You can’t buy forgiveness or ‘rent’ some things either, despite what rumors may have you believe. Just don’t do it…

Q: I am looking to purchase a contracting business but I only have experience working on my own houses and family member’s homes. I understand it is difficult to qualify based on experience gained as an “owner builder”, or handyman tasks that I have done for family. I’ve heard that it’s possible to “rent” an RMO (Responsible Managing Officer). How does that process work?

A: It depends on what exactly you mean by “rent” an RMO. We hear that term frequently and it means different things to different people. The proper way to go about the process of obtaining a Contractor’s License when you don’t have the requisite experience is to hire someone who either a) has a current contractor’s license and is willing to act as your Qualifier, or b) has the required amount of experience (4 years of full time within the last ten in the trade you are applying for) and is willing to sit for the exams. Either way, the individual should exercise direct supervision and control of the contracting business. Remember too, if you choose option ‘a’, if the individual does not have at least 20% ownership in your company, he/she would be required to Inactivate their own license. Sometimes when people refer to “renting” an RMO, they are referring to paying a licensed contractor a fee to Qualify their license, with no intention of that individual being involved in the dayto-day operations of the company. This is a definite no- No! The CSLB is always on the lookout for this offense, and if discovered, will take disciplinary action on the Qualifier and the Licensee.

Q: We applied for a Contractor’s License for our Delaware corporation. On the license application instructions, it stated that “foreign” Corporations are required to list their President and the Qualifying Individual on the application, which we did. We just received a letter stating that Corporations are required to list their President, Secretary, and Treasurer as reflected with the Secretary of State, and that all individuals listed must be fingerprinted. Can you please clarify if this is actually required?

A: The CSLB used to require foreign corporations to only list their President and Qualifying Individual, however just recently they started following the provisions of B&P Code 7065b(1) with states “Every person who is an Officer, Member, responsible Manager, or Director of a Corporation or Limited Liability Company seeking licensure under this chapter shall be listed on the application as a member of the personnel of record”. You are correct about the instructions on the license application stating otherwise, but they are in the process of updating the forms to reflect this information. At least, that’s the rumor!

Q: I am a licensed contractor and I plan to hire several new employees. Do I need to report the number of employees to the CSLB for any reason?

A: No, the CSLB does not require that you report new employees. The only time you need to notify the CSLB of personnel changes is if the officers on record with the CSLB change, if your qualifier changes, or if you go from no employees (in which case you would likely have an Exemption from Worker’s Compensation on file, to employing CA workers (in which case you would need to have a Worker’s Compensation Insurance certificate on file with the CSLB).

Q: I currently have a Sole Proprietor General Building (“B”) license that’s been Inactive for about three years now. I want to add the “C-8” (Concrete) classification to my license in order to obtain a separate Concrete license for a Partnership that I am starting with my business associate. My attorney said I may be able to Waive the Trade exam based on my General Building license if I can show that concrete has been a significant portion of my work for five out of the last seven years. What does the CSLB consider acceptable documentation to prove my concrete experience?

A: Your attorney is referring to B&P Code Section 7065.3, which allows for a Waiver of the Trade exam when adding a classification to your license if you meet the requirements. As your attorney stated, one of the requirements is the classification needs to be closely related to your current classification and it must have been a significant portion of the work you performed for five out of the last seven years. So sorry, since your license has been Inactive for three years now, there is no way for you to document using your General Building license for performing Concrete work as required.

By Shauna Krause, President, Capitol Services, lnc. www.cutredtape.com