Category Archives: CSLB News

CSLB Press Release on Ridgecrest Undercover Sting

CSLB Identifies Phony Contractors in Ridgecrest Undercover Sting
Undercover operation nets eight for contracting without a license and related violations

 

SACRAMENTO – The Contractors State License Board (CSLB) wants consumers in smaller communities and rural areas of the state to know that they’re especially vulnerable to becoming victimized by unlicensed contractors. Last week CSLB’s Statewide Investigative Fraud Team (SWIFT) investigators teamed with the Kern County Sheriffs and District Attorney Offices, and the Department of Homeland Security’s Immigration and Customs Enforcement to conduct a sting in the city of Ridgecrest.

The operation, conducted on February 3, 2011, led to the arrest of eight suspected unlicensed operators.  CSLB investigators posed as homeowners and invited suspected phony contractors to a newly constructed home near Pearson Park.  Investigators asked for bids that included landscaping, fencing, and painting.  If the bid totaled more than $500 in labor and materials and the suspect was not state-licensed, they were arrested.  Eight were given a Notice to Appear (NTA) in court to face misdemeanor charges of contracting without a license; some also face charges of illegal advertising, and soliciting an excessive down payment, also misdemeanors.  All eight will face a charge of failing to secure workers’ compensation insurance for employees.  They are scheduled to appear in Kern County Superior Court in Ridgecrest on March 29, 2011.

“This sting is a perfect example of why homeowners need to make sure the contractor they hire is properly licensed and insured.  It only takes a minute to check information on the CSLB website at www.cslb.ca.gov or www.CheckTheLicenseFirst.com,” said CSLB Registrar Steve Sands.  “If someone working on your property is injured and is not covered by workers’ compensation insurance, they could turn around and sue you for their medical bills.”

By law, anyone performing home improvement services that total more than $500 in material and labor must be licensed by the state of California.  Contractors must include their CSLB license number in all advertisements and contracts.  Those who are not licensed can only perform jobs valued at $500 or less.  Their ad must state that they are not licensed.

CSLB received critical support for this operation from one of its legitimate licensed contractors. Four of the eight arrested during last week’s sting operation were the result of leads from that licensee.

Licensees face the difficult task of competing against those who break the law by operating in the multi-billion dollar underground economy.  In addition, the loss of tax revenue takes money away from schools and law enforcement. 

“Homeowners should also know that they have little recourse against an unlicensed operator if something goes wrong with a project,” added Sands.  “That’s especially true if you give them a big down payment and they never show up to start the job.”  CSLB offers a variety of free services, including mediation and arbitration, for consumers who have a problem with their licensed contractor.

CSLB urges all California consumers to follow these tips before hiring a home improvement contractor:

  • Be especially hesitant when approached by someone offering home improvement services door-to-door.
  • Verify the contractor’s license online at www.cslb.ca.gov or www.CheckTheLicenseFirst.com, or via CSLB’s automated phone system at 1-800-321-CSLB (2752).
  • Ask to see a photo identification to verify the contractor’s identity.
  • Don’t pay more than 10% down or $1,000, whichever is less.  There is an exception to this rule for about two dozen contractors who purchase special bonds and are noted on CSLB’s website.
  • Don’t pay in cash, and don’t let the payments get ahead of the work.
  • Get at least three bids and insist on a written contract before your project begins.

CSLB Press Release 1/13/2011 : Monterey Residents Face Criminal Charges for Fraudulently Using Contractor License Numbers

Suspects using business names “Window Design” and “Fresh Paint” arraigned on 146 counts

SACRAMENTO —Daniel Kenneth Furness, 58, and Colleen Gsell, 55, pleaded not guilty in Monterey County Superior Court on January 10, 2011, to 146 criminal charges relating to fraudulent use of other contractors’ license numbers, and adverting and contracting without their own license. The charges were filed following an investigation by the Contractors State License Board’s (CSLB) Central Valley Statewide Investigative Fraud Team (SWIFT), Monterey County District Attorney’s Office, and the Monterey and Marina Police Departments.

Furness and Gsell are suspected of using contractor license numbers not held by them, instead of obtaining their own licenses from the Contractors State License Board. For example, they allegedly used license numbers belonging to other people whose business names are “Window Design” and “Fresh Paint.” Furness and Gsell have not been issued a contractor license in either of their individual names, or a license to do business in the name of a company.

