WORKERS COMPENSATION INSURANCE: Contractors who do not have employees are not required to carry workers compensation insurance. The contractor must file a form with the state of California to certify that they do not have any employees. IMPORTANT NOTE: Any individual working for any company MUST be reported on that company’s payroll in order to be covered by the company’s workers compensation insurance. Any person being paid under the table is NOT covered by the policy. If that person were to get hurt while working on your property, YOU would be held completely liable and they could collect from your homeowners insurance policy. The legalities could become very time consuming and very expensive. You could even possibly lose your home if a law suit exceeded the limits of your homeowners policy.

LIABILITY INSURANCE: This is very important information and is not listed on the CSLB website. Contractors are not required by the state to carry liability insurance. You should never hire a contractor unless they have a liability policy in full force of at least a million dollars. In addition to workers compensation policies this protects you from damage and injuries as a result of the contractor’s actions or negligence. You should always ask for the contractor’s insurance agent to mail or fax a copy of the policies to verify that they are current and in full force. This will generally cost the contractor nothing or a minimal charge at most as this is done as a service to the contractor. Again, your homeowners policy would have to cover the losses due to the actions of the contractor.

HIRING A HANDYMAN: There are many handyman companies that perform home repairs and remodeling services that are completely licensed by the Contractors State License Board. California Contractor’s Law states: An unlicensed individual may NOT perform any work that totals more than $500.00 including both labor and materials at any single address within a twelve (12) month period. Trying to break up larger projects into smaller invoice amounts does not get the individual around this law. Also, the advice concerning liability and workers compensation insurances remains true in this situation. It is still your property and you are still the responsible party. The money you save by hiring an unlicensed person with no insurance could end up costing you a lot more in the long run.

CONTRACTS: You can get a lot more information about contracts on the CSLB website. KEEP THIS IN MIND: If it is not in your contract, you may not get what you wanted. This means written in the contract. Verbal contracts can lead to big problems and are only good for up to $500.00. Writing everything in the contract from the paint color to the style of doors or the species of wood to be used for a cabinet ensures there is no misunderstanding halfway through the project . It will protect you and your contractor both and make sure you both get what you want from the deal. Even if the contractor is a personal friend or even a family member, get everything in writing.

The CSLB has a publication called "What You Should Know Before You Hire A Contractor". This has some very good details on what should be included in a home improvement contract. IMPORTANT NOTE: Under California Contractors Law, a contractor may not collect a down payment of more than 10% of the total contract amount or $1000.00 which ever is LESS. All additional payments should be in conjunction with the work progression and materials purchased. DO NOT let the payments exceed the work completed. There are an unlimited amount of stories of homeowners who were taken advantage of by unscrupulous contractors that were paid a large sum of money up front with a minimal amount of work completed if any at all. These deceptive people disappear with all the money and leave a bad taste in the mouth of the consumer.

CONCLUSION: There are many other parts to the legal aspects of home improvement (mechanics liens, lien notices, permits, inspections, owner/builder, etc.) This information is available with a little effort on your part. In addition to the www.cslb.ca.gov website, your local building department probably has information that can help educate you on the entire process. We added this page to our website to help inform consumers so they may make an informed decision and will be much easier to work with. We also realize that an informed consumer will want to work with only legitimate contractors ensuring that they get a quality job at a competitively fair price. A win-win situation for all those involved.

Thank you for taking the time to read this information. It is being provided as general education and is in no way meant to take the place of the official information from the CSLB or actual California State Contracting Laws. If you have a need for legal advice, please seek the advice of a practicing attorney. Premiere Handyman assumes no liability for anyone acting on the information contained anywhere within this website.