Capitol Connection Q&A for Contractors 4-29-2024

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

I start by ‘wrecking’ a contractor’s misconception, but we all learn from the answer. Another inquiry illustrates who can, and who can’t, sign for a corporate contractor and I find a way to give new ‘life’ to an RME whose status has changed…

 

Q: We currently have a “C-21” (Demolition) license and want to add the HAZ and Asbestos certifications to our license. Can we have a different employee take the exams for the HAZ and Asbestos certifications, or does it have to be the current Responsible Managing Officer (RMO)?

A: The individual must be an existing Qualifier holding a classification on the license they are adding it to. The HAZ and ASB certifications are not stand alone certifications.

 

Q: We have an incorporated General contractor’s license. When reviewing our list of Officers we saw that our previous “Board Chair” was on there listed as an Officer. We dissociated her when she left our Board of Directors, however we weren’t sure if we needed to add the current Board Chair to our license or not. I couldn’t find anything that said it was required to have that particular position on the license. Do you have any guidance there?

A: The CSLB’s rule is Corporations are only required to list their President, Secretary, and Treasurer on the contractor’s license. Any additional Officers that you have are optional. If you want them to have signing authority for the license and be able to communicate with the CSLB, you will want to add them. 

 

Q: We obtained our license about seven years ago with a Responsible Managing Employee (RME) who went through the testing and fingerprinting for our Company license. As you know, you helped us with putting one of our Officers on the license as the RMO, replacing our RME, and he was able to waive the testing requirement. The prior RME is still with our company but he is wondering if there is a way for him to keep his “license” active.

A: Your previous RME can obtain a sole owner license, or he can attach it to a corporation or LLC. From the date of his disassociation from your company, he has five years to attach his qualification to a license without having to re-test.

 

Q: As you aware, I passed my CA exams earlier this week and as soon as I provide the Qualifier bond I will be added to our Company license. I just noticed that you also handle Nevada. Can I apply for reciprocity and do the same thing on our Nevada license?

A: Nevada requires that you have been actively licensed as the Qualifying Individual for the previous four years in a reciprocal State. We can certainly do the same process in Nevada, but you will be required to document your experience and take and pass both the Law and Business exams.

 

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 info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

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Capitol Connection Q&A for Contractors 4-22-2024

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

Almost all rules have, but an expert can share what may be little known exceptions! Why would a licensed contractor choose a 64 hour work week? An elevator contractor learns that what went down can come up again, but there will be a test…

Q: Instead of converting our entity type from an ’S’-Corp to an Limited Liability Company (LLC) in Nevada, we would prefer to hold separate licenses under the LLC. Do you know the limit for the number of licenses for which a Qualified Individual is permitted to qualify in Nevada? I am struggling to find that answer on the Board’s website.

A: A Qualified Individual can qualify more than one license in Nevada if one of the following conditions exists:

  1. The individual owns at least 25% of each company in which he/she qualified for, OR
  2. One licensee owns at least 25% of the other license.

There is nothing in Nevada which specifies a limit to the number of licenses a person can qualify as long as one of the above conditions exists.

 

Q: I am an Responsible Managing Employee (RME) on a license (CA) and would like to know if I can qualify two separate businesses with the same ownership?  I have no stake in either one.  One company has me as the RME/Qualifier and I would like to be the Qualifier for the other as well.  The classifications would be the same.  I receive a paycheck from both companies and work over 32 hours at each business.

A: An RME can only qualify one license unless either a) one entity you are qualifying directly owns at least 20% of the other, OR b) the majority of the Officers/Managers/Members are the same on both licenses. You will be required to provide a statement to the CSLB certifying that you work for over 32 hours a week for each company and will continue to do so while you are acting as RME for both entities.

 

Q: We have an incorporated General contractor’s license. When reviewing our list of Officers we saw that our previous “Board Chair” was on there listed as an Officer. We dissociated her when she left our Board of Directors, however we weren’t sure if we needed to add the current Board Chair to our license or not. I couldn’t find anything that said it was required to have that particular position on the license. Do you have any guidance there?

A: The CSLB’s rule is Corporations are only required to list their President, Secretary, and Treasurer on the contractor’s license. Any additional officers that you have are optional. If you want them to have signing authority for the license and be able to communicate with the CSLB, you will want to add them.

 

Q: I used to have an elevator company that had a “C-11” license. It was suspended eight years ago. I shut the company down and I want to start another company. Can I get another license under a different company name? Would I have to take the exam again?

A: Thank you for contacting Capitol Services. You should be able to obtain a license again, but of course it depends on the reason for the prior suspension. Unfortunately, since it’s been over five years since you were licensed, you would be required to take the exams again.

