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Goin' Down in Flames....
Highwayman
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Discussion Starter · #1 ·
I've been all over the CSLB website, and read the book "California License Law and Reference book", but I am still having trouble figuring what is and is not required for a Commercial Contract, like Mechanics Lien warnings, or disclosures about insurance.

Anybody who's done Commercial work in California care to help out? Griz??
 

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I'm a Mac
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I left in 2009, but as I recall CSLB rules were more geared towards homeowner protection, commercial did not require all the notices. Hell you could be a B licensed contractor who does small jobs only for Mrs Smith and if someone is dumb enough to give you a 10 million dollar contract it was yours and no additional qualifications required.
 

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GC/carpenter
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Chris Johnson said:
I left in 2009, but as I recall CSLB rules were more geared towards homeowner protection, commercial did not require all the notices. Hell you could be a B licensed contractor who does small jobs only for Mrs Smith and if someone is dumb enough to give you a 10 million dollar contract it was yours and no additional qualifications required.
Why would there be additional qualifications needed? Regardless of how much the contract is for, you still need to have four years of experience in the trade your licensed for. The free market determines who can or can't handle the larger projects.
 

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Preliminary Notice

I've been all over the CSLB website, and read the book "California License Law and Reference book", but I am still having trouble figuring what is and is not required for a Commercial Contract, like Mechanics Lien warnings, or disclosures about insurance.

Anybody who's done Commercial work in California care to help out? Griz??
When you say 'commercial account' I am assuming that you are not talking about new construction. For commercial accounts the only thing that does not apply on a contract is the 3 Day Notice To Cancel. Everything regarding the maximum down payment, etc. would be the same.

Any time you are the sub contractor for a commercial account and for new construction you have to give the 21-Day Preliminary Notice and send it to the reputed owner. Then, if the person you signed the contract with is not the real owner and the real owner did not know about the job the real owner is still liable to pay the bill.

The only other thing I know that is different with commercial work is the time period for the guarantee you give on your service and products is less. With work for homeowners the license board sets some minimum time periods for different types of work.

The Mechanics Lien warning, worker's comp, and liability insurance notices are still required on the contract. The 21-Day Preliminary Notice cannot be incorporated into the contract.

You still need to put the starting and completion dates on the face of the contract. In California, the starting and completion dates have to be within 21 days of the date you write that you will start. Put another way; you can legally start a job 21 days after the date your contract states you will start. I put a clause in my contract that spells this out and I stick it in the customer's face when they get mad because we start or finish a day late.
 

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I'm a Mac
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Californiadecks said:
Why would there be additional qualifications needed? Regardless of how much the contract is for, you still need to have four years of experience in the trade your licensed for. The free market determines who can or can't handle the larger projects.
The point was your license covers any job, a guy who only does small jobs is not necessarily qualified or experienced enough to contract for a high rise, but his license allows him to do both.
 

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Goin' Down in Flames....
Highwayman
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Discussion Starter · #6 ·
Yes, I'm talking about remodel/repair work in commercial.

I don't think you're limited to a $1,000 or 10% down payment in commercial. I could be wrong, that's why I'm researching it. But I've personally seen larger down payments in commercial.

I wish there was more information about this from the CSLB. It'll probably end up costing me a phone call to my attorney. :mad:
 

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All those pages of mandatory lien language, and $1000 maximum down, and payment schedules, and no T&M, etc., etc.?

Generally, no, none of that applies to anything that's not a "Home Improvement Contract" (basically any remodeling contract with the owner, bleeding over into repair contracts, and just a little to new single-family homes.) It's covered very well in the CSLB's book: "California Contractors License Law and Reference Book". Those provisions are for consumer protection.

For everything else - non-residential commercial work, subcontractors' agreements with generals (including when the general is operating on a "Home Improvement Contract"), contracts with insurance companies (not the owner) - none of it applies. No maximum down, no 3-day cancellation, no restrictions whatever on payment schedules, T&M is fine. Structure it however you and the client can agree.

And, 20 day lien notices aren't mandatory. You won't be able to collect on a lien or make other claims if you don't do it, but the notice isn't mandatory.

By the way, if your contract is with a big commercial owner of an apartment building, it may still be a "Home Improvement Contract", and all the provisions matter.

Edit: The CSLB book has some good stuff, including a chapter about defects, warranties, mediation, offers to repair, etc. It's readable, and useful.
 

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Goin' Down in Flames....
Highwayman
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Discussion Starter · #8 ·
I left in 2009, but as I recall CSLB rules were more geared towards homeowner protection, commercial did not require all the notices. Hell you could be a B licensed contractor who does small jobs only for Mrs Smith and if someone is dumb enough to give you a 10 million dollar contract it was yours and no additional qualifications required.
I always did think that was a litte funny. I've heard about other states that have a residential and light commercial license, and then a separate commercial building contractors license. Makes more sense to me.

However, the guy with a B license, doing $1,000 handyman jobs, is NEVER going to get his mitts on a $10M commercial job. Just the bonding and insurance requirements would keep him out of it. Besides, the archy would disqualify him.
 

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CarpenterSFO said:
All those pages of mandatory lien language, and $1000 maximum down, and payment schedules, and no T&M, etc., etc.? Generally, no, none of that applies to anything that's not a "Home Improvement Contract" (basically any remodeling contract with the owner, bleeding over into repair contracts, and just a little to new single-family homes.) It's covered very well in the CSLB's book: "California Contractors License Law and Reference Book". Those provisions are for consumer protection. For everything else - non-residential commercial work, subcontractors' agreements with generals (including when the general is operating on a "Home Improvement Contract"), contracts with insurance companies (not the owner) - none of it applies. No maximum down, no 3-day cancellation, no restrictions whatever on payment schedules, T&M is fine. Structure it however you and the client can agree. And, 20 day lien notices aren't mandatory. You won't be able to collect on a lien or make other claims if you don't do it, but the notice isn't mandatory. By the way, if your contract is with a big commercial owner of an apartment building, it may still be a "Home Improvement Contract", and all the provisions matter. Edit: The CSLB book has some good stuff, including a chapter about defects, warranties, mediation, offers to repair, etc. It's readable, and useful.
All apartments and HOA's are considered commercial in the state of California. Because they're a business.
 

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The 10% or $1,000 still applies to commercial work. .....
Maybe we could follow up in a different thread over in the licensing forum, but I disagree with much of that post.

pcp - if you want to PM some references to the relevant sections of the B&P code I'll look at them with an open mind. I've been wrong before.

- Bob
 

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Goin' Down in Flames....
Highwayman
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Discussion Starter · #12 ·
PCPlumber, is most of your work as a sub, or are doing a lot of prime contracts?
 

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100% Prime Contracts

PCPlumber, is most of your work as a sub, or are doing a lot of prime contracts?
95% residential as a prime contractor and I sub out a lot of work to other contractors, 5% as a prime contractor for manufacturing facilities, public sewers, water mains, electric, etc.

I called the contractor's board this morning and I was wrong. The first time, though! the contractor's board said they do not regulate the down payment for commercial work.
 
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