The following
California Industry Bulletin highlights the new laws effecting the construction
industry that went into effect
January 1, 2007.
None of these laws will require users of our software to change their forms.....
providing, of course, the form software being used by our customer was purchased
or upgraded in 2006. Remember, California did an almost complete rewrite
of Home Improvement Laws last year, 2006. We get calls every day from
Contractors who have gotten into trouble because they were using old, pre 2006
forms. Don't make this same mistake, it is not worth the headaches of your
business being shut down until you show compliant forms, fines (at
least $750), and problems collecting money rightfully owed you. Call us at
1.800.820.5656 and purchase compliant forms and/or form software now!
New Law Cracks Down on Old Contracting Problem
Series of new law go into effect with start of
new year (2007).
Sacramento
–
Illegal contractors who try to skirt the law by operating with someone
else’s license number face new tougher penalties. This is one of the new
laws taking effect at the Contractors State License Board (CSLB) in January
2007.
The law created by
AB
2897 makes it a criminal charge for anyone involved with a revoked license
(member, officer, director, owner, or partner) to knowingly let the revoked
person act as a contractor or hire revoked licensees as anything other than
a non-supervising employees.
“Some individuals have
tried to get around a revoked license by operating with another license
taken out by friends or family members,” said CSLB Registrar Steve Sands.
“This breaks the cycle of illegal operation.”
One example is a
contractor, Richard Ladd Turek from the San Diego area, who had his license
revoked, was later caught using his wife’s license number and then his
father’s license number to continue to contract and harm consumers. July
27, 2006, Richard Turek pleaded no contest to contracting without a license
and was sentenced to three years summary probation and a $1,200 fine.
However, due to AB 2897 a violation of this section is now a misdemeanor
punishable by a fine of not less than four thousand five hundred dollars
($4,500), by imprisonment in a county jail for not less than neither 30 days
nor more than one year, or by both the fine and imprisonment.
Other new laws taking place at the Contractor’s Board as of January 1, 2007
include:
Workers Compensation
(AB 881) Workers
compensation will be mandatory for C-39 Roofers. Other licensees can still
get by without it, if they do not have employees. Most roofers need workers
to do the job. But, it was proven that a significant number were not
reporting that they had workers
Bond Amount Increases
The amount for a
contractor bond goes up from $10,000 to $12,500. (Business and professions
code section
7071.9). This is the
bond that all licensed contractors are required to have in California. It
is money that homeowners, employees or others hurt by a licensee can file
against for restitution.
The Contractors State
License Board operates under the umbrella of the California Department of
Consumer Affairs. The CSLB licenses and regulates California’s
304,000 contractors, and investigates more than 20,000 complaints against
contractors annually. In fiscal year 2005-06, the CSLB helped consumers get
more than $36 million in restitution.
New CA Law will Require All Roofing Contractors with Active
Licenses to Have Workers’ Compensation Coverage
New requirements take effect on January 1, 2007
"Sacramento
–
A new law signed by Governor Arnold Schwarzenegger on Friday May 26 affects
roofing contractors in California. Assembly Bill (AB) 881 contains new
licensing requirements for all 6,000 licensees with an active Roofing
(C-39) classification. If you hold the Roofing (C-39) classification, you
must take action as outlined below or your right to perform roofing work in
California will be suspended until you comply with the new law.
Beginning January 1, 2007, all active licensees holding the Roofing (C-39)
classification must have either a valid Certification of Workers’ Compensation
Insurance or a valid Certification of Self-Insurance on file with the
Contractors State License Board (CSLB). AB 881 amends Section 7125 of the
Business and Professions Code to require that all Roofing (C-39)
contractors carry workers’ compensation coverage effective January 1, 2007,
regardless of whether or not they have employees. Failure to have one of the
required certifications on file with the CSLB will result in the removal of the
Roofing (C-39) classification from a license with multiple classifications or in
the suspension of a license where the sole classification is the Roofing (C-39)
classification. No exemptions will be granted.
