New 2008 Construction Laws Clarify Contractor
Responsibilities, Consumer Safety

Clean–Up Language Dominates New Contractor Laws

As the New Year rolls in, contractors, once again, must heed the new and revised state laws that govern professions within the construction industry. Following are the highlights of legislative action taken in 2007. All California contractor laws are available in the Contractor State License Board’s (CSLB) 2008 Law and Reference Book, due for release in early January.

BUSINESS & PROFESSIONS CODE

§101.7 – Boards and other entities within the Department of Consumer Affairs (DCA) must meet three (3) times each calendar year, and at least once in northern California and once in southern California. The DCA Director is authorized to excuse a Board from meeting upon showing cause, and/or to call a special meeting.

§125.6 – In addition to facing disciplinary action if a licensed contractor refuses services based upon race, color, sex, religion, ancestry, disability, marital status, or national origin, licensees will face disciplinary action if they discriminate by refusing construction-related services based upon a prospective client’s medical condition or sexual orientation.

§7026.11 – The terms “mobile home” and “manufactured home” will now have separate and distinct definitions for reasons that are unrelated to Contractors License Law. The General Manufactured Housing (C-47) classification continues to be the appropriate specialty license for performing work relative to mobile homes and manufactured housing.

§7027.5 – Landscape Contractors (C-27) licensed by the Contractors State License Board are authorized to enter into prime contracts to construct and install outdoor cooking centers and fireplaces, as long as the projects are included in a residential landscape project, and the fireplace is not attached to the dwelling. Other properly licensed specialty or general contractors would still be required for tasks that are beyond the scope of the landscape contractor classification.

§7083.1 – Contractors whose licenses have expired, are canceled, or are otherwise inactive, must notify the CSLB Registrar of their current address(es), in writing, for five (5) years, instead of the previously designated three (3) years.

§7091 – If a licensee is convicted of a crime that is substantially related to the qualifications, functions or duties of a contractor, the CSLB will have two (2) years from the date the conviction is discovered in which to file disciplinary action against the licensee. Also, the CSLB will have 18 months after the date a warranty expires in which to file a disciplinary action against a licensee who fails to honor the terms of the warranty.

§7114 – As part of disciplinary action against a licensee, the Registrar of Contractors is authorized to order a licensee to pay a specific amount of money to an injured party if the licensee has aided an unlicensed person or allowed an unlicensed person to use his or her license.

§7159.5 – A statute of limitations has been established for filing criminal charges against contractors who furnish a bond, bond equivalent, or Joint Control that is approved by the Registrar and who are exempt from referencing the down payment, schedule of payments, the Mechanic’s Lien warning, or using the 10%/$1,000 down payment rule in a Home Improvement Contract where the cost of all labor and materials exceeds $500. The date the first payment is given to the contractor is the date used in establishing the statute of limitations for filing criminal charges.

§7159.14 – For the case where a Service and Repair Contract is not reduced to writing as required by the law, the date the first payment is given to the contractor is the date used in establishing the statute of limitations for filing criminal charges.

CIVIL CODE

§2782 – Residential construction contracts and amendments that indicate a general contractor or subcontractor is to be held harmless for construction defects, injury or negligence are legally unenforceable as of January 1, 2008.

INSURANCE CODE

§11760.1 – If an employer fails to provide access to an insurance company or its representative to perform a workers’ compensation audit, the employer will be liable to pay the insurance company three (3) times the total premium, plus associated costs.

Complete contents of each legislative change is available by looking up the California code and section number on the following state Website: www.leginfo.ca.gov.