The Contractors State License Board (CSLB) is tasked with protecting California consumers. By enforcing laws and regulations that maintain the health, safety, and overall general welfare of the construction industry, the board performs its mandate. The CSLB enforces these laws and regulations strictly. Those who violate the applicable licensing laws and/or regulations are subject to disciplinary action by the CSLB, which may take the form of a letter of admonishment, citation, or accusation. Below we discuss some of the important issues related to CSLB citations.
CSLB Discipline Procedures
The CSLB protects California consumers by licensing and regulating the state’s construction industry. The CSLB also investigates public complaints and takes disciplinary action against those who violate the Contractors State License Law (Bus. & Prof. Code, § 7000 et seq.). The CSLB will use the citation and arbitration procedures for violations that can be corrected for the benefit of the licensee’s customer. However, the CSLB will use the accusation procedure if the primary purpose is to impose discipline, such as license suspension or revocation.
When a licensee is faced with a complaint or dispute, it is recommended that the licensee acknowledge the existence of the problem (without admitting fault) and indicate a willingness to fix the issue, including an offer to repair if appropriate, in attempt to limit the potential discipline to a citation only. This is generally the best approach because the citation penalties are less severe, potentially allow for negotiation, and typically will not result in a license suspension or revocation. However, if the licensee is unable to limit the discipline to a citation, then the next level of potential discipline is an accusation filed by the CSLB to try and suspend or revoke the license.
CSLB Citations
When the Registrar of Contractors has probable cause to believe that a contractor has violated the Contractors State License Law, it may issue a citation to the contractor as an alternative to proceeding by accusation. Every citation comes with an order of abatement (orders prohibiting one or more acts) and a civil penalty between $200 – $15,000, in addition to the cost of the citation. The Registrar may issue a citation within 4 years after the patent act or omission forming the basis for the citation, or 10 years for latent acts or omissions concerning structural defects.
Here are some common reasons why the CSLB may issue a citation:
- Pursuant to Business and Professions Code section 7027.1, unless exempt, it is a misdemeanor in California for a person to advertise for construction work unless that person holds a valid contractors’ license. Citation Fee: $100 – $1,000.
- Pursuant to Business and Professions Code section 7028, unless exempt, it is a misdemeanor in California to act in the capacity of a contractor without a valid contractors’ license. Citation Fee: $200 – $5,000.
- Pursuant to Business and Professions Code section 7075, a licensee must have their license displayed in the licensee’s main office or chief place of business. Citation Fee: $100 – $500.
- Pursuant to Business and Professions Code section 7113, failure on the part of the licensee to complete any construction project or operation for the price stated in the contract for such construction project or operation or in any modification of such contract constitutes a cause for disciplinary action. Citation Fee: $200 – $5,000.
Citation For Unlicensed Individuals
Any unlicensed person who is caught contracting or operating in the capacity of a licensed contractor unless exempt, will be subject to a $5,000 fine and/or up to six months in jail, in addition to an administrative fine which ranges from $200 – $15,000. (Bus. & Prof. Code, § 7028.) If an unlicensed person illegally uses another person’s contractor’s license, the CSLB may refer the case to a District Attorney for criminal action and potential felony charges. The failure of an unlicensed person or entity to comply with a final citation is a misdemeanor. (Bus. & Prof. Code, § 7099.6.)
Appealing a CSLB Citation
If the CSLB issues a citation, the licensee has 15 business days to appeal the citation with the Registrar of Contractors pursuant to Business and Professions Code section 7099.3, unless exempt. Pursuant to Business and Professions Code section 7099.4, if within 15 business days from issuance of a citation by the Registrar, the licensee or applicant fails to notify the Registrar about its intent to contest the citation, it becomes a final order and will not be subject to review by any court. In certain circumstances, this time may be extended with the Registrar’s prior approval. If the licensee decides to timely appeal the citation, a hearing date will be set for the matter to be heard. After the hearing, the Registrar will issue a decision based on its findings. A licensee’s failure to comply with a CSLB issued citation can result in the immediate suspension or revocation of their license.
CSLB Referral to Arbitration
As an alternative to invoking the citation procedure for handling complaints against licensees, the Registrar of Contractors may, for possible violations of specified provisions, and with the concurrence of the licensee and the complainant, refer the matter to binding arbitration if the Registrar makes certain specified findings. (Bus. & Prof. Code, § 7085, subd. (a).) If a case goes to arbitration, the licensee may still be cited by the CSLB.
A complaint may be referred to arbitration by the CSLB if the dispute meets the specific criteria below:
- There is evidence that the complainant has suffered or is likely to suffer material damage ($15,000 – $50,000).
- If the registrar believes that the public interest would be better served by arbitration.
- The licensee does not have a history of repeated or similar violations.
- The licensee was in good standing at the time of the allegation.
- The licensee does not have any prior outstanding disciplinary actions filed against them.
- No members of either parties have agreed to private arbitration for the dispute.
However, if the complaint claims less than $15,000 in damages, the CSLB shall refer the matter to binding arbitration, subject to the above criteria being satisfied.
Consequences for Failing To Comply With a Citation
When issued a citation from the CSLB, a licensee has 15 business days to appeal. If the citation isn’t overturned, it becomes final. Once it becomes final, the licensee must comply with the terms of the citation. If the licensee doesn’t comply, its license will be immediately suspended or revoked. (Bus. & Prof. Code, § 7099.6.)
If a stay of suspension was ordered, the licensee must abide by certain terms and conditions to prevent the suspension from going into effect. The suspended licensee must also file a disciplinary bond to remain in business during this period. A license suspension or revocation will result if any of the agreement terms are violated.
If a license gets revoked by the CSLB, the licensee is unable to have it reinstated and must wait a minimum of 1 year to a maximum of 5 years from the date of revocation before the qualifying individual can apply for a new contractor’s license; the same goes for any personnel listed in the CSLB’s revoked license records and anyone who is found to have knowledge or participated in the acts or omissions which resulted in the revocation. (Bus. & Prof. Code, § 7102.)
When a previously revoked licensee applies for a new contractors’ license, the qualifying individual must post a disciplinary bond, in addition to the standard contractor’s license bond. Any licensee who has had their license revoked, suspended, or expired for 5 years or longer must, in addition to reapplying for an original contractor’s license, take both parts of the CSLB’s license examination (trade and law).
How Long will Discipline Be Listed on a Contractor’s License Profile?
Citations are disclosed on the CSLB’s website from the date of issuance and for five (5) years from the date of compliance. Accusations that result in suspension, stayed suspension, or stayed revocation of a contractor license are disclosed from the date the accusation is filed and for seven (7) years after the accusation has been settled, if no additional disciplinary actions have been filed against the licensee during the seven-year period. Revocations that are not stayed are disclosed indefinitely. For further information regarding accusations, please see our article on CSLB Accusations.