Examining a contractor license

Examining a Contractor License

You’ve just confirmed that the contractor does have a license. Now, let’s take a closer look at some of the information the Contractor’s Board has provided and see what else we can dig up on him/her.

Here’s the real basic information that’s posted on the Board’s website for that contractor:

License Number

Confirm that it is the same number on any and all paperwork between you and the contractor. A very popular scam has been to ‘use’ someone else’s number for their business.  A couple of years ago, I found that a local painting contractor used my inactive license (a contractor should only have one active license at a time) on all his paperwork because he knew that most consumers don’t take the extra step and match things up.

Business Information

Basic contact information like name, address and phone but just like in the previous example, a cautious consumer will do a quick check to make sure the license number above matches the name in this section and all of that matches everything the contractor provides like business cards, advertising, proposals, contracts, etc. If something doesn’t match – STOP! Get the issue cleared up so you know who you’re doing business with.

Entity

This is the contractor’s business legal status. Everyone chooses a business form that works best for them so don’t read too much into it. But it could be important later to know just who (or what) you’ve contracted with should a problem come up.

Issue Date

True or False: Because license numbers are issued sequentially, the smaller the number, the longer the contractor has been in business. Answer – FALSE (maybe). Under California’s contractor laws, every entity must have a license. Using myself as an example, when I first qualified for a general contractor’s license back in 1981, I was assigned license number 404777 as a sole proprietor. When I decided to incorporate my company I was essentially forming a new entity and under the law, it had to have a new number issued – 975906. Same qualifying person; same experience, etc. Just a quirk of how the State does things. Quick Note: A qualifying licensee can only have one active license at a time so 404777 didn’t vanish – it’s listed as inactive and I can activate it at any time should I decide to inactivate the corporate license.

Expire Date and Current Status

Just like a Driver’s License, a contractor’s license must be renewed on a regular basis. This helps you make sure they’re up to date at that specific time and whether or not the license is active. Remember that unscrupulous painting contractor? Anybody who had checked the license number would have seen that its status was “Inactive” and warning bells should have gone off.

At first glance, everything seems to look pretty good. But let’s peel away another layer and see what we find.

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