Tag Archives: Contractors Bond

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.

Understanding the Contractor’s License Bond


In California, anyone who contracts to perform work that is valued at $500 or more for labor and materials must hold a current, valid license from the Contractors State License Board (hereinafter “CSLB”) and must carry a Contractor’s License Bond. Surety bonds are commonly used for this purpose, but cash or certificates of deposit may also be posted. All Contractor License Bonds must be implemented by an authorized surety company, in a manner up to the required standard of the CSLB and suitable to the State of California. Currently the CSLB requires that contractor’s bonds be in the sum of twelve thousand five hundred dollars ($12,500). At their discretion, the Board may require an applicant to carry a higher bond amount or separate bonds for contractors who have been disciplined, and the amounts of these bonds vary. The bond amount is not per job. It is the amount available for all jobs a contractor takes on during the life of the bond.

A surety bond is a contract in which a surety company promises the State of California that the contractor will comply with the Contractors’ State License Law. Generally speaking, a licensed contractor is obligated not to commit any violations of the Contractors’ State License Law. The law describes and identifies specific violations that the bond will cover and violations can result in disciplinary action against the licensed contractor. California Business and Professions Code § 7071.15 provides that failure to maintain a sufficient bond can result in a minimum penalty of suspension ranging from 60 days up to 1 year probation, and a maximum penalty of revocation. Additionally, if warranted the CSLB can impose an actual suspension of the license for 5 days or more, require contractors to retake the CSLB law and business examination if not taken within the past 5 years, impose educational course requirements, or require payment of CSLB investigation and enforcements costs.

If the contractor does not comply with the conditions of the bond, a consumer, supplier or an employee can file a claim against the bond. California Business and Professions Code § 7071.5 provides that the contractor’s bond shall be for the benefit of the following:
(a) A homeowner contracting for home improvement upon the homeowner’s personal family residence damaged as a result of a violation of this chapter by the licensee.
(b) A property owner contracting for the construction of a single-family dwelling who is damaged as a result of a violation of this chapter by the licensee. That property owner shall only recover under this subdivision if the single-family dwelling is not intended for sale or offered for sale at the time the damages were incurred.
(c) A person damaged as a result of a willful and deliberate violation of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract.
(d) An employee of the licensee damaged by the licensee’s failure to pay wages.
(e) A person or entity, including an express trust fund described in Section 3111 of the Civil Code, to whom a portion of the compensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, damaged as the result of the licensee’s failure to pay fringe benefits for its employees, including, but not limited to, employer payments described in Section 1773.1 of the Labor Code and regulations thereunder (without regard to whether the work was performed on a private or public work). Damage to an express trust fund is limited to actual employer payments required to be made on behalf of employees of the licensee, as part of the overall compensation of those employees, which the licensee fails to pay.

General requirements for bonds include the following:
•Bonds are NOT transferable – do not attempt to transfer a bond from
one license to another or from one qualifying individual to another;
•The business name and license number on the bond must correspond EXACTLY to the information in the records of the CSLB
•The license number on the bond of a qualifying individual must match that of the firm for whom the individual is to serve as the qualifying individual;
•Contractors bonds must be in the correct amount of $12,500;
•A bond of a qualifying individual must be in the correct amount of $12,500;
•The bond must have the signature of the attorney-in-fact ; and
•Bonds must be filed with the CSLB within 90 days of the effective date of the bond.

To avoid problems with the bonds filed for your license and to maintain your bonds, the following guidelines are helpful:
•Keep your required bonds, cash deposits, or bond exemptions current at all times;
•Renew your bonds promptly. Make sure that the effective date of a new bond is the same as the cancellation date of the old bond and allow for processing time;
•Only one bond is effective at any time. A second bond filed for the same period will cancel out the first bond;
•CSLB does not return any bond that has been accepted or processed for an active license; and
•Keep accurate records on your agent, surety company, bond numbers, effective dates, and terms of the bonds.

If a contractor receives notice from their surety company that a claim has been filed against his/her bond, the contractor should immediately contact the surety company to respond to the claim and explain his/her position. The contractor should also submit all documentation relevant to the claim. If a complaint is filed with the CSLB, the contractor should also respond immediately and provide the CSLB all of the requested information and documentation throughout the course of the investigation. Complaints filed with the CSLB and with surety companies are taken very seriously and a contractor’s cooperation is critical to a successful resolution.
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1. See California Business and Professions Code § 7071.6.
2. The term attorney-in-fact is commonly used in the United States, to make a distinction from the term Attorney at law. An attorney-at-law in the United States is a lawyer—someone licensed to practice law in a particular jurisdiction. As an agent, an attorney-in-fact is a fiduciary for the principal, so the law requires an attorney-in-fact to be completely honest with and loyal to the principal in their dealings with each other. See Wikipedia @ http://en.wikipedia.org/wiki/Power_of_attorney .

CSLS iPad Contest Winner Awarded New iPad

CSLS iPad Contest Winner Karl Menjivar Awarded New iPad

CSLS iPad Contest Winner Karl Menjivar Awarded New iPad


Helping to build futures, today CSLS awarded student Karl Menjivar a New iPad. CSLS iPad contest ran throughout the month of October resulting in one very lucky winner. “I am so excited”, said Karl. “I didn’t expect to win.” Karl is pursuing his C-10 Electrical Contractors License. We wish Karl the best and congratulate him on his win!

Looking for how you too can leverage an iPad for your Construction business? Take a look at the top 5 ways an Apple iPad can help your Construction business save time, earn more clients, and simply make your professional life easier.

Top 5 Ways an Ipad can Help Your Contractor Business

1. In the field sketching / note-taking: Sketching out plans, dimensions and equations on the fly is an integral part of the construction process. For this, the iPad opens up a whole new world of possibilities for accuracy, convenience and organization. This tablet can make sketching a plan out as easy as touching the screen and drawing with your finger. Need a calculator? Flip on over to the calculator application. Need to jot a few notes? Flip on over to the notepad application. Then, when you are done – just click save, and move on with your day. There will most likely be tons of applications that you can download that might make the process even easier.

2. Contract reference: The iPad allows you to store and view your most important documents where you can reference contracts, accounts payable, receivables, as well as popular books. Need a on the job reference guide check out the ibooks option.

3. Portable credentials: How many times have you been bidding on a job and been asked to show some credentials? The iPad could easily turn into your on-the-road filing cabinet. Keep important documents like your certificate of liability, Contractors bond, Contractors license(s), worker’s comp – basically anything that you might need when out in the field or bidding on a project, all in one spot.

4. Mobile Professional Portfolio: Nowadays, people want proof of how good you are. They want to see photos, videos, maybe even testimonials of past customers. What better way to showcase yourself than with your iPad? Show customers slideshows of your work, your website, videos … get creative! Apple is renowned for it’s products’ abilities to create cool looking presentations, so take advantage of it and get some more jobs!

5. Digital blueprints: Many contractors have gotten into the habit of bringing their laptops on the job to reference digital blueprints and plans. Well laptops, the iPad has just one-upped you. Already with Apple’s smaller touch interfaces, you can zoom in to minute details, rotate images, even edit on the spot – all with your fingers. And it’s fast! We can only imagine the cool new ways that a larger screen will allow you to interact with and share your plans on the job site. Paper is indeed a thing of the past.

View more on our website at http://www.contractorslicensingschools.com/contractor-industry-news.cfm(List adapted from Center Networks, by Johnnie Munger)