CSLB ANNOUNCES ZERO-TOLERANCE FOR C-10 REQUIREMENT VIOLATIONS

ONLY CERTIFIED ELECTRICIANS TO PERFORM WORK AS ELECTRICIANS

Effective immediately, the CSLB establishes a zero-tolerance enforcement policy and will issue legal action against any C-10 Electrical contractor who willfully employs even one uncertified electrician to perform work as an electrician. CLSB is legally required to open an investigation and initiate disciplinary action against the contractor, which may include license suspension or revocation, within 60 days of receipt of a referral or complaint from the Division of Apprenticeship Standards (DAS).

Subsections within Labor Code Section 3099 clearly state that certification by DAS is required for anyone who performs work as an electrician for C-10 Electrical contractors. DAS is required by Labor Code section 3099.2 to report violations to CSLB.

Electricians are defined as all persons who engage in the connection of electrical devices for C-10 contractors. It is CSLB's position that electrical work must be performed by a certified electrician or an approved apprentice. Trenching, concrete, framing, and other work that does not involve connecting electrical devices may be performed by noncertified workers.

Questions regarding this CSLB enforcement policy should be directed to Brian Gedney at (916) 255-4435.

Visit the CSLB's website at www.cslb.ca.gov for this and other important information for the construction industry.

MECHANIC'S LIENS

A Mechanic’s Lien is a document that contractors, engineers, material suppliers, designers, etc., (the “mechanic”) has recorded at the County Recorder’s office. The purpose of a Mechanic’s Lien is to provide the “mechanic” a lien on the property that work was done on for which they have not been compensated for. In other words, it puts a “hold” on the property until the “mechanic” is paid. The lien then gives the “mechanic” the right to foreclose on that property that has the lien on it by filing a lawsuit.

Unfortunately, there are instances wherein the property owner could be the one responsible for paying the lien even though they already paid once for all of the work that was done on their property. This can occur when an owner pays the prime contractor in full for the job, but the prime contractor does not pay the subcontractor in full. If that subcontractor then places a lien on the property, the owner could then be responsible for the outstanding monies due to that subcontractor.

Mechanic’s Liens, as well as Stop Notices and Bonds, are documents that should not be taken lightly. There are many requirements in place as well as timing as to when certain things should be done and/or filed. Mechanic’s Liens have been discussed and litigated many time throughout California Law. Because California law is very different than other state’s laws, it is very important to seek the aid and advice of a competent California construction attorney for help with the Mechanic’s Lien process, even before you realize you need to record one. You do not want to miss out on important deadlines that could preclude you from getting paid.

LIS PENDENS

A Lis Pendens, also known as a Notice of Pendency of Action, basically means that there is a lawsuit pending with respect to the particular real property listed in the Lis Pendens. A Lis Pendens is usually prepared once the lawsuit is commenced and is both recorded at the County Recorder’s Office and filed with the court. The purpose of having the document recorded is to tie the property up from transfer of title. Anyone that might have an interest in the property (for example, someone wanting to buy or finance) would then be aware that there is a potential claim on the property.

In the construction industry, a Lis Pendens goes hand in hand with a Mechanic’s Lien lawsuit. As you know, when a contractor provides work on a home and does not get paid, that contractor may record a Mechanic’s Lien. Once a lawsuit is brought to foreclose on that Mechanic’s Lien, a Lis Pendens is then filed and recorded to further enforce that Mechanic’s Lien. This process essentially ties up the property until the legal proceeding is resolved.

NEW LEGISLATION

Following are some new laws of interest:

AB 635 (De La Torre) Public Contracts: Roofing Projects

This law now makes a project for the repair or replacement of a roof of a public school or community college, a material, product, thing, or service considered equal if it meets specified requirements. It requires an architect, engineer, roof consultant, and other specified persons or entities to complete and sign a certification related to financial relationships in connection with such a project and to provide the certification to the school district or community college district. This law went into effect immediately after signing.

AB 1659 (Huber) State Government: Agency Repeals

Prior law had a Joint Committee on Boards, Commissions, and Consumer Protection and this new law will create a Joint Sunset Review Committee in its place. The purpose is to identify and eliminate waste, duplication, and inefficiency in government agencies and to include a comprehensive analysis of eligible agencies to determine if the agencies are still necessary and cost effective. This affects the CSLB just as the current sunsetting process currently does.

