C-4 hot water systems contractors, you should look for licenses that are complementary to the C-4 license, involve hot water or heating, or are areas of construction where you have existing knowledge.

Class B General Contractor License: Considering how much you need to know to effectively perform the job of an interconnected hot water system like a boiler or a heat pump, you will naturally learn the skills a gen con needs to succeed as well. Picking up this classification will open up a whole new world of contracting opportunities.

C-36 Plumbing License: Plumbing and heating systems go hand-in-hand on pretty much any project, especially in large buildings like schools or apartment buildings, where heating systems may involve extensive piping. By holding both C-4 and C-36 licenses, you can offer a full range of services related to both plumbing and heating. For example, you can install the boiler, do the pipe installation to the shower, and install the shower piping. If you can do all that for your local community, you will never run out of new clients.

C-20 Warm-Air Heating, Ventilating, and Air-Conditioning License: The C-20 license is for heating, ventilation, and air conditioning – anyone can see how these two skill sets dovetail. Since HVAC systems often need to integrate with boiler and hot water heating systems, especially in giant commercial or residential complexes, holding both C-4 and C-20 licenses is a no-brainer for hiring managers. Any customer can see the value in someone who can install all of the heating and cooling systems for their project. Not only can you save them money, but you can net a much bigger profit, without much added cost.

Conclusion

If you’re a steamfitter or a hot water systems specialist, we don’t have to tell you – there’s money to be made working on these systems!

It’s a no-brainer to get your C-4 license if you work on anything related to hot water projects in California. It’s a tiny investment in what is an extremely lucrative specialty in a state that will have continued needs for hot water systems contractors.

Can a General Contractor Close Access to the Owner on a Construction Jobsite?

As a general contractor, you spend more time putting out fires than pretty much anything else.

It’s not a problem – most general contractors are natural problem-solvers and improvisers by nature, so we’re not shy when it comes to overcoming obstacles, even when those problems are people.

Dealing with subcontractors, haggling with suppliers, overseeing administrative teams, and interfacing with stakeholders – general contractors are constantly dealing with the expectations and demands of various groups of people, all with drastically different needs.

Usually, gen cons can handle these problems, as we’re the captains of the ship, and everyone answers to us. But what about those exceedingly rare situations where the client is the problem?

What do you do, as a general contractor, when the client themselves is causing you problems?

As a GC, you often have to solve problems with people by cutting ties with them and getting them away from the job site. But what can you do about an overreaching owner? Or worse, an owner who is putting your team in danger?

In some cases, you simply cannot do anything but ban the owner’s access to their own property while you do the things you need to do as a general contractor. Let’s learn more about this unique situation.

General Contractors and Owner Access: The Big Picture

To be entirely honest, understanding the legal intricacies of owner-contractor rights is a nigh-impossible task for construction professionals. After all, we’re here to build things – you wouldn’t hire a lawyer to install a toilet!

We could talk until we’re blue in the face about who has access to what and when, but the stark reality is that what’s legal in one place could be illegal in another across the giant geography that is the United States.

Instead of trying to get granular, we’re going to cover some of the main legal areas of importance governing owner access – and the rights of general contractors when it comes to denying access to owners. These legal goalposts serve as the federal frameworks around which localities and states build their own rules and regulations.

Implied Obligation of Access: On the client side, there is an inherent obligation for property owners to provide contractors with adequate access to the construction site. This access is necessary for contractors to perform their work under the contract. The level of access required depends on the nature of the work, and as its name suggests, is implied in the contract, not expressly written.
- Example: A simple example of this is for a residential building where the owner must allow the contractor to access the entire site for excavation and foundation work.
Owner’s Responsibility: Property owners must not only provide access but also ensure it is unobstructed for contractors. Any limitations on the contractor’s access must be explicitly stated in the contract. If an owner restricts access without a contractual basis, they risk breaching their obligations and may become liable for additional costs or losses incurred by the contractor.
- Example: A property owner restricts site access due to financial issues on the client side, but fails to specify this in the contract. This could result in the general contractor suing the property owner for losses.
Contractor’s Right To Work Without Interference: Contractors have the right to carry out work without interference from the property owner. This right is fundamental to construction contracts, and courts have shown a willingness to provide remedies for losses resulting from infringements of these rights.
- Example: A contractor may file a lawsuit against a property owner for repeatedly interrupting the work schedule, which infringes on the contractor’s right to work without interference.
Risk Allocation in Contracts: Construction contracts typically include provisions for risk distribution. These provisions aim to balance the responsibilities and liabilities between the owner and the contractor, so both parties can move forward in good faith. While specific clauses may attempt to shift responsibilities, the law generally imposes implied warranties and duties on both parties.
- Example: A contract outlining a high-rise commercial project might have 20-30 pages of risk allocation documents, specifically detailing the amount and type of risk allocated to both client and contractor. These documents can contain scenarios as wild as blizzard and tornado damage.
Cooperation and Non-Interference: Both the owner and the contractor are generally understood to have an implied duty to cooperate and not to impede or interfere with each other’s work. This mutual obligation is crucial for the successful completion of the project, though its application often depends on the individuals involved.
- Example: A common issue here is a failure on the client’s end to handle certain things like permits or materials. In many residential situations, it’s on the homeowner or landowner to get the necessary building permits.

When Can A General Contractor Close A Site To The Owner?

There are very few situations where general contractors can close access to the landowner, and even then, it is because they are being ordered to close the site as per regulations or regulatory bodies themselves.

The situations where you are allowed to close access to an owner as a general contractor are the extreme situations you would expect – issues with health and safety, explicit contractual orders, or legal compulsion either by law or law enforcement.

General Contractors Can Close Access To Owners If:

Safety Concerns: If there are imminent safety risks on the site, contractors can restrict access to ensure safety protocols are followed.
Contractual Provisions: If the contract explicitly allows the contractor to control site access during certain project phases.
Legal Orders: In cases where a legal authority or court order restricts access due to external factors like public safety or legal disputes.

