Problems with Home Improvement Contractors

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In general, contractors that fix your home must have a license from the State of California. To find out if your contractor is licensed, call the Contractors State License Board at 1-800-321-2752.

Can I sue a contractor for not having a license?
You can only sue a contractor that doesn’t have a license if he or she does any work for you. You can sue an unlicensed contractor for any money you paid him or her to do work for you. But, the work the unlicensed contractor did must be of $500 or more, including labor and materials.

How much money can I sue for?
In small claims court, an individual may sue for up to $7,500. If an unlicensed contractor did work that requires a license to do and causes damage, you may sue for the damage the contractor caused plus 3 times the amount of the damages.

Keep in mind that if the damage the contractor caused forces you to tear all the work down and start over again, you may be able to sue for all the money you paid the contractor plus the cost of tearing out the bad work and starting over. And, 3 times the amount of the damages too.

What if my licensed contractor can’t pay?
A contractor has to pay a $12,500 bond to be able to get a license. If there is a violation of the licensing law, you can sue the company that holds the bond. Name that company as a defendant. The licensing law at Business and Professions Code, Chapter 9 (starting at section 7000).

Call the Contractors State License Board at 1-800-321-2752 to get the name of the bonding company.

Note: The bonding company is a guarantor. You can only sue a guarantor for up to $4,000 ($2,500 if they don’t charge for the guarantee). But, you can sue a guarantor for up to $7500 if you are a natural person filing against the Registrar of the Contractors’ State License Board.

Can a contractor sue a homeowner?
Yes. If a contractor did not need a license to do the work, she or he can sue for payment. If they did need a license, they can’t sue unless they had a license when the work was done.

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