CSLB Seeks Bills to Reduce Unlicensed Contractor Ads, Strengthen Regulatory Authority

CSLB's Board is supporting new legislation that would provide more tools to help regulate unlicensed contracting. Legislative proposals for 2014, reviewed during the Board's February meeting, are being introduced by lawmakers during the current legislative session.

Business and Professions Code (BPC) section (§)7027.2 and BPC §7110.5 – These two proposals are scheduled to be packaged into one bill. Also, CSLB wants the bill to include a proposal to amend a provision of BPC §7028. (Senator Ted Lieu, D-Torrance, has agreed to carry the legislation.)

• The proposal to amend BPC §7027.2 would revise the requirements for advertisements posted by unlicensed operators.

  The goal of the proposal is to reduce advertisements by unlicensed operators who clearly offer services in excess of the $500 limit for combined labor and material costs. Such ads frequently appear in online bulletin boards.

  Under current law, the operator must note in the ad that they are not licensed. But many offer to take on major projects, such as kitchen and bathroom remodeling that typically can cost thousands of dollars—work that requires a contractor license.

  If this proposal is enacted, CSLB would be able to pursue administrative sanctions against operators who advertise services in excess of the $500 legal limit, and target those individuals in undercover sting operations.

• The proposal to amend BPC §7110.5 would provide CSLB flexibility in pursing disciplinary action against a licensed contractor as a result of a referral from the Labor Commissioner for a Labor Code violation.

  In a similar consumer-protection effort, CSLB last year began posting notices of disciplinary actions taken against contractors by Caltrans and the Department of Industrial Relations' Division of Labor Standards Enforcement on the CSLB website.

• The revision sought for BPC §7028 would clarify that an individual contracting with a suspended license for an outstanding tax or civil liability is subject to the same disciplinary action as an individual contracting without a license.

BPC §7011.4 – This proposal would provide all CSLB enforcement representatives delegated by the Department of Consumer Affairs director with the authority to issue a written Notice to Appear (NTAs) in superior court to anyone suspected of unlicensed contracting. BPC §7011.4 is scheduled to be included in the Senate Business, Professions and Economic Development Committee's omnibus bill.

You can follow a bill's progress and amendments, or search for legislation of interest, on the Legislative Counsel's legislative information website.