“We encourage homeowners to check their contractor’s license number on the CSLB website before any work is done,” said CSLB Registrar Steve Sands. “Consumers should ask to see the state-issued pocket license and a photo identification to make sure the person they are dealing with is the person who holds the contractor license in the appropriate work classification.”

Furness and Gsell are also suspected of illegal advertising and taking excessive down payments. Contractors must display their license number when advertising for jobs valued at more than $500 for labor and materials. It is also illegal to take down payments greater than 10 percent or $1,000, whichever is less, for any home improvement project. There is an exception for about two dozen contractors who purchase special consumer protection bonds and are noted on CSLB’s website.

Even though a consumer is not legally responsible for payments to an unlicensed contractor for projects valued at $500 or more for labor and materials, Furness is charged with instituting litigation against a deceased client’s estate and making inaccurate statements in a claim of lien filed against this client’s property. A licensed contractor or material supplier is entitled to file a mechanic’s lien if the contract amount is not paid as stated in the signed contract. An unlicensed operator who has contracted for work valued at more than $500 for labor and materials has no legal standing to do so. Furness is also charged with committing perjury in an application filed with CSLB.

Furness is formally charged with three counts of perjury and three counts of filing a false document. Furness and Gsell are each charged with 54 counts of illegal use of a contractor license number not issued to them; 42 counts of contracting without a contractor license; 23 counts of illegal advertising; and 21 counts of charging an excessive down payment.

“Those contracting without a license should understand that CSLB and its partners in law enforcement will not tolerate behavior that is detrimental to homeowners and licensed contractors who are complying with state laws and regulations,” added Sands.

Important CSLB Bulletin: New Year Brings New Protection for California Homeowners

SACRAMENTO — New California construction laws and regulations passed during the 2009-2010 legislative session take effect January 1, 2011.

A key consumer protection law regarding mechanics liens (a claim on property that could force its foreclosure and sale to satisfy unpaid contractor or supplier debts) becomes effective on January 1, 2011. The result of Contractors State License Board (CSLB)-sponsored Assembly Bill 457 (Monning), the new law, signed in 2009, requires contractors, subcontractors or materials suppliers who intend to file a mechanics lien to serve aNotice of Mechanics Lien on the property owner. In addition to the notice, the person serving the mechanics lien must also provide a proof of service affidavit or the lien will be unenforceable. Mechanics liens are recorded with the county. Many times homeowners are unaware that a lien has even been placed on their property. Awareness of a lien is important because even if a mechanics lien is not used to foreclose on the property, its presence on the title can potentially prevent borrowing against, refinancing or selling the property.

“AB 457 provides vital protection for California property owners, plus, CSLB provides many resources and tips that consumers can easily review before a construction contract is signed to avoid the possibility of a mechanics lien altogether,” said CSLB Registrar Steve Sands

A CSLB-sponsored bill passed this year provides a valuable tool to help combat the states underground economy. Senate Bill 1254 (Leno) will enable CSLB to issue a stop work order to any licensed or unlicensed contractor who fails to carry workers compensation insurance coverage for all of his or her employees. The new law gives CSLB unprecedented authority in allowing the Boards enforcement representatives to more effectively stop unlicensed, uninsured activity, and aid in the states efforts to ensure a level playing field for licensees who follow workers compensation laws. A stop order takes effect immediately and can be appealed. Employees who lose pay due to a work stoppage will be entitled to up to 10 days pay for time lost. Failure to comply with a stop work order will be a misdemeanor, punishable by up to 60 days in jail and/or a fine of up to $10,000.
Following are additional construction-related laws that take effect January 1, 2011, unless otherwise noted:

Other Workers Compensation
SB 313 (DeSaulnier) Labor Code Section 3722 amended
This bill, signed in 2009, increases the potential penalty for failure to have a workers compensation policy from $1,000 to $1,500 for each employee not covered. Fines are administered by the director of the Department of Industrial Relations. (Amended Stats 2009 ch 640 § 1)

AB 2305 (Knight) Business and Professions Code Section 7125 and Insurance Code Section 11665 amended
The bill extends the requirement for C-39 Roofing contractors to carry a workers compensation policy, even if he or she has no employees until 2013. (Amended Stats 2010 ch 423 §1, 2 and 3)

