Legal Question in Construction Law in California

My answer remains unchanged. If he is a retired contractor he is not a contractor. It doesn't matter that they knew it. Also, the law is very clear that you cannot get around the $500 "handyman" cap by breaking the work up into smaller projects, and any small project over the $500 cap would be subject to forfeiture anyway. The payments went to you; they can sue you. You can probably get out of any CSLB issues about being a general contractor, but I'm not even 100% sure of that. I started in construction law in 1987 when there were all kinds of equitable exceptions to the contractor license requirements. Over the nearly 30 years since, the legislature has amended the law every time the courts carved out an exception to the point that it is now very clear that there is NO exception to the license requirements and yes, the owners can screw people who do work for them by having the work done and then refusing to pay and even suing for all their money back if they have paid anything. It is an absolute penalty on doing work without a license, and since you received the payments they can sue you for them back. This is a no exceptions, no nonsense area of the law. They are entitled to every penny they paid back and can sue both of you for it.