Are Contractors Required To Make Sure Other Contractors On Their Projects Are Properly Licensed? Posted on Nov 29, 2017
In California, every contractor is required to make sure that any contractor they enter into a contract with has an active, viable contractor's license. Licensed contractors can come under investigation if they work with unlicensed contractors. Although the rules make contracting with unlicensed contractors or aiding, abetting or conspiring with unlicensed contractors subject to disciplinary action, a penalty will only be assessed for “willingly and knowingly” entering into a contract with an unlicensed contractor. See Cal. Lab. Code Section 1021.5. Courts have held that general contractors are not required to call the California State License Board to confirm their subcontractor’s license status. Also, courts have held that properly licensed subcontractors can recover for their work (and file mechanics liens) despite the failure of the general contractor to be properly licensed. These exceptions are limited and should not be counted on. Contractors should remain vigilant to ensure that other contractors on their projects are properly licensed. If not, they jeopardize their own contractor's license and face a potentially time-consuming and expensive process of trying to prove that they did not "willingly and knowingly” contract with an unlicensed contractor.
