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Is Simply Hiring a Contractor "Being" a contractor?

Walnut Creek, CA |

I hired a contractor to do some improvement for a friend.
I did not do any of the work and I did not supervise the work.
But I did hire the people and paid them.

Now I have asked my friend for the money I spent. It was around twenty thousand.

My friend was upset at the quality of the work and did not want to pay the full amount.

I am not a contractor and I was wondering if I should just take the deal because I will have a hard time in court.

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Attorney answers 3

Best Answer
Posted

I think any marginally competent construction law attorney could successfully argue you were performing functions as a contractor and are not entitled to any compensation, including any money you were already paid and including money paid by you to the other contractors. I'd take whatever he's offering you and pray he doesn't start doing research about the ramifications for unlicensed contractors.

Asker

Posted

I don't understand. He could potentially get money that I already paid the contractors?

Nichelo Michael Campbell

Nichelo Michael Campbell

Posted

In looking at your question again, I first assumed that he had paid you the money and you turned around and gave it to the contractors and now you just want to get paid for your involvement. In reading the question again, I'm assuming that you paid the contractor and want to be reimbursed by your friend. My argument is still the same. In my view, you crossed a line when you paid the contractor; your friend should have paid them directly. You might have been able to argue you were simply acting as a "construction manager" but for two reasons I don't think that's a good defense for you: (1) you paid the contractor, that takes you out of the realm of being a construction manager; and (2) although I suspect several other construction attorneys might disagree with me, I believe a recent change in the law defining contractors now means that construction managers likely need a license. Unlicensed contractors are not entitled to compensation under Business & Professions Code 7031. "Compensation" in this instance means any money collected from the project owner, even if it was for labor, materials, equipment, money paid to "subcontractors" and no matter how well the project was built. Under that section and relevant case law, if you were deemed by the court to be functioning as an unlicensed contractor, any money that was "paid" to you, even if you turned around and paid it to the contractors working on the project, would be deemed "compensation" and he could sue you for reimbursement of ALL that money. Under the facts as you've presented them, I believe you would have needed to be licensed and if I'm right, you wouldn't be entitled to any money whatsoever.

Posted

I would need to see the contracts with the contractors. Were they licensed?

If I were representing you, I would argue you were loaning your friend the money, and he now needs to pay back the loan. If he has a beef, he should take it up with the contractors.

There is an argument you were acting as a general contractor and hiring subs. It is difficult to analyze that issue without knowing more facts. If you were acting as an unlicensed general contractor, then you are not entitled to be paid anything at all.

I am sure I do not need to tell you what the real lesson here is.

Nicholas Basil Spirtos

Nicholas Basil Spirtos

Posted

The loan argument is a novel approach - worth considering.

Jeannette Charlotte Christine Darrow

Jeannette Charlotte Christine Darrow

Posted

Agreed. Depending on the facts we don't know yet, it may be a worthwhile idea.

Posted

If you were acting as a general contractor without a license, the owner could sue you for all of the money he has already paid you. Including materials and services. Also, because it's a home improvement project there are restrictions on down payments. You should consult an attorney ASAP.