AB 2036 (Berryhill) Public Contracts: Contract Document Distribution

This law amends existing laws that have set forth procedures relating to state and local agencies solicitation and evaluation of bids or proposals for, and award, of contracts for the construction of public works.
The state department and any local agencies are now to provide an electronic copy of the project’s contract documents to the contractor plan room at no charge upon request from a contractor plan service.

AB 2058 (Block) Unemployment Insurance: Retraining Benefits

This law establishes the California Training Benefits Program, which specifies that unemployed individuals who qualify for unemployment compensation benefits, extended duration benefits, or an application for federal or state extended benefits or any federally funded unemployment compensation benefits, and applies for the program shall be deemed to be eligible for the program during a period of training or retraining and requires disclosure of related information.

AB 2130 (Huber) Professions and Vocations: Sunset Review

This goes hand in hand with AB 1659 wherein prior law had a Joint Committee on Boards, Commissions, and Consumer Protection and this new law creates a Joint Sunset Review Committee in its place. The purpose is to identify and eliminate waste, duplication, and inefficiency in government agencies and to include a comprehensive analysis of eligible agencies to determine if the agencies are still necessary and cost effective. As with AB 1659, this affects the CSLB just as the current sunsetting process currently does.

AB 2181 (Hagman) State Contract Act: Contracting by State Agencies

This law amends the State Contract Act by requiring projects that are not under the jurisdiction of specified departments to be under the charge and control of the Department of General Services.

AB 2195 (Silva) Taxation: Board of Equalization: Penalty: Proof

This new law deals with taxes and fees administered by the State Board of Equalization. The Board of Equalization now has the burden of proof, by clear and convincing evidence, in sustaining its assertion of penalties for intent to evade or fraud a civil proceeding. In addition, a taxpayer shall not be subject to unreasonable search or access to records in violation of the law.

AB 2211 (Fuentes) Instruction

This law authorizes school districts maintaining high schools to establish work-based learning programs and purchase related liability insurance. It also authorizes specified school programs to deliver such opportunities for pupils that may include work experience education, community classrooms, cooperative career technical education programs and job shadowing experience. In addition, specified entities are authorized to develop related principles and guidelines. This law went into effect immediately after signing.

AB 2305 (Knight) Contractors: Workers’ Compensation Insurance

This law amends existing law that requires a contractor with a C 39 roofing classification to obtain and maintain workers' compensation insurance even if the contractor has no employees. It also extends the operation of those provisions and requires license suspension for lack of workers' compensation for employees. Lastly, it extends the operation of existing law that requires an insurer who issues a workers' compensation policy to a roofing contractor holding such license to perform an annual payroll audit and requires statistical data.

SB 156 (Wright) Insurance: Fraud Prevention and Detection

This law authorizes the Department of Insurance to convene meetings with insurance companies to discuss information concerning suspected, anticipated, or completed acts of fraud. It also protects a person sharing information pursuant to the authorization from civil liability for libel, slander or other causes of action.

SB 189 (Lowenthal) Mechanic’s Liens

This law revises and recasts provisions of existing law relating to Mechanic’s Liens. It enacts separate provisions governing private works of improvement and public works of improvement. It also revises and recasts provisions governing design professionals liens, Mechanic’s Liens, notices of cessations, bonds and retention payments.

SB 294 (Negrette McLeod) Professions and Vocations: Regulation

This law provides for the extension of various provisions governing professions or boards, the Contractors' State License Board being one of them.

SB 392 (Florez) Contractors: Limited Liability Companies

This law amends the Beverly-Killea Limited Liability Company Act and the Contractors’ License Law. It authorizes the issuance of a contractor’s license to a limited liability company and authorizes specified officers to qualify for the license. The limited liability company will be required to maintain liability insurance and post a surety bonds as a condition of licensure. The law also provides personal liability of persons within the company in a certain instance and adds persons prohibited from engaging in business without a license.

SB 694 (Correa) Public Contracts: Public Works: Competitive Bidding: Procedures

This law extends the time to request a review and the time the State Uniform Construction Cost Accounting Commission has to review a public agency project that is to be performed after the rejection of all bids as well as for a Commission review of work for which evidence was provided that the work has exceeded the force account limits or has been improperly classified as maintenance.

