Contractor License legit?

11 Replies

While checking out a roofer to do some roof maintenance on a flat tar and gravel roof, I discovered that the license number that he Gave me belongs to a roofer in Los Angeles instead of San Francisco where we are located. This roofer in San Francisco said the license is his partners although these guys do not seem to work under any corporate entity.

Should I be concerned about this?

Can 2 self employed partners work under one license?

Both of them appear to be under the radar of review sites like Yelp. I have also asked for references but he has not been forthcoming except to say that he can show me a lot of contracts whose value is much more than the small job he is quoting me.

As I write this, I think I should pass on this guy.

What do you all think?

My gut tells me that he is paying a licensed contractor (partner) to be able to use the license to pull permits. It happens all the time and it's illegal. Having said that, many general contractors and developers use guys just like this successfully for many years. IF you do use him, one important thing is to make sure that all of the proper insurances are in place (I.e. Workers comp and CGL). I don't know if your place is a condo but many policies have condo exclusions, look out for that. 

If you are getting a reasonable but realistic price from this guy it might make sense for you to proceed.

Tread carefully and best of luck!

You can also search the license to see if the local guy is under the list of personnel. Go to the Cslb website,  search for the license number and see if his name is on the personnel list. The situation may not be as dramatic as I described earlier 

@George Nyquist

Thank you for your advice.

The personnel list only shows the sole owner, so it sounds like this SF guy could be illegally paying to use someone else’s license as you suggested was a possibility.

You also said that “IF you do use him, one important thing is to make sure that all of the proper insurances are in place (I.e. Workers comp and CGL).”…..That also implies that I should getting proof of proper insurance from the SF guy, not the LA guy that is renting out his license, correct?

Since we are just mom and pop operators, seems like the safer route to go would be to get a more legitimate roofer that is prepared to get his own license rather than rent someone else’s.

By the way, why wouldn’t someone just get their own license? Is it a cost and/or education issue? 

Why do the GC's accept the scenario above? Is it because they get better pricing when they do?

It sounds like you will go the route of finding a different roofer. My comments below are for discussion's sake. Roofer recommendation at the bottom of this reply.

You would need the LA guy's insurance info as the permit (assuming the roofer gets one)  would be under his license.  This would include being named as "additionally insured" on his policy.  No matter what company you go with, you want their proof of workers comp as well as an additional insured certificate  naming you as an individual and your business entity.

"By the way, why wouldn’t someone just get their own license? Is it a cost and/or education issue?"

Usually both 

"Why do the GC's accept the scenario above? Is it because they get better pricing when they do?"

That's the general idea.  Sometimes the GC has known a particular worker that has done good work for sometime and requires them to get someone else's license on the hook for the work they perform. This is also commonplace.

Finding a good roofer that is competitively priced can be a challenge. I have had the longest run of success with Leo's roofing. Give Jose and Jaime a call.

DM me for phone number

@David S. You have a valid and great questions. I’ll name top 5 reasons why people can’t simply take a license number and use it. 1. They don’t have a paper authority to use my license, or pull permits for me. 2. They don’t have the authority to sign contracts. 3. They can’t send invoices with my letterhead on it. 4. They could not collect monies or cash checks under my company name. 5. They can’t issue lien waivers. So without those first 5 reasons, any investor in their right mind would ask for W9, ask for ACORD paper with them as additionally insurer AND verify it, will have the roofing company pull the permit, will not pay cash, will get an authorization from the company for them to sign the contract if they are not listed on the CSLB site (and even if they do, they need to certify that they can sign contracts), get an official invoice with company letterhead before paying it.

@Manolo D.

Thanks for your input!....Is ACORD paper some form of insurance documentation?

Are you suggesting that we should always ask to be added as an additional insured? 
Would this be somewhat of a hassle for contractors? and is there some sort of $$ threshold where we, the investor, would not have to ask to be added as an additional insured, say $5,000?

Practically speaking, shouldn't making a decision to hire a contractor based on what is on the CSLB website, references and social media review sites be enough?

By the way, in your number 5 above, since they cannot issue lien waivers, does this also mean that they cannot register liens?

Your contract needs to be with the entity that is licensed, if you want to use a licensed contractor.

Originally posted by @David S. :

@Manolo D.

Thanks for your input!....Is ACORD paper some form of insurance documentation?

Are you suggesting that we should always ask to be added as an additional insured? 
Would this be somewhat of a hassle for contractors? and is there some sort of $$ threshold where we, the investor, would not have to ask to be added as an additional insured, say $5,000?

Practically speaking, shouldn't making a decision to hire a contractor based on what is on the CSLB website, references and social media review sites be enough?

By the way, in your number 5 above, since they cannot issue lien waivers, does this also mean that they cannot register liens?

ACORD is the standard document where a contractor will cover their work and whatever occurs there as far as they are concerned (not including theft or vandalism, not anything that the contractor has to do with). In order for a contractor to have an active coverage of their client, contractor needs to have a signed contract with client AND name them as additional insured IF they have a blanket waiver of subrogation, if they have a blanket, then all waivers are free of charge; if they do not have a blanket waiver, then it should cost around 50-150/additional insured. The threshold you are talking about should be the least of your worries and is something you can't afford not to have; do you want to gamble $150 vs $2,500 of potential disaster? i.e. a painter spills a bucket of paint on your new wood floor that seeps in between? Or a cabinet installer drops and damages your $2,000 newly installed kitchen granite?

Your question about integrity and workmanship is a whole new world when it comes to liability and legality. I can comment on what you need to do for you to be compliant and take all the advantages when things hit the fan - court, liability, lien, or simply legality wise -, but hiring based on workmanship and review based is not something I could tell. Doing things right will open doors for you towards court, insurance companies, irs, etc. On the commercial side, we assume all contractors are equally capable, regardless of their references and "reviews", we have all the specifications and air tight contract that can make them pay whatever the next contractor charges if they screw up.

Anyone can file liens. However if that were me, if the lien document lands on my inbox, I will reply to the entity that Mr Illegal is not an authorized individual -- note: it is up to ME.

@Manolo D. Thanks again.

I especially like these words..."we have all the specifications and air tight contract that can make them pay whatever the next contractor charges if they screw up."

Are you willing to share one of your standard "air tight" contracts?

@David S. Sure, no residential contractor will agree to it but email me and i will send you those 200 pages. If you want a more comprehensive, I could send you that too.

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