Building contracts are subject to requirements set out in California's Business and Professions Code in the Contractors' State License Law. The licensing requirements, which are liberally construed to protect the public, are to ensure that the contractor has the requisite skill and character and understands the laws and codes governing construction. Penalties for noncompliance can be severe for both the contractor and customer, and include liability of the property owner should they hire an unlicensed contractor whose employee gets hurt on the job. The non-compliant contractor may find that operating without a license or in violation of the License Law will imperil his or her ability to collect for work performed, may make him or her responsible for unpaid wages of a subcontractor, and may preclude him or her from enforcing lien rights or even subject him to criminal liability.
Thus it is extremely important that the statutory requirements of all parties to a construction contract be followed precisely. Proper contract documents should be read and understood before the project begins. Subcontractors should give the owner a written notice that the subcontractor has lien rights. The time for contractors and subcontractors to file their liens is short after the job is completed, and they must be familiar with what triggers the commencement of the period. There are special rules for contracts with governmental entities. If the project goes off course, the owner may need advice on how to get it on track again. If payment is delayed or refused, the contractor or subcontractor may need advice on how to proceed without making an error that exposes himself to monetary damages. At the first sign of a concern, or if communication meets an impasse, the affected party should seek legal assistance or contact the Contractors' State License Board for assistance. Marvin Pederson can resolve these kinds of matters for you.