Environmental
AB 1343 (Huffman) Public Resources Code Chapter 5 added to Part 7, Division 30
Effective April 1, 2012, contractor outreach and education will begin regarding recycling of architectural paint. Implementation of this recycling program could include an assessment on the future sale of paint. (Amended Stats 2010 ch 420 § 1 and 2)

AB 2398 (John A. PÃrez) Public Resources Code Section Chapter 20 added to Part 3, Division 30 and Section 42980 repealed
Beginning on July 1, 2011, carpet manufacturers must charge an additional one-half cent sales tax per square yard of product purchased to pay for a carpet recycling program. (Amended Stats 2010 ch 681 § 1 and 2)

Criminal
AB 2372 (Ammiano) Penal Code Section 487 amended
This law changes the threshold from $400 to $950 to charge the crime of grand theft for stealing money, labor, real or personal property. (Amended Stats 2010 ch 693 § 1 and 2)

CSLB/Consumer Protection Boards
SB 294 (Negrete McLeod) Business and Professions Code Sections 7000.5 and 7011 amended
This bill extends CSLBs existence as a consumer protection board from January 1, 2011 to January 1, 2012. (Amended Stats 2010 ch 695 §37 and 38)

SB 392 (Florez) Business and Professions Code Sections 7025, 7028.5, 7029, 7065, 7065.1, 7065.5, 7068, 7068.1, ;7068.2, 7069, 7071, 7071.1, 7071.8, 7071.9, 7071.11, 7071.17, 7072.5, 7075.1, 7076, 7076.2, 7085.6, 7090, 7090.1, 7096, 7121, 7121.1, 7121.5, 7121.6, 7122, 7122.1, 7122.2, 7122.5, 7137, 7138, 7152, 7159 and 7159.10 and 7071.6.5 and 7071.19 added; Corporations Code Section 22037amended
This bill authorizes the issuance of a contractor license to a Limited Liability Corporation (LLC) beginning January 1, 2012. Prior to passage of this law, LLCs were not able to be licensed in California. The LLC would be required to maintain liability insurance of between $1,000,000 and $5,000,000 and post a $100,000 surety bond, in addition to the $12,500 bond already required of all licensees. (Amended Stats 2010 ch 698 §1 through 43)

SB 1491 (Committee on Business, Professions and Economic Development) Business and Professions Code Sections 7028.6, 7028.7, 7028.9 and 7058.5 amended
This bill requires that a citation for acting as a contractor or salesperson without a license or registration be issued within four years, or 18 months of a complaint for the violation, whichever is later. The bill also allows for contractors applying for an original license to complete and return the required open book exam about asbestos electronically. (Amended Stats 2010 ch 415 §17,18 and 19)

AB 1659 (Huber) Government Code Section 9147.7 added
This law abolishes the Joint Committee on Boards, Commissions and Consumer Protection and replaces it with the Joint Sunset Review Committee. CSLBs sunset review process remains unchanged. (Amended Stats 2010 ch 666 § 1)

AB 2130 (Huber) Business and Professions Code Section 22 amended and Section 101.1 and Division 1.2 repealed
This law is a companion bill to AB 1659, replacing the Joint Committee on Boards, Commissions and Consumer Protection and replacing it with the Joint Sunset Review Committee. (Amended Stats 2010 ch 670 § 1 through 3)

AB 2500 (Hagman) Business and Professions Code Section 114 amended and Section114.5 repealed
The bill amends current law allowing people licensed by Department of Consumer Affairs boards and bureaus to reinstate their license without examination or penalty if serving in the California National Guard or United States Military during a period of war. The new law repeals the section defining war and extends the reinstatement provision for licensees who can prove they were serving on active, military duty. Requests must come not more than one year after discharge or the end of active duty. (Amended Stats 2010 ch 389 §1 and 2)

Changes to existing regulations that would increase contractor licensing fees (PDF) received final approval from the Office of Administrative Law, effective December 18, 2010. Fee increases begin on July 1, 2011 for those applying for or changing their contractor license. Renewal fees for licenses that expire on or after July 1, 2011, will also be increased. CSLB fees have remained at their current level since 1993, and the additional revenue will assure CSLB upholds its mandated protection of California consumers and the integrity of the construction industry

Important CSLB Bulletin: Contractors State License Board Encourages Vigilance as Winter Storms Hit State

SACRAMENTO — In the wake of heavy rain, mudslides, flooding and their aftermath, the Contractors State License Board (CSLB) reminds California property owners to stay vigilant when it comes to contracting for clean-up or repairs. Sometimes what appears to be the cheapest solution to remove a fallen tree, fix a downed fence, or patch a leaky roof may not be the wisest choice.

