Does a contractor have to be licensed for an at cost construction contract (no profit contract)?

Asked over 1 year ago - Walnut Creek, CA

There is a dispute with a person that did a construction contract for me for 5000 dollars and he wants all his 5000 dollars but I want repairs done.

He says that he was not making any money so there was no consideration. But he was being compensated for what he spent.

He admits that he is unlicensed but he said that he was doing the work as a favor, just doing it at cost and 7031 did not apply to him.

I thought that 7031 applies to any construction contract more than a certain amount.

Attorney answers (7)

  1. Edward Hall Cross

    Contributor Level 4

    8

    Lawyers agree

    Best Answer
    chosen by asker

    Answered . California Business and Professions Code §7031 prohibits an unlicensed contractor from filing suit for payment for work that required a license. Profit is irrelevant. The purpose of the law is to discourage unqualified individuals from performing construction work that could pose safety hazards. California law is merciless with unlicensed contractors. Nor can he sever out the portion that required a license and collect for the rest, unless the other parts were unrelated to the parts that required a license. The owner is almost always in the "driver's seat" when the contractor had no license.

    These comments are for general informational purposes and do not create an attorney-client relationship. Do not... more
  2. Cathleen M Curl

    Contributor Level 13

    5

    Lawyers agree

    1

    Answered . Your contractor is 100% WRONG! The law doesn't care how much profit he was making, or if he was just doing a "favor" for you. An unlicensed contractor cannot sue for any money owed on a project, and you can demand a refund of any monies you do pay him. You could also file a complaint against him with the Contractors State License Board, if you chose to do so.

  3. Paul Bradley Schroeder

    Contributor Level 12

    4

    Lawyers agree

    Answered . Yes, a contractor must be licensed. If he is not, he is not entitled to be paid. Whether he was making money or not is irrelevant. You could hire a licensed contractor to perform the repairs and then sue him for the cost.

  4. Christine C McCall

    Pro

    Contributor Level 20

    2

    Lawyers agree

    1

    Answered . Except in certain specified circumstances, California law is clear that a contractor's license (CSLB) is required only for work "valued at $500 or more in labor and materials."

    No legal advice here. READ THIS BEFORE you contact me! My responses to questions on Avvo are never intended... more
  5. Chi Leung Ip

    Contributor Level 13

    2

    Lawyers agree

    1

    Answered . You have a disgorgement action against this unlicensed contractor. Business and Professional Code 7031(b) is applicable even when the unlicensed contractor lost money on the job. You are entitled to recover all $5,000 paid to him. The unlicensed contractor has no equitable defense against your disgorgement claim, such as unjust enrichment. Edward C. Ip www.lawyer4property.

    No attorney / client relationship established. The answr is for discussion and general information only. The... more
  6. Sreenivasarao Vepachedu

    Contributor Level 14

    3

    Lawyers agree

    Answered . However, notwithstanding subdivision (b) of Section 143, the court may determine that there
    has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, (3) did not know or
    reasonably should not have known that he or she was not duly licensed when performance of the act or contract commenced, and (4) acted promptly and in good faith to reinstate his or her license upon
    learning it was invalid.

    This is not a legal advice or solicitation, and does not create an attorney-client relationship. Consult with an... more
  7. Joel I Hoffman

    Pro

    Contributor Level 6

    1

    Lawyer agrees

    Answered . Almost all states require contractors to be licensed. the fact that the contractor did not make a profit is irrelavent.

    The answer provided to this question is not intended to give legal advice, nor is it intended to create an... more

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

25,751 answers this week

3,034 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

25,751 answers this week

3,034 attorneys answering