General Contractors Cannot Close Access If:

No Contractual Basis: If the contract does not explicitly give the contractor the authority to restrict access, they cannot restrict access.
Owner’s Legal Rights: When the owner has legal rights to access the site for inspections, monitoring progress, or other purposes outlined in the law or contract.
Pretty Much Every Situation: If you are considering any restriction that is not based on safety, legal, or contractual reasons – assume you cannot restrict an owner’s access.

Conclusion

The answer to the question: “When can a general contractor close access to the owner?” is rather simple – you usually can’t.

Owners are owners for a reason. It’s their property, so it makes no sense that a contractor would be able to refuse access to them.

Except for rare circumstances – or if it’s outlined in the contract – general contractors should act with the assumption that they cannot prevent owners from accessing their site. The only time you can really prevent an owner from accessing their property is in extreme circumstances – health and safety issues or situations where law enforcement is forcing you to shut the site down.

Can a Contractor Put A Lien On My House?

Most people who own their own homes – and thereby, have to hire contractors to build, fix, or otherwise modify their properties – have absolutely no issues with their contractors. Most contractors are trusted professionals in their fields and have no intention of delivering anything less than what they’ve agreed to in the contract.

But there are always exceptions. Especially in states that don’t require contractors to be licensed, or are lacking in general oversight, there are definitely a share of contractors who have less-than-honorable intentions with taking on your job.

In situations where there’s a dispute over the work done (or not done) and the payment for said work, the idea of a mechanics lien often comes up in the conversation. You may have heard someone say: “they can put a mechanics lien on your house” in case of nonpayment for contracting services.

Is that true? Can any contractor put a lien on your house in the case of a pay dispute? And if so, what are the consequences of having a lien put on your home?

Let’s find out.

Mechanics Liens: An Overview

So what is a mechanic’s lien?

According to the CSLB, a mechanics lien is a “‘hold’ against your property, filed by an unpaid contractor, subcontractor, laborer, or material supplier, and is recorded with the county recorder’s office. If unpaid, it allows a foreclosure action, forcing the sale of the property in lieu of compensation.”

In simpler terms, a mechanics lien is a legal claim made by contractors, subcontractors, laborers, and material suppliers against a property when they haven’t been paid for their services or supplier. This is a recourse for anyone in the construction industry to receive payment for services rendered, but not given.

If you’re a contractor, you know you’re often paying out of pocket for materials and other supplies – which you then recoup when you are paid for the work done. A mechanics lien is a way to make sure that you aren’t out whatever you spent to get the job done in case of non-payment.

The mechanic’s lien is a legal measure that ensures construction professionals receive their due compensation for the work done or materials provided. It serves as a safety net for every person in the construction industry, ensuring that hard work (and all the costs associated with it) doesn’t go unpaid.

Who Can File a Mechanic’s Lien?

In California, basically, anyone involved in a construction project can file a mechanics lien in the case of non-payment.

This includes general contractors, subcontractors, laborers, and material suppliers. If you’re a general contractor and you don’t get paid by the client – you can file a lien. If you’re a roofer who did one day of work on a job, were paid, but less than the amount in the contract – you can file a lien.

However, all of these different roles and situations have different rules and procedures for filing a mechanics lien. It’s not a one-size-fits-all process, and understanding the nuances can be crucial in ensuring the lien is filed correctly and effectively.

How To File A Mechanic’s Lien

Step 1: Send A Preliminary 20-Day Notice

Before a mechanics lien can be filed, the first step is to serve a Notice of Right to Liens, often referred to as the Preliminary 20-Day Notice.

This notice must be served within 20 days of starting work or supplying materials to the project, whichever. If you miss the 20-day window, you can still serve the notice to recoup the costs of the project – but only money earned within the previous 20 days can be included in the lien.

That means if you only worked one day, but you let the 20-day window expire, you’re out of luck. If you worked, say, 5 days on a job, and you filed 21 days after the start, you’d only be entitled to 4 days of work – that first day’s wages are now unretrievable as you missed the 20-day window.

This step is crucial as it sets the stage for the filing of the lien and informs all parties involved of the potential claim. You should be filing this notice on every job, just to be safe. MAKE SURE that you file it before the 20-day deadline is up, as you will be unable to recoup any money spent after that time frame.

Step 2: File The Mechanic’s Lien

Once the Preliminary 20-Day Notice has been served, the next step is to file the mechanics lien. In many cases, you’ll never even have to do this, but everyone gets done over once by some unscrupulous construction “professional” at some point.

In California, you have 90 days from the last day you performed work or provided goods on the project to file your mechanics lien. This is different from the 20-day Notice, of course – which is a warning that you could file a lien if you’re not paid.

Now, you’re not being paid, and you have up to 3 months to file a mechanics lien to get repaid. If you let this time go by without filing a mechanics lien, the party that owes you money for your work and supplies is no longer legally liable to pay you.

Notice of Completion Or Cessation: 60 Days To File

One important exception to the 90-day window to file your mechanic’s lien for backpay or supplies is if the owner files a notice of completion or cessation, indicating the project has stopped.

In case of a filing of a notice of completion or cessation, you only have 60 days from the filing of that notice to file your lien. You will see this often on projects with tenuous funding or in times of upheaval. Make sure you’re paying attention to the people who owe you money, and get that mechanic’s lien filed ASAP.

Every day you wait is you potentially losing money you’re owed!

Step 3: The Chips Fall

Once a mechanics lien has been filed, then the pain begins. For the homeowner, at least.

Any homeowner who has a mechanics lien filed against them will have their property immediately impacted. In some cases, they may have their home foreclosed to recoup the payments. In other scenarios, a homeowner may be forced to pay twice the original amount.

At any rate, a homeowner with a lien against their home will have a very difficult time selling, refinancing, or doing many things that property owners need to do. Basically, a lien on someone’s home makes it extremely difficult to do anything substantial with that home – until the lien is cleared.

Once the homeowner completes the lien and pays the outstanding balance, the lien is quickly dropped and both the homeowner and the contractor can continue on with their lives. As you can imagine, this process is good for no one in the process – and ultimately it may feel like a Pyrrhic victory, having had to deal with months of back and forth and legal work.

