Can a Contractor in California Charge a Homeowner for Materials Stored in Their Warehouse on Behalf of the Homeowner? Posted on Jun 11, 2024
Yes, a contractor in California can bill a homeowner for materials even if the contractor stores the materials in their warehouse on behalf of the homeowner. According to California regulations, if the contract explicitly provides for the transfer of title to the materials prior to the time the materials are installed, and separately states the sale price of the materials exclusive of the charge for installation, the contractor is deemed to be the retailer of the materials. This implies that the contractor can bill the homeowner for these materials as they are considered sold to the homeowner upon transfer of title, regardless of where they are stored.
Furthermore, the regulation specifies that in the case of a time and material contract, if the contractor bills the customer an amount for "sales tax" computed upon the marked-up billing for materials, it is assumed that the contractor is the retailer of the materials. This supports the notion that the contractor can indeed bill for materials stored in their warehouse as long as the contractual terms are clear about the transfer of title and the separation of material costs from installation charges.
In summary, the ability of a contractor to bill a homeowner for materials stored in the contractor's warehouse hinges on the specific terms of the contract regarding the transfer of title and the itemization of material costs.
The relevant regulation provides a clear basis for such billing practices under specified conditions. More information can be found in 18 California Code of Regulations § 1521. Construction Contractors.
