Legal Question in Construction Law in California

Re: Unlicensed Contractor ran a Tab?!!!

An unlicensed contractor who does home improvements for a homeowner has virtually no legal rights against the homeowner. For example, the unlicensed contractor cannot enforce a mechanic's lien in his own name. However, anyone furnishing materials or rental equipment used on the job could file and enforce a lien if left unpaid. This is probably your greatest risk here. If you know the source of the high-value materials used on the job, you might make discreet inquiry to see if they have been paid.

My guess is this individual will not bother to file a lien, knowing it couldn't be enforced.

Further, looks like the statute of limitations would bar any suit for the 2000 job.

One way to handle this is to pay whatever YOU think is the fair value balance, and upon giving him the pay-off check, insist on a "paid if full" receipt. The other way is to call his bluff and pay nothing. There is a slight risk in this latter course, because you might have to defend, but the chances of winning are excellent, and more likely than not he will drop the matter without filing anything.

Tell him his unlicensed activities are misdemeanors under the Business and Professions Code, section 7028(a).

Re: Unlicensed Contractor ran a Tab?!!!

Let me add to Mr. Whipple�s comments

The person trying to shake you down has some serious problems. First, there is no such thing as a �licensed handyman.� That �classification� simply does not exist among the various specialty contractor classifications established by the Contractor�s State License Board.

Since each separate �contract� involved sums in excess of $500.00, your man has to be licensed or face the various consequences of contracting without a license, such as 1) misdemeanor charges as mentioned by Mr. Whipple, 2) no right to seek payment through court or arbitration, and 3) the possibility that you could sue and recover every cent already paid.

In 2001 the legislature amended Business & Professions Code Sec 7031, which still precludes access to court for unlicensed contractors. Now, that statute includes a provision that reads. � A person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract. � (B&P Sec 7031(b)) Personally, I think that�s an extremely harsh rule, especially if the unlicensed person has done a good job. Still that is an option you have.

As to mechanics liens, your handyman has no lien rights as Mr. Whipple pointed out. Further, the statutes provide that any lien he tries to assert now is too late if not recorded within 90 days of the date the work was completed. Likewise, any liens his suppliers might try to record are also likely time barred under a similar statute.

Finally, the 2 year statute of limitations on the 2000 oral contract has most likely run by now. Although its not run on the 2002 work yet, with everything else you have going in your defense, that�s not much of a problem.

I suspect Mr. Whipple is right � he�s merely threatening, with no real intent to pursue his �claim� if you stand firm. Tell him that you�ve contacted counsel and know 1) his claim that he's a "licensed" handyman is untrue, 2) any mechanics lien he might try and record is invalid based on non-licensure and passage of time, 3) any home improvement contract had to be in writing (B&P Code Sec 7159), and 4) that if push comes to shove, the law would allow you to sue him and recover any moneys you paid him for doing work as an unlicensed contractor.

I�d be interested to hear how he responds if the returns with further demands. Best of luck and best regards,

Tom Newton

Now the inevitable caveat:

The foregoing information is provided as an accommodation only, and does not constitute specific legal advice or a biding legal opinion based on a comprehensive review of all relevant facts, nor can provision of such information be construed as creating an attorney-client relationship.

Re: Unlicensed Contractor ran a Tab?!!!

As an unlicensed contractor, the guy is almost certainly out of luck. You should take immediate action to protect yourself by reporting him to both the police and the contractors state license board. I'd be surprised if this doesn't get rid of him. The police are sometimes hesitant to take a report on unlicensed contractors, but you need this report so that it can be forwarded to the district attorney. Insist that the police take a report and ask that it be forwarded to the district attorney. If the police continue to resist, call your DA and ask which deputy DA is in charge of consumer protection. Talking to this deputy DA may get some results.

The "licensed handyman" is pure garbage. I wouldn't pay him one more cent. True, there is a chance that he will record a lien against your property, but the law allows you to do a quick procedure to get the lien off your property. You can get an award from the court of up to $1000 in attorney's fees to get a bogus lien removed, but it's tough these days for a lawyer to do it for this amount or less. Plus, it will likely be very hard to collect from the unlicensed contractor.

It is my experience that unlicensed contractors do everything in their power to avoid the courts, so the risk isn't that great that he'll try to foreclose on any lien he records.