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 rely on this post as "legal advice." Consult with a licensed attorney regarding the specific facts of your case and your rights and liabilities.
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.
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.
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 attorney. I work for Cardinal Risk Mangement and Cardinal Intellectual Property, IP service companies, but not law firms. I also am the president of Vepachedu Educational Foundation Inc., which is a non profit educational foundation. I also write cultural and scientific compliations for the foundation. I also teach at Northwestern university as a guest lecturer. I also provide some pro-bono guidance on immigration and other issues through Indian American Bar Association. I also have a contract with Cardinal Law Group, a law firm, for IP projects. All this information is on my profile at Avvo and also at Linkedin. Any views/opinions expressed in any context are my personal views in individual capacity only, and do not represent the views and opinions of any firm, client, or anyone else, and is not sponsored or endorsed by them in any way.
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."
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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 lawyer had not reviewed any documents or contract prior to the above comments.
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 attorney -client relationship. It is simply an observation and is intended to be a general statement for your consideration There is no substitute for retaining competent legal counsel to assist you with your business activities.