Sometimes you can qualify for all work and no play! A contractor discovers that one Bond that you can’t release until there’s another, and while most regulations are black and white, isn’t there always an ‘exception’to a rule?…

Q: I sold my contracting business which I am the Qualifier for. The purchase agreement states I will remain the Qualifying Individual until the buyer can take over the license or hire a qualified individual to replace me. With my ownership falling below 20%, I know I must now inactivate my personal license while still acting as the Responsible Managing Officer (RMO) for the company I just sold. With less than 20% ownership, does that also mean I am required to work for the company 32 hours a week? If so, I may be encouraging the buyer to speed up the process of replacing me! 

A: As long as you remain an Officer (RMO) on the license and regardless of ownership, you are not required to work a certain amount of hours per week.

Q: We recently purchased another entity, and I am now maintaining their licenses in addition to the ones I was already in charge of. To make my life easier, I would like to get new bonds in place for the new entity under the same surety company we use for our other licenses. What is the process for releasing the bonds on record so that I can provide new bonds from our surety company?

A: The first step would be to obtain the new bonds. The CSLB will not “release” bonds on file, however when you submit another, the CSLB puts the newest one on file and replaces the old one.

Q: We frequently do affordable housing work. We often are requested by private developers who are the owners of the project. It is known that favorable credit is given to Joint Ventures where one of the entities is a Small Business Enterprise. We are looking at a bid proposal that we’d like to bid on with another licensed SB contractor, and in my short experience with license law, I seem to remember that you cannot bid on work without a license. However, the Joint Venture creation is dependent on whether we are awarded the project. I’m wondering if there’s an exception for Joint Ventures? Are we permitted to bid with the intention of obtaining a license if we are awarded the job?

A: There is an exception. B&P Code Section 7029.1 states two licensed contractors may jointly bid for the performance of work prior to obtaining a license, however they cannot jointly enter a contract without first obtaining a Joint Venture Contractors license.

Q: I was looking into obtaining a CA Contractor’s license and I live in AZ. I noticed PSI administers the exams for CA now. Does that mean I can take the exams for the CA license here in AZ? PSI administers the exams here as well.

A: No, you still must come to CAand go to one of the PSI testing facilities here in order to take the exams. We have plenty of places to relax, enjoy, and celebrate passing the exams! Luckily, there are many choices of locations up and down the State.

Q: I am an attorney and I have used and referred your services in the past. One of my clients contacted me and he actually hired another consulting firm to assist him with the process of obtaining a license. While I am encouraging him to call you to pick it up from here, the other consultant requested that my client sign a POA (Power of Attorney) in order to handle the process on his behalf. Is this something that you’ve heard of?

A: Yes, Capitol Services gives applicants that option as well, obviously assuming they are comfortable doing so. The CSLB requires a POA be in file to communicate with anyone other than the applicant with regards to their application.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email [email protected].

By Shauna Krause, President, Capitol Services, Inc. – www.cutredtape.com