On January 1, 2013 California’s Assembly Bill AB 2237 went
into effect which basically regulates those submitting bids and performing the actual
work (a Contractor), rather than
those overseeing or managing work (Construction
Managers and Consultants).
The new law is intended to “clearly define when someone is
a “Contractor” and discourage unscrupulous individuals from working under a
fraudulently obtained owner-builder permit.”1
Apparently, there have been cases when individuals circumvent the
contractor license law requirements by calling themselves a “Consultant” or
“Construction Manager” but submit a bid to perform certain work, and then
provide the labor and materials to perform that same work in exchange for a
fee. The problem is that these
individuals may or may not have the proper insurance or bonds in force as
required for “Contractors” thus leaving the property owner with all of the
responsibility and liability for the work being performed.
Basically, a contractor’s license is not required unless one
proposes to or undertakes to do the actual work or some part of it or if the total project cost is less than
$500.00. However, in California, registration
with the EDD (Employment Development Department) is required when hiring
employees to perform any work.
Here are a few tips
and preventative measures for putting responsibility and liability where it
belongs:
1. Community
associations, and owners of high rise buildings or common wall structures
should advise and educate their entire association or occupants about how to
screen and hire contractors because work performed, in only one unit in the
building will/can affect the others.
i.e., defective workmanship; and use of inferior materials and/or
equipment;
2. Owner-Builders,
Property Owners and Managers should understand that licensed “contractors”
perform functions such as (1) proposing to undertake the actual work, (2) providing and overseeing bids, (3)
arranging and setting up work schedules, (4) maintaining oversight of projects,
(5) satisfying the sufficiency of bids, plans and specifications and (6), inspects the work performed by
vendors/subcontractors to determine compliance with the plans, specifications
and any other construction documents; whereas, “Consultants” and “Construction
Managers” do not propose to or undertake the actual work or some part of it;
nor do they satisfy the sufficiency of bids, plans and specifications; and
3. Property Owners
should get familiar with the overall process of planning projects, hiring
resources, taking bids, and managing performance.
www.constructionplace.com offers free advice and learning systems to
its users for under $100.00. The system
includes the new book titled “Construction like Sushi” featuring a four part
system and optional interactive self calculating down loadable work sheets that
can be modified and reused. The four
part system includes:
1. Planning Projects
2. Hiring Resources
3. Job Costing and Contracting Agreements
4. Managing work performance and payments
And the new Project Registry is a perfect tool for managing
and archiving property and project information.
4. Understand that:
a. Professional roles that are associated with
responsibility and liability when undertaking building construction and
improvement projects include, but not limited to, Agents, Community Managers, Construction
Mangers, Consultants, Contractors, Owner-Builders, Owner Representatives, and
Property Managers; and
b. Project types
include, but are not limited to, Home Improvements, Home Improvement Goods and
Services, and any building construction projects.
This information is based on the author’s interpretation of
the California Contractor licensing law.
Therefore, everyone should consult their respective local and/or state
Contractor license laws and be guided accordingly.
Definitions and Information
sources:
EDD means California State
Employment Development Department
1 Contractors State License Board, Press Release
12/31/2012
Comments welcome!