The Importance Of Following Through

Even if you don’t plan to foreclose on the lien, it’s best to go through the entire procedure of filing a mechanics lien on every project. It’s important that you make the mechanics lien an essential part of your business, as it only serves to protect you and your company.

If payment discussions break down or your customer appears headed toward insolvency, your diligence will have made it possible for you to foreclose on the lien and retrieve any funds that you’ve invested. There really is absolutely no reason for you not to be on top of this, personally and with anyone working under you.

In the case of non-payment, if you don’t have a mechanics lien, things get A LOT more difficult if you want to get your money. Considering how easy the process is, there’s absolutely no excuse to not follow this entire process for every job you take on.

In any situation, whether you’re the homeowner or the contractor, it’s important to contact a legal professional to handle these complicated situations. A lawyer can be an invaluable resource when it comes to properly navigating the complex and labyrinthine American legal system.

The key takeaway from all of this is to do your diligence ahead of time – and you’ll always be prepared when the worst happens.

Additional Reading

CSLB – Preventing Mechanics Liens (great source of nitty-gritty information!)
CSLB – Understanding Mechanics Liens

Contractor Warranties: What California Contractors Need to Know

Implied, express, or contractual – warranties are a critical part of contract law that ALL California contractors need to know to be successful.

Sure, one can say “I’m a contractor and not a lawyer!” and while that’s true, it’s also essential that you understand the basics of a contract, to make sure you don’t get burned by sketchy subcontractors or ruthless clients – both of which want to get the most value for the least money.

With that in mind, let’s take a look at warranties for contractors – what they are, what they do, and why you need to know them to be successful as a California contractor.

What Is A Construction Warranty?

In California, a warranty is a legally enforceable assurance provided by a contractor to a client regarding the quality, functionality, and durability of the work delivered.

Warranties in the construction domain serve to uphold professional standards, protect consumer rights, and provide a framework for action and remuneration in case of construction defects or non-compliance with specified standards.

It serves as a pledge that the delivered project will adhere to the specified standards, and should any issues arise within a stipulated period post-completion, the contractor will rectify them at no additional cost to the client.

In legal terms, a warranty refers to a guarantee or promise enshrined within a contract, under which the contractor assures the quality, performance, or condition of a particular subject matter to the client. Warranties also stipulate the consequences of construction defects, legally outlining what a contractor must do in the case of a construction defect.

What Does A Construction Warranty Do?

Warranties, at their very basic level, are legal protections that protect both the contractor and the client by outlining all of the responsibilities of both parties – and the consequences for violating the terms both parties agreed upon.

Contractual Assurance: A warranty is a contractual assurance wherein the contractor guarantees the quality and compliance of the job. This could range from the materials used, the workmanship quality, to the project adhering to local building codes and regulations.
Binding Obligation: Once a warranty is stipulated within a contract, it becomes a binding obligation, enforceable in court. The contractor is now legally bound to honor the warranty, failing which could result in legal repercussions.
Remedial Action: The primary purpose of a warranty is to provide a remedial course of action in case the delivered work doesn’t meet the specified standards. Warranties exist to protect the client, by outlining the specific steps a contractor must take to fix a contractual violation.
Risk Allocation: On the flip side, warranties also protect contractors by defining the extent to which contractors are liable for defects or issues arising post-construction.

Types of Construction Warranties

Express Warranty: This is a clearly articulated assurance provided by the contractor regarding specific aspects of the construction project. This is essentially any warranty or guarantee a contractor puts in a contract. It specifically and granularly outlines the things they promise to deliver to the client and the timeframe they’ll fix any problems that crop up.
Implied Warranty: Unlike express warranties, implied warranties are not explicitly stated but are implied in the very nature of construction. By taking on any construction job, a contractor is tacitly agreeing to these warranties. There are two types of implied warranties in the United States.
- Workmanship Warranty: guarantees that any construction project will be built in a good or workmanlike manner, free of major defects. This includes both labor and materials.
- Warranty of Habitability: guarantees that any construction project will be suitable for the purpose they are intended for and be safe to live in.
Statutory Warranty: These are warranties determined by the state. Statutory warranties do one thing: they specifically outline the amount of time that contractors are liable for any construction defects.

Common Construction Warranties In California

Warranties in California cover a spectrum of durations and construction aspects, and they can vary from industry to industry and home to home. Here’s some of the main ones you’ll come across in your career as a California contractor.

General Warranties

Mandatory Warranties: Contractors in California are obligated to provide warranties on their work, such as a 4-year warranty on installed items, a one-year warranty on the fit and finish of certain areas, and a guarantee against defects in compliance with building codes and manufacturer requirements.
State Law: Notable legal codes include California Civil Code 900, which requires one-year expressed limited warranties for both new construction and remodeling projects, and the Right to Repair Act (California Civil Code 896, et seq.), which includes implied warranties into the one-year warranty requirement.
One-Year Warranties: These short-term warranties cover aspects like “fit and finish” of certain elements, “manufactured products,” compliance with “interunit noise transmission standards,” and irrigation, drainage, and landscaping systems.
Two to Five-Year Warranties: These cover medium-sized problems, like untreated wood posts, dryer ducts, plumbing, sewer, electrical systems, exterior pathways, and paint and stains causing deterioration.
Ten-Year Warranties: Ten-year warranties are all about foundational and structural elements. Ten-year warranties ensure long-term accountability on the construction elements most critical to human safety.

Notable Court Cases Involving Warranties

When it comes to contractor contracts, looking to existing court cases is a good way to learn about the system, so you can prepare yourself for even the worst-case scenario.

1. Moore v. Teed

Moore v. Teed was an interesting case about contractual fraud and construction defects, with a big emphasis on the legal application of Business and Professions Code §7160. In the case, a homeowner was suing a contractor for damages because the contractor severely overpromised… and underdelivered to the tune of $300,000.

