The City of Beverly Hills holds all construction to a high standard in order to maintain the safety and well-being of our citizens and our built environment. Therefore, the City of Beverly Hills is required by law to verify all construction and contractors' licenses working throughout the city. The Division of Building and Safety is the enforcing agency for all commercial and residential construction.
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In the State of California, it is illegal for an unlicensed person to perform contracting work on any project valued at $500 or more in labor and materials. Furthermore, unlicensed contractors do not have insurance and are not bonded. The Contractors' State License Board (CSLB) provides tools which can be used to verify license status and pending complaints, if any.
|File a Contractor State License Complaint
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Sometimes problems can arise throughout the construction process. Whether your contractor fails to fulfill a contract agreement, or poor craftsmanship leads to financial hardship, there is a way to hold contractors accountable for their work. One of the ways to do this is to file a complaint with the CSLB. Complaints can be filed against both licensed and non-licensed contractors alike. Just visit http://www.cslb.ca.gov/Consumers/Filing_A_Complaint/ in order to learn more about the complaint process and file a complaint online.
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|Some property owners would prefer not to hire a contractor to oversee construction on their property, and would rather do the work themselves or hire subcontractors. If you are one of these people, you are considered an Owner-Builder. However, there are many important responsibilities and risks every owner-builder should know about before making the decision to not hire a licensed general contractor.
What is an owner-builder?
An owner-builder is the person who owns the property and acts as their own general contractor on the job. They either do the work themselves or have employees (or licensed subcontractors) working on the project. An owner-builder is also a property owner who does not hire a licensed contractor.
What are the responsibilities of being an owner-builder?
When you sign a building permit application as an owner-builder, you assume full responsibility for all phases of your project and its integrity. You may be considered an employer if you hire unlicensed contractors to do the work. This may make you responsible for:
- Registering with the state and federal government as an employer
- Withholding state and federal income taxes, federal Social Security taxes, paying disability insurance, and making employment compensation contributions
- Providing workers’ compensation insurance
Some other general responsibilities include:
- Supervising the job, including scheduling workers and obtaining building permits and requesting applications yourself
- Scheduling inspections, correcting the work, and getting it re-inspected if any of the construction doesn’t pass building inspections
- Making sure all workers and material suppliers are paid, or face the possibility of mechanic’s liens against the project property
What are the risks of being an owner-builder?
Because you may be considered an employer by hiring unlicensed subcontractors or laborers to do the work, there are a number of risks involved. These can range from financial risks to liability risks, both of which may outweigh the financial advantage of being an owner-builder versus hiring a licensed general contractor who is experienced in dealing with these issues.
Some risks you should consider:
- Unless you are knowledgeable about construction, mistakes can be costly and take additional time and money to repair.
- If your workers are injured or you employ unlicensed subcontractors who do not carry liability insurance or worker’s compensation, you can be asked to pay for injuries and rehabilitation through your homeowner’s insurance policy or face lawsuits against you.
- If you do not pay subcontractors and suppliers on schedule, they may file a mechanic’s lien against your property. To learn more about mechanic’s liens click on the following link http://www.cslb.ca.gov/Consumers/Legal_Issues_For_Consumers/Mechanics_Lien/
Are there any restrictions to being an owner-builder?
Yes. There are different restrictions for different types of projects.
For home improvements:
- The work site must be your principle place of residence that you have occupied for 12 months prior to completion of the work
- The work must be performed prior to the sale of the home
- You cannot take advantage of this exemption on more than two structures during any three-year period (Business and Professions Code Sec. 7044)
For construction of new single family residences:
- You are limited to selling four or fewer residential structures in one calendar year
- The work necessary to complete the project(s) must be performed by licensed subcontractors
What do I do once I have decided to be an owner-builder?
Once you have decided you want to take on the responsibilities of being an owner-builder the Community Development Department requires two documents to completed for each permit obtained as owner-builder.
Need more research? Here are a few good places to start:
- Contact the city’s finance office at (310) 285-2419 to find out if you need to obtain a business license.
- Contact the state Employment Development Department and Franchise Tax Board for instruction on registering as an employer.
- Contact the Internal Revenue Service (IRS) for information on registering as an employer.
- Obtain workers’ compensation coverage, and inquire with your insurance company about any need to increase your liability coverage.
Web Page Updated: Wednesday, January 31, 2018