Consumers can use CSLB™s online resources to check the license status of the contractor they plan to hire, and to get tips on home repair and improvement choices. Any construction job valued at $500 or more in labor and materials must be done by a state-licensed contractor. California Business & Professions Code requires all licensees to carry workers compensation insurance coverage for their employees and to purchase a contractor license bond.

Now that Governor Schwarzenegger has declared a State of Emergency in several coastal, Central Valley, and Southern California counties, anyone caught contracting without a California contractor license can potentially be charged with a felony and subject to up to $10,000 in fines and three years in state prison (Business and Professions Code section 7028.16). In areas that are not state or federally-declared disaster areas, penalties are generally misdemeanors.

“A state-licensed contractor is the right choice when looking for a legitimate, qualified home repairperson”especially in an urgent situation,” said CSLB Registrar Steve Sands. “A CSLB-licensed contractor who is skilled in the specific trade you are seeking is not likely to leave you in the lurch when it comes to properly completing the job at a fair price.”

For tree trimming and removal jobs where the tree is 15 feet or higher and the job is more than $500, the contractor must be state-licensed. Business & Professions Code allows a gardener to do incidental pruning on trees less than 15 feet and under a cost of $500 without a CSLB license.

CSLB urges consumers to follow these tips when soliciting bids from a home improvement contractor:

• Hire only licensed contractors, and ask to see the license and photo identification to make sure the person is who they claim to be.
• Dont rush into repairs, no matter how badly they are needed.

San Jose Operation Snags More Than One Dozen Unlicensed Operators


Important CSLB Bulletin: SACRAMENTO — The Contractors State License Boards (CSLB) Statewide Investigative Fraud Team (SWIFT) netted 14 suspects in a San Jose undercover sting operation this week. The Santa Clara County District Attorney’s office assisted in the December 7, 2010 sting and a sweep of construction sites on December 8, which resulted in one citation for contracting with an expired license and another for failure to carry workers compensation insurance.

“In today’s economy, it’s more important than ever for consumers to hire licensed and insured contractors,” said CSLB Registrar Steve Sands. “People put themselves and family members at risk when they hire unlicensed and uninsured individuals who can end up doing substandard work or never finish the job. They also cheat law-abiding licensees out of work.”

During the sting operation, SWIFT investigators posed as homeowners seeking bids for painting, landscaping, concrete, and roofing jobs. Suspects who bid more than $500 for labor and materials received a notice to appear (NTA) in court. California law requires all home improvement jobs valued at more than $500 to be undertaken by a licensed contractor. Contractors also must place their state contractor license number in all advertisements. Unlicensed individuals may advertise and accept jobs valued at less than $500, but their ads must state that they are not a licensed contractor.
CSLB licensees must have at least four years of journey-level experience in their license classification and must pass exams pertaining to their trade and state contracting laws. State law requires that licensees purchase a license bond for consumer protection and that their employees have workers compensation coverage to shield homeowners from liability. Roofing contractors (C-39) must purchase workers compensation for themselves, even if they do not have employees.

CSLB Sting Snatches Nine Illegal Operators in Glendora

Important CSLB Bulletin:
SACRAMENTO — The Contractors State License Board (CSLB) Statewide Investigative Fraud Team (SWIFT) caught nine people for violating state home improvement contracting laws during an undercover sting on December 13, 2010. SWIFT was assisted by the California Highway Patrol and the Los Angeles County District Attorney’a Office.

During the sting operation at a Glendora home, SWIFT investigators posed as homeowners seeking bids for painting, fencing, flooring, and cabinetry projects. Suspects who bid more than $500 for labor and materials received a notice to appear (NTA) in court. “Homeowners need to be fully aware of who they are letting into their homes,” said CSLB Registrar Steve Sands. “This operation illustrates the importance of spending a couple of minutes on CSLB website to check the license before you hire a contractor to ensure you aren’t putting your family or your home at risk.”
California law requires all home improvement jobs valued at more than $500 to be undertaken by a licensed contractor. Contractors also must place their state license number in all advertisements. Unlicensed individuals may advertise and accept jobs valued at less than $500, but their ads must state that they are not a licensed contractor. State law prohibits solicitation of a down payment that is greater than 10 percent of the projects value or $1,000, whichever is less, for home improvement contracts. There is an exception for about two dozen licensed contractors who purchase special consumer protection bonds and are noted on CSLB’s website. State law also requires those selling home improvement services for licensed contractors to register with CSLB.
Since 2005, state law has required criminal background checks for anyone applying for a new license or adding a license classification. California law also requires contractors to have workers compensation coverage for all of their employees to protect homeowners from liability.