This ruling gives homeowners more leverage over contractors who promise the world and don’t deliver. In the case, the court ruled that homeowners are entitled to the “image that the contractor promised” when selling their services. In other words, a contractor is liable for the promise of the project made by the contractor and is due damages equal to the promise made to the client – whether it’s in writing or not.

2. Howard Contracting, Inc. v. G.A. Macdonald Construction Co., Inc.

This landmark case made it to the California Supreme Court and set a precedent that allows subcontractors to recover damages for cost overruns caused by delays and disruptions – even if there’s stipulations in the prime contract barring such claims.

The civil ruling changed things for both subcontractors and contractors in California by giving subcontractors the option to sue for – and receive – damages for any out-of-pocket costs or expense overruns caused by delays. The key thing is that even if the prime contract states the prime contractor isn’t liable for damages, they are still liable for damages.

3. Aas v. Superior Court Of California

In this massive 2000 ruling, the California Supreme Court delineated the boundaries of negligence claims in construction defects scenarios. The court ruled that homeowners could not recover damages for construction defects that hadn’t caused property damage. It seems obvious, but before then, there was no legal precedent protecting contractors against

This ruling set a significant precedent on the scope of liability for contractors and developers, finally establishing precedent that homeowners can’t sue contractors for damages related to construction defects…. without actually suffering damages related to construction defects.

It’s wild that we even have to type that…but here we are. Thanks to this court ruling, contractors and the state of California must have saved millions in legal fees from baseless lawsuits.

California Contractors: Get To Know Your Contracts!

As you can see from these court cases, it’s critical for any contractor to know what’s in their contracts – and what’s excluded from them. Any contractor who is too lazy to learn at least the basics of contract law is a contractor who will find themselves in trouble at some point down the road.

We hope this guide serves as a good jumping-off point for your contracting business – now’s the time for you to dig deeper into your own personal situation to make sure you’re covering all your bases and setting yourself up for success as a California contractor.

Additional Reading

California State Licensing Board
Levelset – Warranty requirements for contractors in California
Esquire REB – New Construction Warranties Provided By California Law
Valley Contractors Exchange – New Construction Warranties
Stone Sallus – Construction Defect Claims in California: Understanding Your Options
FreeAdvice – California Contractor Warranty Form
Smith Currie – New California Construction Laws for 2023

How To Go From A Construction Manager To A Licensed Engineer

Construction management is a difficult, demanding profession – it involves long days at the job site in every weather imaginable, putting out fires from sun-up to sun-down (and often all the time in between!).

If you’re a construction manager yourself, you may be thinking: why not just become an engineer? In many cases, you already have 90% of the skills of an engineer; you just lack the mathematical education and skills and the licensing requirements to become an engineer – and enjoy the quality-of-life perks that come with it.

But becoming an engineer as a construction manager isn’t the most straightforward or easy path. It requires years of hard work and planning to fulfill that dream – but it’s not impossible! With that in mind, here’s our guide to the easiest way to become an engineer as a construction manager!

Understanding the Roles: Construction Manager vs. Engineer

Before diving into the transition process, it’s essential to understand the distinct roles of a construction manager and an engineer.

Construction Manager: Primarily responsible for overseeing the day-to-day operations of a construction site, ensuring that projects are completed on time, within budget, and adhering to set standards. Their education typically includes a degree in construction management, civil engineering, or construction science.
Engineer: These professionals design the initial planning and blueprints for construction projects and ensure that their directions are followed throughout the project by regularly communicating with construction managers and other stakeholders. Engineers usually work from an offsite main office, overseeing the broader aspects of planning a construction project1. Depending on the complexity of the project, engineers may have a smaller part of the process as the project progresses.

Practical Steps to Transition

Okay, so how do you transition into an engineering career as a construction manager? Well, get ready to go back to school, as you need to get a degree in engineering to get started! You need a bachelor’s degree to get any real job as an engineer on a construction project. This is obviously for safety reasons – engineers are responsible for ensuring the physical safety of their buildings.

A bachelor’s degree in engineering provides you with the comprehensive knowledge needed to operate as an engineer in the real world – ensuring construction projects are safe and within the boundaries of physical law. You learn everything from math to design – all critical skills for engineers.

Earn a Relevant Bachelor’s Degree: The first step to becoming a civil engineer is to earn a bachelor’s degree from a program that offers a construction engineering program. A good engineering program typically has accreditation from the Engineering Accreditation Commission of the Accreditation Board for Engineering and Technology (ABET).
- - Engineering schools like Rensselaer Polytechnic Institute in Troy, NY can be a great place to go for a streamlined, proven engineering course.
Get A License: To practice as an engineer, you don’t technically need a license, but in reality, you do. If you’re a civil engineer, you must obtain a Professional Engineer (PE) license. Μuch like getting any other CSLB license, this includes four years of experience operating as a “journeyman” engineer under a licensed engineer. In addition to licenses for civil engineers, most states require specific licenses. All of these routes require you to pass engineering exams as well. The steps to licensing are:
- - Passing the Fundamentals of Engineering (FE) exam.
  - Completing four years of progressive engineering experience under a PE.
  - Passing the Principles and Practice of Engineering (PE) exam.

In many cases, you have to apply for and receive a state license from your state. There may even be state and local requirements as well.

Skills Needed for Engineers

Transitioning to an engineering role requires a blend of technical and soft skills. Luckily, if you’re a construction manager, you have all the necessary soft skills needed, in addition to knowing the ins and outs of construction – something that gives you a huge advantage in understanding and communicating logistical realities to clients and higher-ups.

The key difference in skills needed is your engineering skills – the knowledge and understanding of the mathematics and physics needed to construct a building that is safe and fit for humans, meets local codes and bylaws, and may even need to be sustainably developed.