NOTE:
Inactive Roofing (C-39) contractors will not be subject to this requirement as
long as they remain in inactive status. In order to return to active status,
they would need to have one of the required certifications on file with the
Board.
In addition, AB 881 adds Section 11665 to the Insurance Code, requiring insurers
who issue workers’ compensation insurance to Roofing (C-39) contractors to
perform an annual payroll audit for the contractor. The insurer may impose a
surcharge on the policyholder for the audit.
The new workers’ compensation insurance requirements imposed by AB 881 will
remain in effect until January 1, 2011.
If you have questions about these requirements, please contact your workers’
compensation insurance provider or the Contractors State License Board’s
Workers’ Compensation Unit at the above address."
IF
YOU DO NOT HAVE WORKERS' COMP NOW BETTER START SHOPPING FOR A POLICY BEFORE THE
RUSH. HISTORICALLY, WHEN THIS HAPPENS RATES GO UP AS SUPPLY GOES DOWN!!
AND... be sure you are using 2006 compliant roofing contracts. .. SEE THE
NEXT TOPIC BELOW
CALIFORNIA HOME IMPROVEMENT CONTRACTS FOR 2006 SB 30 then SB 1113 now AB 316
CA LAW SAYS THROW AWAY YOUR OLD
CONTRACT FORMS AND UPDATE YOUR CONTRACTS RIGHT NOW!!!
The Bottom Line: All home improvement contracts that
do not include the new laws from SB 30, SB 1113, and AB 316 are not legal for
use in California!
If your contracts are not 2006 versions, do not use them any longer. The
penalties are stiff and include fines, jail time, loss of lien rights, loss of
your right to sue in court and many other unpleasant things that you do not need
to deal with just because you want to use up your old forms or do not want to
upgrade your form software.
From the California
Assembly, AB 316.....
"The home
improvement business in California constitutes a large portion of the state's
construction industry. Because of the very nature of the home improvement field,
there is a potential for problems or abuses to occur. Abuses are usually caused
by unlicensed operators or unethical or incompetent contractors. Problems can
occur because of a general misunderstanding of basic requirements and of the
agreement entered into by the owner and the contractor. Special requirements
concerning the home improvement contract were placed into the law as an attempt
to eliminate as many of these problems as possible. It is important that
contractors keep abreast of current requirements.
The most recent
changes to home improvement contract law resulted from the passage of Senate
Bill (SB) 30 in 2004, and SB 1113 and Assembly Bill (AB) 316 in 2005. The
Legislature made significant additions to the information the contractor must
provide to the buyer of home improvements. The idea behind the legislation is to
use the contract itself to inform homeowners of the most important contract
requirements. With this information in hand, consumers will be better able to
understand the process. The Board expects the availability of this simple
consumer protection information will reduce the number of disputes between
contractors and homeowners and, therefore, the number of complaints homeowners
make to the Board.
SB 30 maintained many of the existing home improvement contract provisions and
added some new requirements as well. Among the requirements: any changes made to
contracts must be in writing, be legible, be easy to understand, and inform a
consumer of his or her right to cancel or rescind the contract, and a home
improvement contract must contain various information, notices, and disclosures
for the protection of the consumer. SB 30 also created a "service and repair
contract" to be used by licensed contractors for jobs of $750 or less, provided
that the contract meets all four of the new requirements. The bill enacted
various disclosure requirements applicable to the service and repair contract.
SB 30 provided that any violation of the provisions subjects the contractor to
discipline. The bill made conforming changes and revised and recast certain
existing provisions regarding home improvement contracts and related matters. SB
30 was to become operative on July 1, 2005.
SB 1113 postponed
implementation of the provisions of SB 30 until January 1, 2006. The bill also
revised and recast some of the provisions and made other related changes in
other provisions of law. SB 1113 took effect immediately as an emergency
statute.
AB 316 revised and
recast the service and repair contract requirements and set forth information,
notices, and disclosures required to be included as part of the contract. In
addition, a service and repair contract that does not meet specified
requirements is subject to the requirements applicable to a home improvement
contract regardless of the aggregate contract price.
