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GC/carpenter
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Mike and License Guru. I respect your opinions but I used to teach Contractors License Law. The law is referring to the project value that the sub is bidding on, not the job that the contractor bid on in the first place. I taught Contractors License Law for years. Don't take my word for it, call the Contractors State License Board.
License guru worked for the board
 

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GC/carpenter
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What keeps me from just splitting the project up into separate 500 dollar segments or phases?
 

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What a wonderful discussion:blink:

I have read the rules innumerable times and it is specific. If the project is $500 or more. That's it. So if I as a GC or C10 bid on a project and it's $500 or more, I have to have a license. But, according to the rules, if I sub out a tiny part of it and it's $499.00 or less, the sub does not have to have a license. Technically, I could sub it out to the homeowner. I am the guy who bid on the project, and, I'm the guy who most likely pulled the permit. Depending on the jurisdiction (ie: city), they usually have you write down your CSLB license number.

However, if a gardening and maintenance guy goes out and trims trees (less than 15ft high.....I am taking this for granted since I haven't read the reg's on this), mows the lawn and so forth for a business or homeowner....and let's say the monthly contract is $499....then he doesn't have to have a landscaping license or whatever license...and would be in accordance with the $500 and over rule. The project, whether it is daily, weekly, monthly is less than $500.00. The guy might have 20 projects each each month @ $499.00 each = $9, 980.00 per month. Not too bad.

Unless the client, city, county or state requires you to have bonds, insurance, business license, fictitious name, and so forth......you don't need to have any of that. Just play it fast and loose.
 

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GC/carpenter
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41,018 Posts
So what if I'm doing plumbing I bid the sink for 499. Done finished the sink. Now I bid the toilet for 499. I'm good I don't need license?
 

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Calif Licensing Expert
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1,901 Posts
Mark (License Schools) may clarify this further (if you want to, Mark), but the rule is "...if the total cost (labor and materials) of one or more contracts on the project is
$500 or more"... a license is required.

So, if someone takes a job/project/contract with a monthly cost of $499, or $5988 a year, a contractors license would be required.

I believe the $499 limit was created so that a "handyman" could do small jobs without being licensed. If someone performs monthly work on one job/project and the total earned on that project (over time) is over the $499 limit, then they would be in violation.

If my take on this is incorrect, please post your comment.
 

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Calif Licensing Expert
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So what if I'm doing plumbing I bid the sink for 499. Done finished the sink. Now I bid the toilet for 499. I'm good I don't need license?
Mike, as I just posted, it's based on the job/project. One client, one job, one fee. If over $499, a license would be required.
 

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So what if I'm doing plumbing I bid the sink for 499. Done finished the sink. Now I bid the toilet for 499. I'm good I don't need license?
I am fairly certain that that technique has been tried in the past and that is why the CSLB refers to the "project" price. Personally, and in my opinion, you could probably do this all day long and call every little thing a separate project, and, never get caught unless someone turned you in.

However, in the big scheme of things, you really are doing a bathroom remodel, or at least the plumbing. And it's over $500. If you, and, a bunch of other unlicensed guys came in separately and each did a little piece that was less than $500, that would appear to be legal.

I am not the complete expert on this, but I would think there would be a time limit on what would be considered a small independent project vs a large project .... like a bathroom remodel or plumbing upgrade...whatever
 

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Calif Licensing Expert
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From the California License Law & Reference Book