Total understanding and control of physics such as dynamics, mechanics, tension and more.
Strong mathematical skills such as calculus and geometry, with the ability to apply them.
Design skills such as blueprinting, conceiving, and sketching.
Proficiency with design and visualization programs like AutoCAD and TileFlow.
Programming skills to get maximum value from design tools such as SolidWorks and AutoCAD. In the electrical and mechanical engineering fields, specialized programming languages such as MATLAB and RAPID are often used.
Specialized construction knowledge of common high-use projects like roads, tunnels, bridges, and so on.
Ability to accurately estimate cost and communicate trade-offs when it comes to materials and design.
Knowledge of sustainable and energy-efficient materials and their properties with regard to construction.
Ability to effectively communicate the project to stakeholders.
A consistent ability to problem-solve real-world problems posed by the physical and material challenges of production.

Similarities and Differences Between Construction Managers and Engineers

Similarities

Both roles are the backbone of the construction process. Without either of them, no building gets built.
Both demand a profound understanding of construction principles and practices, on both a macro- and micro-scopic level.
Effective and consistent communication is the key in both roles, especially when coordinating with other professionals and stakeholders.

Differences

Engineers have more stringent education and licensing prerequisites, with a stronger emphasis on the mathematics and physics of construction.
Engineers are involved early on in planning and design, well before anything is touched on a job site. Construction managers take the plan and make it happen – they are the day-to-day torchbearers on a job site.
Engineers are generally much more mathematical and “brainy” than construction managers, and their work is much less ambiguous than construction managers. CMs are constantly working with the human side and the day-to-day work, which means they’re doing less math and less time in an office chair.
Engineers may never step foot on a job site, often working from the comfort of an office. Construction managers are pretty much on the site from the beginning of the project all the way to the bitter end.

Engineering vs. Construction Management Salaries and Economic Impact

It may surprise you that, in general, it is more lucrative to be a construction manager than an engineer!

As of May 2022, the median annual wage for construction managers was $101,480. The employment of construction managers is projected to grow by 5% from 2022 to 2032, which is faster than the average growth rate for all occupations. This indicates approximately 38,700 job openings for construction managers each year over the decade.

On the flip side, civil engineers (the best representation of this diverse career) had a median annual wage of $89,940 in May 2022. The employment landscape for civil engineers is projected to burgeon by 5% from 2022 to 2032. This signifies about 21,200 openings for civil engineers each year, on average, over the decade.

However, it’s important to keep in mind that financial compensation is only one piece of the puzzle when deciding one’s career. A construction manager is often in the trenches with their team, dealing with rain, snow, wind, and all sorts of weather conditions, at all hours of the day, often working long days to make sure everything runs smoothly.

Engineers, on the other hand, are generally white-collar jobs. Engineers generally work regular hours from the comfort of an air-conditioned office. With a difference of ~$10k, it makes sense for a lot of seasoned CMs to want to change to something that’s a little less demanding. You may be one of these people!

Transitioning to a Licensed Engineer in California: The Golden State’s Path

As always, let’s take a look at the process for construction managers in California looking to change course and become an engineer in the Oldie Goldie State.

Steps to Become a Licensed Engineer in California:

Pre-Application Requirements:

Before applying for licensure, ensure you’ve passed the NCEES Fundamentals of Engineering (FE) exam and the Principles and Practice of Engineering (PE-Civil) exam.
Confirm that you meet the qualifying experience requirements set by the state.

FOR CIVIL ENGINEERS ONLY – APPLY TO BPELSG

Once you’ve passed the necessary exams and have the required experience, submit your application for licensure to the California Board of Professional Engineers, Land Surveyors, and Geologists using the online BPELSG Connect portal.
California requires additional state-specific exams: Civil Seismic Principles and Civil Engineering Surveying.
These exams are offered on a continuous quarterly basis, and there’s no final filing date.

Get Your CSLB License

Now you need to apply for your CSLB Class A General Engineering Contractor License!
As always, you have to meet the CSLB’s licensing requirements before applying.
Then, you just have to pass the CSLB exam and get the necessary bonds and insurance
Receive Your License And Start Working!

Once you’ve passed the CSLB exam, you can start working as an engineer right away!

Additional Information:

For Civil Engineers – Three Types Of BPELSG Licenses: BPELSG California offers three categories of licensing for engineers:
- - Practice act (Civil, Electrical, and Mechanical Engineering)
  - Title act (Agricultural, Chemical, Control Systems, Fire Protection, Industrial, Metallurgical, Nuclear, Petroleum, and Traffic Engineering)
  - Title authority (sub-branches of Civil Engineering: Structural Engineering and Geotechnical Engineering).
Eligibility and Experience Requirements: Applicants must meet the qualifying experience requirements outlined in Business and Professions Code sections 6751(c) and 6753 and Title 16, California Code of Regulations section 424.
Background Check and Fingerprinting: All applicants are background checked and fingerprinted by the CSLB before they are given a license. Check out our comprehensive article on that topic for more information.

Should I Become An Engineer As A Construction Manager?

The answer to that question can only lie within. The reality is that construction managers do make a bit more money, but the trade-offs of having set, reliable hours, and working off-site (or even from home!) means that it could be absolutely worth it for you and your family to make the transition to engineering.

If you’re looking to become an engineer in California, we’ve got you covered with everything you could need to know about what it takes to become a CSLB-certified construction engineer in our great state.

A Comprehensive Guide To ADU Builds For California Contractors

Accessory Dwelling Units (ADUs) have emerged as a huge economic opportunity for both homeowners and contractors alike. The ADU market in California has experienced unprecedented growth, evidenced by a 50% increase in permit applications in 2022 compared to the preceding year. There’s a reason why – it represents a huge opportunity for both contractors and homeowners alike.

With bill after bill of pro-ADU legislation coming through the California legislature, the state is definitely making it easy for people to offer ADUs on residential property. If you’re a builder looking to take advantage of this new market or a person looking to make a little bit of extra cash, an ADU looks like an enticing opportunity. But make no mistake – building an ADU is no joke. It requires a lot of work, a lot of money, and a lot of regulatory legwork.

If you’re someone looking to build an ADU, either for yourself or your client – this guide will cover everything you need to know about ADUs and what it means to actually build one or enter the market as a specialty ADU contractor.

