Advertising: The Legal Rights and Wrongs
SACRAMENTO — Advertising is a way to catch the attention of new clients, especially during spring home improvement season. The methods to publicize a business can take many forms. Besides newspapers and radio, it can also be business cards, lettering on your truck, brochures, directories like the yellow pages and the Internet. The Contractors State License Board (CSLB) is offering some reminders about the laws in this area that effect contractors.
- Contractor's License Number must be on anything considered advertising
Licensed contractors are required to include their CSLB license numbers on everything from contracts, business cards, and yard signs to placards on commercially registered vehicles.
- False Advertising
It is a misdemeanor to use false, misleading or deceptive advertisements to sell clients home improvements and other services. It is also illegal to make misleading claims or advertise prices that you do not intend to accept contracts for.
- Advertising for work you're not licensed to do
Licensed contractors are not allowed to advertise for construction work outside of the areas for which they are licensed.
- Don't advertise about bonding
Contractors are forbidden by law to advertise the fact that they are bonded. It could lead the public to believe there is a higher level of protection than might be the case.
If owner-builders use any signs, cards, or directories that imply they can be hired by the public for construction or home improvement, they become subject to the same laws as other contractors. B&P section 7027 also prevents owner-builders from advertising illegally.
- Unlicensed Operators
Unlicensed operators can legally advertise for construction work or improvements if the cost of the work (labor & materials) is under $500. But, they must state in the ad, that they are "unlicensed." If an unlicensed operator advertises as a contractor in a directory such as the Yellow Pages, they face fines.
Fines for licensees who violate the laws can range from $50 to $2,000 depending on how egregious the act. The fines for non-license holders get much steeper, ranging from $200 all the way up to $15,000 for acting in the capacity of a contractor without having a license.
Get more information about advertising and advertising tips from the CSLB Advertising Guidelines Pamphlet. A "Hot Lead Referral Form" can be downloaded on the CSLB Web site to report unlicensed contractors activity.
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