BILL NUMBER: AB 249 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 22, 2011
AMENDED IN ASSEMBLY APRIL 4, 2011
AMENDED IN ASSEMBLY MARCH 15, 2011
INTRODUCED BY Assembly Member Bill Berryhill
FEBRUARY 3, 2011
An act to amend Section 7031 of the Business and Professions Code,
relating to contractors.
LEGISLATIVE COUNSEL'S DIGEST
AB 249, as amended, Bill Berryhill. Contractors.
Existing law, the Contractors' State License Law, creates the
Contractors' State License Board within the Department of Consumer
Affairs and provides for the licensure and regulation of contractors.
Existing law prohibits a person, acting as a contractor, from
bringing an action to collect compensation for performance of any act
or contract requiring a license without alleging that he or she was
licensed at all times during the performance of the act or contract,
except as specified. Existing law authorizes a person who
utilizes an unlicensed contractor to bring an action in any court of
competent jurisdiction in this state for recovery of all compensation
paid to the unlicensed contractor for performance of any act or
contract.
This bill would limit the action for recovery of
compensation paid to authorize a person who utilizes
those services for the construction or improvement of
residential property, as specified , to recover 2 times the
amount of compensation paid for work performed during periods when
the contractor was not duly licensed . It would also authorize
a person who utilizes the services of a contractor for the
construction or improvement of property other than specified
residential property to bring an action in any court of competent
jurisdiction in this state to recover all compensation paid to the
contractor for performance of any act or contract during the time the
contractor was not properly licensed. The bill would authorize
a contractor who was duly licensed with respect to a portion of work
performed, as specified, to bring an action to recover compensation
for that portion of the work. The bill would state the
intent of the Legislature in this regard.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7031 of the Business and Professions Code is
amended to read:
7031. (a) Except as provided in subdivision (e)
subdivisions (e), (g), and (h) , no person
engaged in the business or acting in the capacity of a contractor may
bring or maintain any action, or recover in law or equity in any
action, in any court of this state for the collection of compensation
for the performance of any act or contract where a license is
required by this chapter without alleging that he or she was a duly
licensed contractor at all times during the performance of that act
or contract, regardless of the merits of the cause of action brought
by the person, except that this prohibition shall not apply to
contractors who are each individually licensed under this chapter but
who fail to comply with Section 7029.
(b) Except as provided in subdivision (e)
subdivisions (e), (g), and (h) :
(1) A person that utilizes the services of an unlicensed
contractor for the construction or improvement of residential
property consisting of one to four units may bring an action in any
court of competent jurisdiction in this state to recover all
two times the amount of any compensation paid
to the contractor for performance of any act or contract.
(2) A person that utilizes the services of a contractor for the
construction or improvement of property other than residential
property consisting of one to four units may bring an action in any
court of competent jurisdiction in this state to recover all
compensation paid to the contractor for performance of any act or
contract that occurred at anytime during which the contractor did not
possess a renewable license in accordance with this chapter, or
during which the contractor's license was under suspension or
expired.
(c) A security interest taken to secure any payment for the
performance of any act or contract for which a license is required by
this chapter is unenforceable if the person performing the act or
contract was not a duly licensed contractor at all times during the
performance of the act or contract.
(d) If licensure or proper licensure is controverted, then proof
of licensure pursuant to this section shall be made by production of
a verified certificate of licensure from the Contractors' State
License Board which establishes that the individual or entity
bringing the action was duly licensed in the proper classification of
contractors at all times during the performance of any act or
contract covered by the action. Nothing in this subdivision shall
require any person or entity controverting licensure or proper
licensure to produce a verified certificate. When licensure or proper
licensure is controverted, the burden of proof to establish
licensure or proper licensure shall be on the licensee.
(e) The judicial doctrine of substantial compliance shall not
apply under this section where the person who engaged in the business
or acted in the capacity of a contractor has never been a duly
licensed contractor in this state. However, notwithstanding
subdivision (b) of Section 143, the court may determine that there
has been substantial compliance with licensure requirements under
this section if it is shown at an evidentiary hearing that the person
who engaged in the business or acted in the capacity of a contractor
(1) had been duly licensed as a contractor in this state prior to
the performance of the act or contract, (2) acted reasonably and in
good faith to maintain proper licensure, (3) did not know or
reasonably should not have known that he or she was not duly licensed
when performance of the act or contract commenced, and (4) acted
promptly and in good faith to reinstate his or her license upon
learning it was invalid.
(f) The exceptions to the prohibition against the application of
the judicial doctrine of substantial compliance found in subdivision
(e) shall apply to all contracts entered into on or after January 1,
1992, and to all actions or arbitrations arising therefrom, except
that the amendments to subdivisions (e) and (f) enacted during the
1994 portion of the 1993-94 Regular Session of the Legislature shall
not apply to either of the following:
(1) Any legal action or arbitration commenced prior to January 1,
1995, regardless of the date on which the parties entered into the
contract.
(2) Any legal action or arbitration commenced on or after January
1, 1995, if the legal action or arbitration was commenced prior to
January 1, 1995, and was subsequently dismissed.
(g) If the contractor was duly licensed upon commencement of an
act or contract and reinstated a lapsed or suspended license prior to
completion of the act or contract, the contractor may bring or
maintain an action limited to recovery of compensation payable for
any portion of the work performed during periods when the contractor
was duly licensed. Any action authorized by subdivision (b) may seek
recovery of compensation previously paid to the contractor only for
that portion of the work performed during periods when the contractor
was not duly licensed.
(h) If the contractor was licensed during the performance of the
act or contract but contracted for or performed work outside of his
or her license classification, the contractor may bring or maintain
an action limited to recovery of compensation payable for that
portion of the work performed within the scope of work authorized by
his or her license classification. Any action authorized by
subdivision (b) may seek recovery of compensation previously paid to
the contractor for that portion of the work performed that is not
within the scope of work authorized by the contractor's license
classification.
SEC. 2. It is the intent of the Legislature that
amendments to Section 7031 of the Business sand Professions Code made
by this act shall affect only the rights of the parties to a
contract to bring a civil action under that section to recover
compensation paid or payable in connection with a work of
improvement. This act shall not be construed to limit or modify any
civil action authorized to be brought by the registrar of the
Contractors' State License Board or other law enforcement agency to
enforce any provision of the Contractors' State License Law.