Unlicensed Contractors: Beware! Homeowners: Do Your Homework!

The court of appeal has ruled that a homeowner who employs an unlicensed contractor may not only successfully defend against the contractor’s collection action, but in addition, the homeowner has the right to obtain a full refund of all funds paid to the contractor who worked without the requisite license. The court further clarified that an unlicensed contractor may not raise equitable defenses to the refund claim. Even though the contractor spent hard earned money on supplies and materials, and devoted substantial labor for the homeowner’s benefit, a full refund will be ordered in cases where an unlicensed person or firm performs work that requires a license. The harsh penalty is designed to encourage people to obtain (and maintain) proper licenses as required by law. The case is White v. Cridlebaugh (attached). Whenever employing a contractor, check to see if the person or firm is duly licensed. You can do this by going to the website for the California State Contractors License Board (CSLB). The address is: www.cslb.ca.gov. And if you are a contractor seeking work, by all means make sure your license is up to date when you sign up the job, and that it is kept current through the project.

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