A Closer Look at the Historical Evolution

The trajectory of ADUs in California is marked by significant legislative milestones, each contributing to easing housing shortages. The introduction of Senate Bill 1069 in 2017 was a game-changer, relaxing parking and utility fee requirements and thereby catalyzing ADU developments.

Assembly Bill 68 in 2021 further expedited the approval process and allowed for multiple ADUs on single-family lots, setting the stage for a thriving ADU market with contractors steering this transformative shift

Navigating the intricate regulatory framework is paramount for contractors. The California Department of Housing and Community Development (HCD) outlines comprehensive guidelines encompassing zoning, size, and design, with local jurisdictions adding another layer of specificity. Contractors must meticulously consider:

Zoning Requirements: Adherence to varying local zoning ordinances is crucial, dictating the permissible locations for ADU construction and often adding to the cost.
Size Limitations: With a typical cap at 1,200 square feet, size regulations demand careful attention, considering the lot size and local variations.
Local Design Standards: Compliance with local design standards ensures that ADUs stay within local building codes like heights and lawn care.

Innovations and Trends: Crafting the ADU of Tomorrow

Innovation is at the heart of ADU construction, with contractors employing advanced technologies and sustainable methodologies to meet the evolving market expectations. Emerging trends include:

Sustainable Building Practices: The incorporation of features like solar panels, rainwater harvesting systems, and energy-efficient appliances is becoming the norm, reflecting California’s sustainability goals.
Modular Construction: The rising popularity of modular construction offers a blend of cost efficiency and time-saving benefits.
Smart Home Integration: The integration of smart home technologies enhances the appeal and functionality of ADUs, aligning with modern living expectations.

Statistics About the ADU Market in California in 2023

The ADU market in California in 2023 has witnessed significant developments, reflecting the evolving legal and economic landscape. Here are five noteworthy statistics:

Permit Applications: There has been a 60% increase in ADU permit applications in California in 2023 compared to the previous year, indicating heightened interest and activity in the ADU market.
Construction Costs: The average construction cost of an ADU in California is approximately $200,000, varying based on size, design, and location.
Rental Rates: Rental rates for ADUs in California have seen an average increase of 8%, making them a lucrative investment for homeowners.
Sustainability Trends: Approximately 70% of new ADUs constructed in 2023 have incorporated sustainable building practices, reflecting the growing emphasis on eco-friendly living.
Financing Options: The availability of ADU-specific financing options has increased by 25%, providing homeowners with more avenues to fund ADU construction.

Best Tips for Contractors Who Want to Enter the ADU Market

Establishing yourself in the piping-hot ADU market in California presents a golden opportunity for contractors. While every contractor’s situation is different, here are some general tips that will put you in the right direction when it comes to ADUs.

Stay Informed on Regulations: Regularly update knowledge on state and local ADU regulations to ensure compliance and stay ahead of any legislative changes.
Specialize in Sustainable Practices: Embrace and specialize in sustainable building practices to meet the growing demand for eco-friendly ADUs.
Build Relationships with Local Authorities: Foster relationships with local planning and zoning authorities to facilitate smoother permit applications and approvals.
Offer Customized Solutions: Provide tailored ADU designs and solutions to cater to the diverse needs and preferences of homeowners.
Engage in Community Outreach: Actively engage with communities to address concerns, build trust, and establish a positive reputation in the ADU market.
Budgeting and Financing: Providing accurate cost estimates and assisting homeowners in navigating financing options, such as ADU-specific loans and grants, is essential.
Site Assessment: Comprehensive site assessments identify potential challenges related to topography and utility access, enabling preemptive solutions.

Pros and Cons of Hiring a Contractor to Build Your ADU

As a homeowner, deciding whether to hire a contractor for your ADU build is probably the most important step you’ll make when building an ADU, because, obviously, you’re going to be the one building it if you don’t hire someone to build it!

Obviously, we think that most people would benefit from having a contractor build your ADU, but here are some pros and cons of bringing on an expert to take care of the building of your ADU property.

Pros

Expertise and Experience: Contractors bring a wealth of experience and expertise in construction, ensuring that the ADU is built to high standards and complies with all applicable regulations.
Streamlined Permitting Process: Navigating the permitting process can be challenging. Contractors are familiar with local ordinances and can streamline the application and approval process, saving homeowners time and hassle.
Quality Assurance: Hiring a contractor provides quality assurance, as they are accountable for the workmanship and must adhere to industry standards, reducing the risk of construction errors and subsequent costs.
Time Efficiency: Contractors manage the construction timeline efficiently, coordinating with subcontractors and suppliers, which can expedite the building process compared to a DIY approach.
Less Stress: Building an ADU can be stressful. Having a contractor manage the project alleviates the burden on homeowners, providing peace of mind throughout the construction journey.

Cons

Cost Implications: Hiring a contractor can be more expensive than a DIY approach due to labor and management costs. Homeowners need to weigh this against the potential costs of mistakes and delays if they were to manage the project themselves.
Less Personal Control: While contractors consult with homeowners, there may be less personal control over every detail of the construction process, which might be a drawback for those who prefer a hands-on approach.
Potential Communication Gaps: Homeowners may experience communication gaps or misunderstandings with the contractor, which can affect the project’s outcome. Clear and consistent communication is essential to mitigate this risk.
Finding the Right Fit: Identifying a reliable and qualified contractor can be time-consuming. Homeowners need to conduct thorough research, check references, and obtain multiple quotes to find the right fit for their project.
Contractual Disputes: There is a risk of disputes arising over contractual agreements, such as costs, timelines, or work scope. A well-drafted contract and open communication can help prevent and resolve any issues.

The Final Word

If you’re a contractor looking to get into ADUs, now is the time. The longer you wait to become a trusted ADU contractor in your area, the more competition there will be when you finally take the plunge.

The good thing is you don’t need a specific CSLB license to build an ADU – at the very least, you only need a Class B license, or, if you’re a homeowner modifying your own property, and the materials cost less than $600, you can build your own ADU. We have to be honest, though, that’s unlikely unless you’re just installing a new shelf or something. Considering the average cost of an ADU is $200,000, that’s highly unlikely.