SB 972 (Wolk) Indemnity: Design Professionals

This law provides, with respect to contracts and amendments to contracts entered into on or after January 1, 2011, with a public agency for design professional services, that all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting these contracts or amendments to contracts that purport to require the design professional to defend the public agency under an indemnity agreement, including the duty and the cost to defend, are unenforceable, except for claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional. It also provides that all contracts and all solicitation documents between a public agency and a design professional are deemed to incorporate these provisions by reference.

SB 1254 (Leno) Contractors: Workers’ Compensation Insurance Coverage

This law authorizes the Registrar of Contractors to issue a Stop Work Order to any licensee or unlicensed contractor who, as an employer, has failed to secure workers’ compensation insurance coverage for his or her employees and makes a failure to comply with the order a misdemeanor. It also sets forth procedures for the payment of employees pursuant to issuance of a Stop Work Order, and allows an employer to request a hearing to protest a Stop Work Order. Lastly, it would authorize an increase in the number of CSLB peace officer positions from three to 12.

SB 1491 (Business and Professions and Economic Development Committee) Professions and Vocations

This law has Contractors’ License Law cleanup provisions that modify the method for administering the open book asbestos examination and extends the statute of limitations for filing an action to discipline unlicensed contractors so that it conforms to the statute of limitations for licensees, and states that an action must be brought within four years from the date of the violation or 18 months after the filing of the complaint, whichever is later.

CSLB URGES HVAC CONTRACTORS TO AVOID CUSTOMER DISPUTES BY FOLLOWING ENERGY EFFICIENCY REQUIREMENTS

The Contractors State License Board (CSLB) and California Energy Commission (CEC) are encouraging C-20 Warm-Air Heating, Ventilating and Air-Conditioning (HVAC) contractors to follow California’s energy efficiency standards that took effect at the beginning of 2010. CEC has been informed of several disputes between contractors and consumers because of the costs associated with required testing and other work that ensures installations comply with the Building Energy Efficiency Standards.

Licensed contractors are required to know the applicable laws, regulations, and codes pertaining to all work performed within their licensing classification. To avoid conflict, licensed contractors must inform their clients of the costs associated with the required testing to ensure their systems are functioning properly, including testing by Home Energy Rating System (HERS) raters, when required. Contracts should fully detail all labor, services, materials, and equipment to be installed, and provide a total cost associated with the installation.

Under the California Code of Regulations, Title 24, Part 6, contractors installing new, or replacing existing, heating and air-conditioning equipment in certain climate zones must ensure that heating and air-conditioning ducts have been properly sealed and that the refrigerant charge level installed in split systems is properly measured.

For more information about license requirements, license laws, and contract requirements, visit CSLB’s website. For questions about the Building Energy Efficiency Standards (Title 24, Part 6), HERS regulations (Title 20), duct testing or additional testing requirements, contact CEC’s hotline at (916) 654-5106 or (800) 772-3300, via e-mail at Title24@energy.state.ca.us, or on the CEC website, which also provides the updated forms for energy efficiency standards requirements in some climate zones.

CORPORATIONS, LLC'S & FILING INFORMATION

If your business is a corporation or a limited liability company (LLC), you might be receiving official looking third party solicitations to file a Statement of Information form or to terminate your business. They usually request exorbitant fees for them to file these documents with the Secretary of State on your behalf. These documents look very official.

No business has to go through a third party (attorney or otherwise) to file these forms. The forms can be found on the Secretary of States website along with all of the filing fee information and how to file. Please note, you can use a third party to file these forms for you if you want to or are unsure how to do it yourself, but it is not mandatory.

If you receive on of these deceptive letters and would like to complain, you can send the letter along with a written complaint to the California Attorney General's office. Please include all documents received including the envelope the letter was received in and any return envelopes, if applicable. You can print a complaint form from their website at www.ag.ca.gov/consumers/general.php. The address is:

California Attorney General
Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

For more information about these letters and more, you can visit www.sos.ca.gov/business/be/alert-misleading-solicitations.htm

CALIFORNIA LICENSED CONTRACTOR NEWSLETTER AVAILABLE

The Contractors State License Board (CSLB) is pleased to announce that its first online edition of the quarterly California Licensed Contractor (CLC) newsletter is now available.

The CSLB e-publication provides you with valuable information on a broad range of important subjects. The most recent round of state budget cuts forced CSLB management to make the difficult decision to discontinue mailing the publication. The decision will save the CSLB approximately $450,000.00 per year.

You can get the newsletter here.