Unlicensed operators also may not carry workers compensation insurance
Four unlicensed operators contracting to replace the air-conditioning unit of a Rancho Bernardo condominium were among the 13 snared for violating California home improvement contracting laws during an undercover contractor sting operation on July 28 and 29, 2010.
The Contractors State License Board’s (CSLB) Statewide Investigative Fraud Team (SWIFT) was assisted by the San Diego Police and City Attorney, San Diego County District Attorney, and the California Department of Insurance. SWIFT members posed as homeowners seeking bids for the installation of a new air conditioner, and for plumbing, painting, and tile work. Unlicensed C-20 Heating, Ventilating and Air-Conditioning (HVAC) contractors are of particular concern to CSLB because they generally fail to obtain the required building department permits for such projects. California’s Energy Efficiency Standards updates that took effect in January 2010 require contractors to obtain a permit from the city or county building department where the home or business is located before installing, removing, remodeling, or replacing any heating or air-conditioning unit. Compliance with HVAC permit laws is one of the Board’s top enforcement priorities.
Failure to obtain a building department permit and have proper follow-up by a California Energy Commission-certified inspector could result in additional expense and risk for the homeowner. A deficient HVAC system may affect a property’s resale value, and could harm the state’s air quality and environment. Inspections ensure that a system is safe, will produce lower utility bills, and help the state meet energy-efficiency goals.
“Badly installed heating or air-conditioning units cost California families money, harm the state’s ability to meet important energy and environmental goals, and can even make people sick,” said CSLB Registrar Steve Sands. “Stings like this help keep California consumers from making an expensive mistake.”
Unlicensed operators also do not carry workers’ compensation insurance for their employees as required by California Labor Code or the contractor license bonds required by the state’s Business and Professions (B&P) Code. The homeowner may be liable if a worker is hurt on their property and without financial recourse if something goes wrong with the project.
Twelve individuals who bid more than $500 during the sting received notices to appear (NTA) in San Diego County Court on charges of contracting without a license. By law, any home improvement project valued at more than $500 for labor and materials must be done by a licensed contractor. Two of the twelve will face an additional charge for seeking an excessive down payment. B&P Code prohibits contractors from soliciting a down payment greater than ten percent or $1,000, whichever is less, unless they are one of about two dozen contractors who purchase special consumer protection bonds. Eight sting targets will answer to charges of illegal advertising. B&P Code also requires licensees to place their license number in all advertisements. Unlicensed contractors can advertise and perform projects valued at less than $500 but must state in their ads that they are not licensed.
CSLB urges consumers to remember the following tips when hiring a contractor:
- Be especially hesitant when approached by someone offering home improvement services door-to-door.
- Verify the contractor’s license by checking online at www.cslb.ca.gov, or via CSLB’s automated phone system at 1-800-321-CSLB (2752).
- Don’t pay more than 10% down or $1,000, whichever is less. There is an exception to this for about two dozen contractors who purchase special bonds that are noted on CSLB’s website.
- Don’t pay in cash, and don’t let the payments get ahead of the work.
- Check references, and get at least three bids and a written contract before your project begins.
- Make sure your contractor obtains the necessary building permits for any project. If you are unsure of these requirements, contact your local building department to verify your project complies with building codes.