Additional Reading

LA Times – Deep Dive on ADUs
California Legislative Information – Senate Bill 1069
California Legislative Information – Assembly Bill 68
California Department of Housing and Community Development – ADU Handbook
Terner Center for Housing Innovation at UC Berkeley – The State of ADUs in California
California Contractors State License Board – Owner-Builder Responsibilities
California Department of Housing and Community Development – ADU Construction and Financing
California Housing Partnership – ADU Market Trends and Statistics
U.S. Green Building Council – Sustainable ADU Construction in California

New Laws for California Contractors in 2023

We’re always hearing stories from former clients and current contractors that they’re seeing frequent violations of new contractor laws that just came into effect this year, in 2023.

There are a ton of new laws that are – to be frank – absolutely critical to know as a contractor, no matter your classification, location, or size. Any violation of these new laws carries serious penalties – including time in jail for repeat offenders.

Arm yourself with the knowledge and take the steps necessary to protect your business by becoming familiar with the following pieces of new legislation.

Senate Bill 216 (Dodd)

If you’re a concrete, HVAC, Asbestos or Tree Service contractor in California – listen up!

Senate Bill 216 (SB216), which amends the Business and Professions Code (BPC) Section 7125, is a piece of legislation that requires 5 Class “C” contractors to carry workers’ compensation insurance, even without employees.

This mandate means that contractors with a C-8 Concrete, C-20 Heating, Warm-Air Ventilating and Air-Conditioning, C-22 Asbestos Abatement, or D-49 Tree Service license must have valid workers’ compensation insurance by January 1, 2023.

And as a note to all contractors of all classifications: by January 1, 2026, all contractors must have valid workers’ compensation insurance, irrespective of whether or not they have employees.

The only exception to the new CSLB workers’ comp requirements is joint ventures without employees. Anyone with this structure of business is exempt from SB 216’s workers’ comp requirements.

Senate Bill 607 (Min)

In another insurance-related move, the California Senate passed Bill 607 (SB 607), which marks another important change in the requirements to hold a CSLB license. It updates numerous sections of the BPC – with one huge change in bond amounts.

SB 607 mandates that the CSLB qualifier, license, and minimum disciplinary bonds be raised from $12,500 and $15,000, respectively, to $25,000 for all three bonds as of January 1, 2023.

As a bonus for the families of military members looking to become licensed contractors, SB 216 also requires the Department of Consumer Affairs (DCA) boards and bureaus (including the CSLB) to waive application and license fees for military family members.

What if I Don’t Have Workers’ Compensation Insurance Or My Bond Amount Is Insufficient?

If you are currently in one of the above classifications and you do not have workers’ comp or a sufficient bond amount…well, we’ve got bad news for you: your license is surely suspended.

Don’t panic – just stop doing work entirely if you are still doing it. This is critical as you can face serious legal consequences for working without a license.

Next, you should immediately begin the process of getting the necessary workers’ compensation insurance and/or increasing your bond amount. Once that is sorted out, you can re-apply for your license.

If you’re unsure or don’t remember if you have workers’ compensation insurance, you should immediately check your license status.

Senate Bill 1237 (Newman)

Huzzah for troops-turned-contractors – SB 1237 is here to waive any renewal fees!

Senate Bill 1237 (SB 1237) updates the current law that requires DCA boards, including the CSLB, to waive renewal fees for a licensee who is called to active duty as a member of the U.S. Armed Forces or California National Guard.

This applies if the licensee or registrant is stationed outside of California. The new law expands the definition of “called to active duty” and extends it to licensees on active duty during a “state of insurrection” or a “state of extreme emergency.”

Assembly Bill 2105 (Smith)

In another move that will have veteran contractors excited, Assembly Bill 2105 (AB 2105) mandates a 50% fee reduction for an initial license or registration fee for all veterans!

All you have to do is provide paperwork proving you are a veteran who has served as an active-duty member of the United States Armed Forces, including the National Guard or Reserve components and was not dishonorably discharged.

For HIS contractors, this still applies to you as well! This applies to all initial license fees for anyone acquiring a CSLB license.

Assembly Bill 1747 (Quirk)

Assembly Bill 1747 (AB 1747) increases the civil penalty from $8,000 to $30,000 for every violation of BPC Section 7110 (savvy legal contractors will know these are building code violations) and amends Section 7099.2 (how much in penalties violators will pay).

This bill expands BPC 7110 to include failure to comply with certain health and safety laws, water laws, safe excavation requirements, pest control requirements, illegal dumping, and other state laws related to building and insurance requirements.

Assembly Bill 2374 (Bauer-Kahan)

Bad news for litterbug contractors: your time is up.

Assembly Bill 2374 (AB 2374) amends Penal Code Section 374.3 and now requires courts to notify CSLB or other DCA boards or bureaus when a licensee is convicted of an illegal dumping crime. This is so the board can publish the conviction on their website.

The bill also increases the fines a court may impose for this crime, which is great for everyone everywhere. In a double-swoop of awesome for contractors who like to do the entire job right, it also requires the court to order a person convicted of dumping commercial quantities of waste to remove or pay for the removal of, the waste matter that was illegally dumped. Which, again, is an absolute win for everyone involved.

Assembly Bill 2916 (McCarty)

Assembly Bill 2916 (AB 2916) amends BPC Section 7124.6 and modifies the CSLB Letter of Admonishment (LOA) program to allow CSLB to determine whether it should be issued for one or two years, rather than the current one-year limitation.

In making that determination, CSLB is required to consider the gravity of the violation, the good faith of the licensee or applicant being charged, and the history of previous violations.

This is a pretty technical bill and to be honest, it remains to be seen how it will affect contractors. It seems to really only affect disciplinary actions, which affect only a small number of contractors. We’ll keep you posted on how it develops.

Stay Compliant…Or Else!

These new laws have serious consequences for any contractor that is non-compliant and remember: Ignorantia juris non excusat – ignorance of the law does not mean you are free from the consequences of violating it.

