Unlicensed contractors would face stiffer fines and penalties under legislation recently introduced in the California Assembly.
AB 2412 calls for a maximum fine of $5,000 and up to six months in jail for a first offense. A second offense carries a minimum 90-day jail term, and mandatory fines of either $5,000, 20 percent of the contract price, or 20 percent of all payments made to the contractor, whichever is greater. Further violations bring escalating fines and imprisonment.
The measure, authored by Assemblyman Mike Eng (D-Monterey Park), also would require unlicensed contractors to pay restitution to any victims in criminal court.
“The judge can require that the restitution be granted as a condition for this individual’s getting out of jail or completing probation,” Eng said. “If they leave [the state without paying], they could be considered a fugitive and be arrested.”
Under current law, first-time violations carry a maximum fine of $1,000 or six months in jail, or both. For a second offense, jail time is similarly capped at six months, though fines increase.
“I think it’ll put teeth in the law,” said Don Burns, president/CEO of SPEC, the California pool and spa industry’s legislative advocate. “What happens now when an unlicensed contractor goes out and gets caught in a sting, he pays his $1,000 fine, but he makes that up the next day by noon in doing his illegal activity. That’s just a slap on the wrist. So it has to hurt.”
Eng said changes in demographics and the economy lend urgency to such legislation. With more of the population approaching retirement age, and a steady influx of immigrants who speak limited English, it’s fertile ground for fraudulent contractors.
Home improvements, meanwhile, likely will increase as the housing market continues to struggle. “All those things are happening at the same time, creating a perfect [situation] for people to take advantage of Californians,” Eng added.
A second bill, AB 2479, increases civil penalties for unlicensed contractors who fail to follow building energy-efficiency standards.
One more bill addresses unlicensed contractors. AB 2335, which clamps down on so-called “pool consultants,” or professionals who arrange for their customers to pull permits. Under such agreements, the homeowner becomes the official contractor on record, and then is responsible for all liability and workers’ compensation matters.
If passed, AB 2335 would alter the state’s current permit application by creating an “Owner-Builder Information and Verification Form.” This six-page document, issued by the local building department, spells out the risks and responsibilities of acting as a contractor on one’s own site. All subcontractors would have to be named as well.
AB 2412 has moved through its committees and awaits hearing before the full Assembly, which unanimously approved AB 2335.
Statewide, contractor fraud consistently ranks among the top consumer complaints. The CSLB investigates more than 20,000 grievances filed each year against licensed and unlicensed contractors, according to its Web site.
For more details, visit www.assembly.ca.gov.