California Contractor's Bond Claim

 
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Old 05-28-2017, 02:58 PM   #1
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California Contractor's Bond Claim


I had a customer recently make a claim against a bond I had in 2015. I am currently with another bond company. The old bond company is now asking for $7500 as collateral in case they have to pay this claim. Has anyone been through anything like this before? Also, how much "weight" does the old bond company hold with the CSLB? Thanks.
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Old 05-28-2017, 03:31 PM   #2
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Re: California Contractor's Bond Claim


I'm not in California so maybe you will be forced to do something thing different, but I would have a hard time giving them collateral, seems like they would be more willing to pay out "your" $

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Old 05-28-2017, 03:41 PM   #3
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Re: California Contractor's Bond Claim


The bond company would notify the cslb. I'm not sure what the rule is about it being a former bond with a different surety, but it's highly possible the ole surety could file a court claim that would eventually affect your license. You can try to get someone on the phone at the cslb bond unit for clarification. 916 255 4050
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Old 05-28-2017, 10:16 PM   #4
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Re: California Contractor's Bond Claim


Hey Phil.

It seems that you might be able to offer some insight on my current situation with the claim against my bond. I've been in the business over 20 years with a spotless record. No complaints to the CSLB, no bond challenges, no problems whatsoever. Until recently. In June of 2015, a couple very new to real estate hired me to work on a house they bought. Their intentions were to sell and make a profit. The 1st contract was for a 99% remodel. The plan was to demo everything, leave one wall standing and add an additional 900 square feet to the small 609 square foot house they purchased. However, thru a series of unfortunate events, the scope of work changed from 99% remodel to new construction in the eyes of L.A. County Building and Safety. We discussed everything and they decided they still wanted to move forward with me with the condition of someone they hired managing the project. In any case, the project stalled again in August of 2016 due to problems with the new set of plans not being able to pass thru plan check at LA County Buikdng and Safety. The plans were drawn up by the same person they wanted managing the project. Long story short, they fired me then accused me of abandonment and fraud to my current bond company, 2 old bond companies, and reported me to CSLB. My current bond company flat out rejected their claim. As did one of the older bond companies. This bond company from 2015 is the one asking for collateral. The CSLB has started an investigation. I can account for every penny and I have proof that I did not abandon the project. What should my expectations be especially with the CSLB? Thank you.
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Old 05-28-2017, 10:44 PM   #5
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Re: California Contractor's Bond Claim


If you can prove that you were fired and didn't abandon the project, and show that the two bond companies rejected their claims, and have a properly formatted contract with the client, you should be ok. But I wouldn't be surprised if the cslb found some ticky tack violation to base a letter of warning on.
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Old 05-29-2017, 11:03 AM   #6
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Re: California Contractor's Bond Claim


It sound like you are not getting the full story. How can a consumer make a random claim against a bond. Don't they have to get a qualified judgement of some type?

Could this be a scam?
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Old 05-29-2017, 02:47 PM   #7
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Re: California Contractor's Bond Claim


A consumer can make a claim against a bond or against your license quite easily. Well, at least in California. All they have to do is voice some sort of displeasure with the job, call the CSLB or the bond company and that's it. They do not need any sort of of qualified judgement. Of course, the burden of proof falls on their shoulders. Nevertheless, initiating the claim is easy.
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Old 05-29-2017, 02:50 PM   #8
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Re: California Contractor's Bond Claim


The ease at which any type of claim can be made is very new to me. I've been licensed, bonded and insured(workers comp and general liability) for over 20 years without any problems whatsoever.
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Old 05-29-2017, 02:55 PM   #9
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Re: California Contractor's Bond Claim


I thought the way a bond worked is the bonding agent either paid or did not pay and then if they did pay they sue you for payment. The bonding agency doesn't get paid before they pay a claim; that's crazy. Sounds like the bonding agency is seeing if they can use your money to defend their bond.

Can you initiate an arbitration and offer the rookies a couple grand to f off?
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Old 05-29-2017, 02:55 PM   #10
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Re: California Contractor's Bond Claim


Kfunnyman, I re-read your posts. Sorry you are going through this. It's a PITA

Check the original Bond Contract, they may or may not be able to ask for a deposit--if they can't don't give them any money.

If the CSLB is in the initial stages (intake stage) fight hard before it gets to an investigator. If it's the hands of an investigator, get an attorney. These things can grow legs. At each successive stage, the process becomes more complicated and possible destructive.

If you need the name of a good attorney, PM me and I'll forward a name.

If you crossed your T's, you should be fine. But it will take some money to prove it.

For the most part the CSLB says "your guilty until proven innocent" Or "we know you did something wrong, tell us what it was"

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