Legal Question in Construction Law in California

There is no mention of disgorgement of funds in Business and Professions Code section 7031 nor in the preceding or following sections dealing with unlicensed parties acting as contractors. Further, I don't read 7031 as allowing recovery of money already paid; it merely provides a defense to a suit to collect charges. Further, it might be a good idea to re-check on whether the contractor has a license or not; it could be that your information isn't correct.

This does not happen often, but I must respectfully disagree with Mr. Whipple, in part.

B&P 7031(b) does in fact allow for "disgorgement" of monies already paid to an unlicensed contractor, but the party who is seeking the recovery will likely need to file a lawsuit against the unlicensed contractor in order to recover. 7031 also allows the party who hired the unlicensed contractor to refuse to pay any monies the unlicensed contractor is seeking that have not already been paid, and acts as a defense to any lawsuit filed by the unlicensed contractor, as Mr. Whipple mentioned.

The Contractors State License Board (CSLB) takes unlicensed contractors very seriously, to the point that it is even a criminal matter, punishable by fines and/or imprisonment. There is also punishment that can be doled out by the CSLB as well as the Labor Board.

Whether 7031 applies to your situation will depend on what work was performed and the amount paid/requested, and whether a license was in fact required. Some work under a certain value can be performed by an unlicensed 'handyman' and, of course, individual employees of the contractor do not need separate licenses of their own. I agree that the license status should be re-checked. You can easily search that online using the contractor's license number (if any) or name: https://www2.cslb.ca.gov/OnlineServices/CheckLicenseII/CheckLicense.aspx A current but suspended license is the same as contracting without a license.

The problem with filing a lawsuit against an unlicensed contractor is the likelihood of being able to recover any money, even if you win.