3. Is anyone exempt from the requirement to be licensed?
Yes. Here are some of the exemptions:
● Work on a project for which the combined value of labor,
materials, and all other costs on one or more contracts is less
than $500 falls within the minor work exemption. Work which
is part of a larger or major project, whether undertaken by the
same or different contractors, may not be divided into amounts
less than $500 in an attempt to meet the $500 exemption;
● An employee who is paid wages, who does not usually work in
an independently established business, and who does not have
direction or control over the performance of work or who does
not determine the final results of the work or project;
● Public personnel working on public projects;
● Officers of a court acting within the scope of their office;
● Public utilities working under specified conditions;
● Oil and gas operations performed by an owner or lessee;
● Owner-builders who build or improve structures on their own
property if they either do the work themselves or use their own
employees (paid in wages) to do the work. This exemption is
only valid if the structure is not intended to be offered for sale
within one year of completion;
● Owner-builders who build or improve structures on their own
property if they contract for the construction with a licensed
contractor. This exemption is applicable to the construction of
single-family residential structures only if no more than four of
such structures are offered for sale in any one calendar year;
● Owner-builders who improve their main place of residence,
who have actually resided there for one year prior to
completion of the work, and who complete the work prior to
sale. This exemption is limited to two structures within a
three-year period;
● Sale or installation of finished products that do not become a
fixed part of the structure; 3. Is anyone exempt from the requirement to be licensed?
Yes. Here are some of the exemptions:
● Work on a project for which the combined value of labor,
materials, and all other costs on one or more contracts is less
than $500 falls within the minor work exemption. Work which
is part of a larger or major project, whether undertaken by the
same or different contractors, may not be divided into amounts
less than $500 in an attempt to meet the $500 exemption;
● An employee who is paid wages, who does not usually work in
an independently established business, and who does not have
direction or control over the performance of work or who does
not determine the final results of the work or project;
● Public personnel working on public projects;
● Officers of a court acting within the scope of their office;
● Public utilities working under specified conditions;
● Oil and gas operations performed by an owner or lessee;
● Owner-builders who build or improve structures on their own
property if they either do the work themselves or use their own
employees (paid in wages) to do the work. This exemption is
only valid if the structure is not intended to be offered for sale
within one year of completion;
● Owner-builders who build or improve structures on their own
property if they contract for the construction with a licensed
contractor. This exemption is applicable to the construction of
single-family residential structures only if no more than four of
such structures are offered for sale in any one calendar year;
● Owner-builders who improve their main place of residence,
who have actually resided there for one year prior to
completion of the work, and who complete the work prior to
sale. This exemption is limited to two structures within a
three-year period;
● Sale or installation of finished products that do not become a
fixed part of the structure;
● A seller of installed carpets who holds a retail furniture
dealer’s license but who contracts for installation of the carpet
with a licensed carpet installer;
● Security alarm company operators (licensed by the Bureau of
Security and Investigative Services) who install, maintain,
monitor, sell, alter, or service alarm systems (fire alarm
company operators must be licensed by CSLB); and,
● Persons whose activities consist only of installing satellite
antenna systems on residential structures or property. These
persons must be registered with the Bureau of Electronic and Appliance Repair.
 

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Mark (License Schools) may clarify this further (if you want to, Mark), but the rule is "...if the total cost (labor and materials) of one or more contracts on the project is
$500 or more"... a license is required.

So, if someone takes a job/project/contract with a monthly cost of $499, or $5988 a year, a contractors license would be required.

I believe the $499 limit was created so that a "handyman" could do small jobs without being licensed. If someone performs monthly work on one job/project and the total earned on that project (over time) is over the $499 limit, then they would be in violation.

If my take on this is incorrect, please post your comment.
Phil,

I don't want to convolute this conversation more, but, my analogy was based on a month to month contract that is renewed each month. Obviously this is hypothetical, but for discussion's sake, if I have you sign a contract with me that states: I will trim your trees and mow your lawn for the month of June @ $499.00, then that's it. At the end of June I come back to you and have you sign a similar contract for July and so forth for each month for a year.

Does that violate the $500 rule ?
 

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Calif Licensing Expert
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1,901 Posts
I guess it comes down to an attorney, or some knucklehead at the cslb, to interpret this:

● Work on a project for which the combined value of labor,
materials, and all other costs on one or more contracts is less
than $500 falls within the minor work exemption. Work which
is part of a larger or major project, whether undertaken by the
same or different contractors, may not be divided into amounts
less than $500 in an attempt to meet the $500 exemption;
 

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1,443 Posts
I guess it comes down to an attorney, or some knucklehead at the cslb, to interpret this:

● Work on a project for which the combined value of labor,
materials, and all other costs on one or more contracts is less
than $500 falls within the minor work exemption. Work which
is part of a larger or major project, whether undertaken by the
same or different contractors, may not be divided into amounts
less than $500 in an attempt to meet the $500 exemption;
Thank you Phil.

My response would be: "just get a freaking license and quit rolling the dice like all the other hacks out there":jester:
 

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School Director
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64 Posts
Phil-You are absolutely right. I mistakenly stated "over $500" when, in fact, as you said, the law is $500 or more. So $499.99-No license required, $500.00-License required. Thanks for the clarification. Also, thanks for the message. I hope you received mine. With regards to the whole project, the law is referring to the whole job that the sub is bidding on, not the whole job that is being done like a house or office building. Let me know if that is your take as well.

CWATBAY-Just FYI-As I stated earlier, no license is required to mow lawns or trim trees.
 

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Phil-You are absolutely right. I mistakenly stated "over $500" when, in fact, as you said, the law is $500 or more. So $499.99-No license required, $500.00-License required. Thanks for the clarification. Also, thanks for the message. I hope you received mine. With regards to the whole project, the law is referring to the whole job that the sub is bidding on, not the whole job that is being done like a house or office building. Let me know if that is your take as well.

CWATBAY-Just FYI-As I stated earlier, no license is required to mow lawns or trim trees.
Ok, mowing and trimming was a bad example, but that is kinda what the OP was alluding to in his original post...unless I misinterpreted it.
 

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I went back and actually re-read the original post.

So, I'm going to take my C10, and starting tomorrow, I'm going to go out and start trimming the crap out of small fruit trees whenever I see em :clap:
 
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