In developing
contracts, contractors should pay strict attention to the requirements for
typeface of the notices and disclosures. For example, unless a larger typeface
is specified, text in any printed form shall be in at least 10-point type and
the headings shall be in at least 10-point boldface type.
"
MAJOR CALIFORNIA
HOME IMPROVEMENT LAW
CHANGE FOR 2005. SB30
"Section 7159 of the California Business & Professions Code.
Under existing law, Section 7159 provides specific requirements that must be
included in home improvement contracts. Effective July 1, 2005, Senate Bill 30
(See 7159 et seq.) will replace Section 7159. Under the new law, contractors are
required to include various disclosures and notices in their contracts. SB 30
also creates a new service and repair contract for jobs of $750 or less. A
licensed contractor using a contract that meets all the new service and repair
contract requirements can perform a service and/or a repair without running
afoul of the three-day right to cancel." ..CSLB
Please note that the changes in Section 7159
essentially re-write California Home Improvement contract requirements. All
users of our software will need to upgrade to the new forms when we have them
available after January 1, 2006. The law changes we
are speaking of do not go into effect until January1, 2006.
****(Date has been pushed up from July 1, 2005 until January 1, 2006!)****
CALIFORNIA PRELIMINARY 20-DAY NOTICE
CHANGE FOR 2004
SB134 BECOMES LAW! Changes to California Civil Code Section 3097 and
Section 3259.5. The bottom line- Be sure to throw out your old 20-Day
Notices and use the new ones mandated by law (naturally, we have them and the
new version is included in all our CA software
packages).
For details click on this link: SB
134
UPDATE ON HOME
IMPROVEMENT CERTIFICATION (HIC)- 10-03
From the California Contractors State License
Board:
"Please note that effective January 1,
2004, Home Improvement Certification (HIC) will no longer be required.
Legislation that created the HIC program will sunset on that date. All of the
information contained in the HIC exam will be incorporated into the law portion
of the Contractors License Exam, so it will no longer be necessary for
contractors to obtain the separate certification. After January 1, 2004, HIC
will not appear on the list of classes/certifications held by the contractor on
license inquiries, and may not appear on the contractor's pocket license."
IMPORTANT
INFORMATION ABOUT 3 DAY RIGHT TO CANCEL FOR CALIFORNIA
Do not forget that you must give your customers the right
to cancel their contract or agreement with you within 3 business days (7
business days for disaster repair in California), for any home improvement work
you do over $25 in value. This is a Federal law and California law,
as does all state law, follows Federal law. Many California contractors
are confused about the dollar value before the 3 day right to cancel must be
given because in California, you do not need to write a contract or even be
licensed for work valued under $500. Even so, you must give the 3 day
right to cancel when the value of the work is $25 or more. This means
that if you do a roof repair or clean a clogged sewer, for example, and the job
value is over $25 but less than $500, you MUST STILL GIVE THE 3 DAY RIGHT TO
CANCEL! A customer cannot just voluntarily waive their right to cancel
to allow work to begin before the three day period ends under most
circumstances. The law does allow for a waiver of the right to cancel in what is
called "the making of emergency or immediate necessity repairs or services
that are necessary for the immediate protection of persons or real or personal
property." In this case, the customer can waive, in their own
words, their 3-day right to cancel so work can begin immediately. We
have form CNW- WAIVER of 3 DAY RIGHT TO CANCEL for use by your customers
when a waiver is needed so emergency or immediate necessity repairs or services
can begin immediately. If you have an doubt about the way your Company is
handling the 3 day or 7 day right to cancel with your home improvement
customers, we urge you to contact your attorney to discuss this.
YOU CAN NOW START JOBS UNDER $750 IN CALIFORNIA
IMMEDIATELY WITHOUT WAITING THREE DAYS BY USING THE NEW FOR 2006 SERVICE AND
REPAIR CONTRACTS....WE HAVE THEM!
Call us 1-(800) 820-5656
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Revised: 01/07/08
