SACRAMENTO, CA – A new law will also enhance the exemption limit for unlicensed contractors from $500 to $1000 for small construction or repair projects to be done in California. Starting on 1st of January 2025, the new law known as Assembly Bill 2622 (Carrillo, Chapter 240, Statutes of 2024) makes it permissible for an unlicensed person to work on a project valued at up to one thousand dollars, so long as the unlicensed person does not hire workers and the project does not require a building permit.
Under the updated law, individuals without a contractor’s license may undertake projects totaling up to $1, 000,000,000, provided they do not hire workers and the project does not require building permits. The 1, 000 cap is the total amount of the project, this includes the labor, materials and any other cost that may be incurred in the project. If the project is over $1, 000, if workers are involved or if permits are needed then only a licensed contractor can do it.
It is permissible for an unlicensed person to place ads for projects which are within the $1, 000 limit, but such person must state in the ad that he or she is not a licensed contractor. This provision is to enlighten the consumers on the various aspects of unlicensed handyperson services.
In order to protect consumers, the Contractors State License Board (CSLB) recommends that homeowners make down payments for any home improvement project should not be more than 10% of the contract sum and that payments should not be made in installments which exceed the value of the work done or the materials supplied.
Some things remain unchanged for the unlicensed contracting; if an unlicensed person bids over $1, 000, works on a project which requires a permit or has workers, the administrative fines range from $100 – $15, 000, legal consequences include six months imprisonment and other fines of $100 – $5, 000. Offenders shall be punished with increased fines of $5,000 or 20% of the contract price, whichever is higher, and a 90-day jail term as their second offense.
It is to provide flexibility for the smaller and easy tasks that do not need a licensed professional while at the same time ensuring that bigger and more difficult projects are left for the professional contractors who are licensed.
To get more information, please visit the Contractors State License Board’s website. (https://www.cslb.ca.gov/)
Source: https://www.cslb.ca.gov/Resources/PressReleases/2024/AB2622.FINAL.pdf