And in the CSLB’s case – the punishments are extremely severe for anyone violating contractor law in California. So don’t do it!

Save Money On Your Taxes As A California Contractor

As a licensed contractor, you’ve got enough on your plate with high-pressure deadlines and constantly shifting targets to hit. The last thing you need is to be buried under a mountain of tax paperwork, trying to make heads or tails of any of it!

With so many moving parts and costs, it can feel impossible to navigate the complicated labyrinth that is the US and California tax codes.

With these simple tips, however, you can easily and quickly make sure you’re maximizing your tax savings.

How Do You Structure Your Business?

Before diving into tax requirements, it’s crucial to understand how your business structure influences your tax obligations.

You probably already know this information, but it’s important to restate it here so that we have a good starting point.

Sole Proprietorship: As a sole proprietor, you’ll report business income on your personal tax return. Keep track of expenses and income throughout the year so you can report them when tax day comes. Many, if not most contractors, are sole proprietors.
Partnership: Income and losses are passed through to individual partners. Partners report their share on personal tax returns. Rarely are contractors partnerships, but in cases where it is a family business, you may see it.
LLC: Limited liability companies offer flexibility, allowing owners to choose their tax classification (e.g., sole proprietorship, partnership, or corporation). The second-most common form of business structure for contractors.
Corporation: Let’s be honest, if you’re a big enough construction company that you need corporation status to maximize your tax benefits, you either already know how to best file your taxes, or you have an accountant who handles your voluminous balance sheet.

Choose a structure that best suits your business needs and tax goals. Most construction professionals, as previously mentioned, will find sole proprietorships to be more than enough to fulfill their tax needs and will find the most savings there. But the more you grow, the more you’ll need the protection of LLCs and partnerships or corporations.

Know Your Taxes: Federal, State, and Local

Federal Taxes

There’s no escaping Uncle Sam. Always pay your taxes in full – you do not want the IRS sniffing around your business, causing trouble, when you could just take care of it ahead of time by educating yourself and planning effectively.

Income Tax: All businesses must file an annual income tax return. Tax rates and filing requirements depend on your business structure.
Self-Employment Tax: Self-employed contractors who operate as sole proprietors have to pay self-employment tax, which covers Social Security and Medicare taxes.
Estimated Tax: Again, if you are a sole proprietor (working as a 1099 employee), you may need to make quarterly estimated tax payments if you expect to owe tax of $1,000 or more when filing your return.
- - You don’t have to make these payments, but they will lower your tax burden at the end of the year.

State Taxes

It’s no mistake – California has high taxes. Make sure you’re keeping enough cash on hand to pay when April comes around; or, if you’ve got the right tax plan, get ready to get a rebate.

Either way, you can prepare yourself to file your state taxes as a California contractor by checking out the Franchise Tax Board’s website.

State Income Tax: If you’re doing business in California, you have to pay an income tax. You can find how much you expect to pay based on your revenue. Here is the Franchise Tax Board’s tax bracket.
Sales Tax: California has a sales tax, so you’ll be paying tax on things like materials and payments to any subcontractors or yourself.
Employment Taxes: If you have employees, you may need to withhold state income tax and pay state unemployment tax.

Local Taxes

Local tax requirements depend on where in California you’re operating. These local taxes can come in many forms, like business licenses or filing fees. Be prepared to pay local taxes when starting a new construction.

Employment Taxes: A Responsibility You Can’t Ignore

If you have employees, you must withhold and pay employment taxes. These include:

Federal Income Tax Withholding: Based on the employee’s Form W-4 and their earnings. This will fluctuate based on the number and types of employees you have. You are exempt from paying taxes for contract workers who file Form 1099.
Social Security and Medicare Taxes: Employers and employees share responsibility for Social Security and Medicare taxes.
Federal Unemployment (FUTA) Tax: Every employer must pay FUTA tax, which provides unemployment compensation to workers who lose their jobs.
State Unemployment Tax: You must also pay into California’s unemployment fund if you have full-time employees. This will also be a variable cost for your business as you grow.

Tax Deductions: Your Best Friend

If you’re a contractor, you probably can save tons of money by taking advantage of various tax deductions that are favorable to construction professionals – people who are constantly spending money on their business in order to survive.

We recommend researching these common deductions for a full scoop, but hiring a tax pro who has the expertise to successfully navigate the various deductions you qualify for is even better.

Common Deductions for Contractors

Home Office Deduction: If you use part of your home exclusively for business purposes, you may qualify for the home office deduction.
Vehicle Expenses: Deduct business-related vehicle expenses such as mileage, fuel, maintenance, and insurance.
Tools and Equipment: Contractors can often deduct the cost of tools, equipment, and supplies used in the course of business.
Contract Labor: Payments made to subcontractors are generally tax-deductible if they meet specific criteria.
Insurance: Business insurance premiums, such as general liability or workers’ compensation, can be deductible.
Training and Education: Expenses related to improving your professional skills may be tax-deductible.
Advertising and Marketing: You can deduct advertising expenses, including website development, business cards, and online advertising.

Hire an Accountant For Your Contracting Business

As we have said multiple times in this article: Hire. An. Accountant.

If you’re doing business in California as a contractor, we can’t recommend hiring an accountant. Simply put, an accountant will save you tons of time, energy, and money when it comes to filing your taxes – as well as being more likely to keep you from being audited.

The reality is that American taxes can be extremely confusing, so employing the skill of a professional accountant can help big time when it comes to saving the most money (and saving you the energy of having to understand the un-understandable).

You can even hire an accountant who specializes in California contracting taxes – saving you more money than ever before.

Taxes Can Actually Save You Money

Everyone has to pay taxes (well, mostly everyone). But by understanding and executing an effective tax plan for your contracting business, you can actually find yourself with more money in your pocket come tax time next year.

One thing we definitely can’t emphasize enough as you continue to grow your contracting business – hiring a qualified accountant or tax professional service is a critical element of maximizing your tax deductions and saving money every year.