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 info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

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Capitol Connection Q&A for Contractors 4-15-2024

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

One contractor discovers while you can be one, you can’t be called one. I also dip into the strange way waterproofing is handled by contractor rules, and an attorney finds that the ‘fourth’ is strong in this one… 

 

Q: I want to add one of my long time employees to our license as an Officer. However, he doesn’t have any ownership in the Company and is not listed on the CA Secretary of State records, nor do I really want him to be. I just need him to be able to communicate with the CSLB about licensing issues. They will only talk to individuals listed on the license. Am I able to add him with just the title “Officer”?

A: The CSLB doesn’t accept “officer” as an official Officer title. The CA Secretary of State (SOS) only requires that a President, Secretary, Treasurer, and sometimes Director be listed on their records. As long as you give him a title, which is not one of those, you do not need to add him to the SOS records. Examples are Vice President, Assistant Secretary, Chief Compliance Officer, etc. 

 

Q: Is there a “waterproofing” license/classification we can add to our license? We have a “C-39” (Roofing) and a “C-17” (Glazing) license. Some of our customers purchase a waterproofing package from us where the waterproofing may go in the shower surround, or concrete, or whatever the case may be. We are looking for something to cover us for all of the waterproofing we do.

A: The short answer is no, there is no waterproofing classification. The long answer is, there are several classifications that can perform waterproofing. Certainly, the “C-39” (Roofing) can when it’s related to the roofing. Waterproofing is covered under the classification you are performing the work in relation to. For example, waterproofing concrete could be covered under “D-06” (Concrete Related Services), or if you are applying a protective sealant, it could be covered with the “D-12” (Synthetic Products) classification. Waterproofing a shower surround would again depend on what you are doing/applying to waterproof it. Feel free to call my office to discuss. 

 

Q: I am an Attorney and I have a situation in relation to a case I’m reviewing. I’m seeing that the same individual is on 3 corporate licenses and one individual, all concurrently Active now. Is this possible, or is this an oversight by the CSLB?  I know you can be an Responsible Managing Officer (RMO) on 3 but can you still have a fourth one as an individual?  

A: Yes. The way B&P Code section 7068.1 is written, as long as the Qualifying Individual meets the guidelines, “a qualifying individual may act as the qualifier for no more than three firms in any one-year period.” Further, it defines “firm” to mean a partnership, a limited partnership, a corporation, or an LLC. Sole Proprietorships do not count in the rule of three.

 

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 info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

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Capitol Connection Q&A for Contractors 4-8-2024

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

While contractor law is written in ink the words can be subject to interpretation. That is where expert understanding is sharpest in avoiding ‘errors’ or misunderstanding…

 

Q: It appears that, per California Business & Professions Code § 7071.19, professional liability insurance and errors & omissions insurance will also be required at the time of obtaining the General contractor license. Is that your understanding as well? I know when we spoke you had mentioned the need for bonds, liability, and Worker’s Compensation insurance. Are we to ignore the regulation in regards to the E&O insurance?
A: No, you do not ignore B&P Code 7071.19 which is referring to the requirement for liability insurance coverage for Limited Liability Companies (LLC). They use the words “errors” and “omissions” in the statute to describe the reason for needing to maintain liability insurance – “maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the contracting services it provides”. But the CSLB does require that you obtain or show proof of a separate E&O policy. They require that an LLC maintain at least $1 million in general liability coverage.

 

Q: We need to replace our Qualifying Individual who left the Company recently. The person who makes the most sense to have as our new Qualifier is one of our Officers who is not planning on leaving the company until retirement.

            However, he is concerned about providing his personal information to the CSLB. Can you confirm exactly what personal information he would be required to disclose? Secondly, specific to his ownership shares, is this something that the general public will be able to see online?
A: The CSLB requires the Qualifying party list their full name, residential address, phone number, date of birth, social security number, and percentage of ownership on the application. They ask for a driver’s license number but it’s not required. The CSLB never shares personal information, even if someone was to request a copy of a licensee’s entire file. They always withhold all personal information such as DOB and SSN.
With regards to ownership, on the CSLB’s website the general public will not be able to see the specific ownership amount the Qualifying Individual has in the company, however they will be able to see whether the person owns more than 10%, or less than 10%. This is because if the RMO/RME owns less than 10% of the company, they are required to have a Bond of Qualified Individual on file. If the RMO/RME owns more than 10%, no Qualifier Bond is required. Outside of the website, if the general public wanted to see the specific ownership the Qualifier owns, they would need to make a copy request with the CSLB and pay the fee.

 

            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 info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

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