Important CSLB Bulletin: Attention C-10 Contractors


CSLB Announces Zero-Tolerance for C-10 Requirement ViolationsOnly Certified Electricians to Perform Work as Electricians
SACRAMENTO – Effective immediately, the Contractors State License Board (CSLB) establishes a zero-tolerance enforcement policy and will issue legal action against any C-10 Electrical contractor who willfully employs even one uncertified electrician to perform work as an electrician. CSLB is legally required to open an investigation and initiate disciplinary action against the contractor, which may include license suspension or revocation, within 60 days of receipt of a referral or complaint from the Division of Apprenticeship Standards (DAS).
Subsections within Labor Code Section 3099 clearly state that certification by DAS is required for anyone who performs work as an electrician for C-10 Electrical contractors. DAS is required by Labor Code Section 3099.2 to report violations to CSLB.
Electricians are defined as all persons who engage in the connection of electrical devices for C-10 contractors. It is CSLB a position that electrical work must be performed by a certified electrician or an approved apprentice. Trenching, concrete, framing, and other work that does not involve connecting electrical devices may be performed by noncertified workers.
Questions regarding this CSLB enforcement policy should be directed to Brian Gedney (916) 255- 4435.

CSLB Takes the Cake for Sting Targeting Illegal Operators + Ten Reasons to get your License


CSLB Web Release www.CSLB.ca.gov shares the latest news regarding the legal necessity for Contractors to operate with a California Contractors License. Here at Contractors State License Services our mantra is to share the news and events that effect our prospective students and students. Just this month alone we continue to see more and more news of targets on illegal operators. In this case the CSLB stings another ten for violating California contracting laws. These news bites further illustrate the need for a valid Contractors License.

CSLB Takes the Cake for Sting Targeting Illegal Operators
Ten headed to court for violations of California contracting laws

SACRAMENTO – Members of the Contractors State License Board (CSLB)’s Statewide Investigative Fraud Team (SWIFT) received a torte and a hearty thank you from a licensed contractor for a sting operation conducted in Monterey last week. One of the ten arrested suspects said he worked for the grateful licensee, which was not the case. The sting operation, on September 30, 2010, was conducted with assistance from the Monterey Police Department and Monterey County District Attorney’s Office.

During the operation, SWIFT investigators posed as homeowners who were looking for a contractor to do fencing work on their home. Those who bid more than $500 were arrested and issued an issued a Notice to Appear (NTA) in court for contracting without a license. California law requires all home improvement jobs valued at greater than $500 for labor and materials be undertaken by a state-licensed contractor. Those without licenses may advertise their services and work on jobs valued at less than $500, but their ads must state that they are not licensed. Licensees are required to put their license number in all ads. Some of those who will be going to court will also face charges of soliciting an excessive down payment. State law prohibits asking for down payments greater than $1,000 or ten percent of the contract price, whichever is less. There is an exception for about two dozen contractors who purchase special consumer protection bonds that are noted on CSLB’s website.

“Many consumers don’t realize the risks they take when they let an unlicensed operator into their home,” said CSLB Registrar Steve Sands. “Those who are violating the state’s license laws are also not complying with important consumer protection requirements, such as purchasing workers’ compensation coverage for their employees.”
State law requires licensed contractors to carry workers’ compensation coverage for all employees. That ensures the homeowner isn’t stuck with medical bills if a worker is injured on their property.

Top ten reasons we hear for getting a Contractors License:
1. To legally operate in California
2. To protect yourself
3. To gain respect from your colleagues and prospective customers
4. To be competitive
5. To be self employed
6. To gain prestige as a professional and avoid the negative connotation that follow unlicensed contractors
7. To enter into larger contracts & advertise without being worried
8. To avoid being arrested and fined by the State
9. To network with other licensed contractors for more business
10. To be able to legally collect for work performed

View A CSLB Sting Operation Video here!
http://www.facebook.com/pages/Contractors-State-License-Services/137797582916767?v=wall