Legal Alerts

California Contractors – You Should Know That Section 7141.5 May Be Your Golden Ticket

California (January 22, 2020) - Under California’s Contractors’ State License Law, Cal. Bus. & Prof. Code §§ 7000 et seq., all contractors’ and subcontractors’ licenses expire two years from the last day of the month in which the license issued, or two years from the date on which the renewed license last expired. The Contractors State License Board (CSLB) sends licensees a renewal application 60 to 90 days prior to the date the license is set to expire.

Most contractors have various controls in place to make sure that the renewal application is timely filed and the required fee paid. Even so, we are only human and mistakes are made, and a renewal application filing deadline can be missed for a variety of reasons, e.g., the licensee’s mailing address has not been updated on the CSLB’s records, the individual responsible for filing the license renewal is out on leave, there has been a death in the family or a serious health issue, etc. Quoting Robert Burns, even “[t]he best-laid schemes of mice and men go oft awry” (To a Mouse, 1786).

General contractors should be cognizant of both their and their subcontractors’ license renewal obligations and deadlines.

If a licensee missed timely filing its renewal application, Business & Professions Code Section 7141.5may provide some relief. Section 7141.5 provides that the Registrar of Contractors,

“may grant the retroactive renewal of a license if the licensee requests the retroactive renewal in a petition to the registrar, files an application for renewal on a form prescribed by the registrar, and pays the appropriate renewal fee and delinquency fee prescribed by this chapter. This section shall only apply for a period not to exceed 90 days from the due date and only upon a showing by the contractor that the failure to renew was due to circumstances beyond the control of the licensee.”

The good news is that, at its recent Executive, Licensing, and Legislative Committee Meetings, the CSLB discussed possible amendments to Section 7141.5 to both reduce the burden on the CSLB and to provide contractors with some relief from the burden currently extant in Section 7141.5. The CSLB reasoned that,

“The law should be changed to simply allow a retroactive renewal, if an acceptable renewal is received within 90 days of the license expiration date, without forcing staff to conduct a case-by-case analysis of why the renewal is late. The Medical Board of California has a similar provision (Business and Professions Code section 2424). This change would also mirror the provisions for retroactive acceptance of other license maintenance documents, such as workers’ compensation and license bonds, that already exist in the law.”

The CSLB will propose that Section 7141.5 be amended to read,

“The registrar shall grant the retroactive renewal of a license if the licensee pays the appropriate renewal fee and delinquency fee prescribed by this chapter and an acceptable renewal is received with a postmark date within 90 days of the expiration of the license.”

On September 19, 2019, the CSLB Board of Directors gave staff approval to seek an author for the bill and it is expected to be introduced on February 21, 2020. Stakeholders will have an opportunity to comment on the proposed revisions and to otherwise voice their support for the bill by submitting comments. This could include supporting that any amendments to Section 7141.5 be retroactive. More to come once the bill is introduced and has progressed through the legislative process.

For more information, contact the author of this alert, or visit our Construction Practice Page to find an attorney in your area.

Authors:

Amy L. Pierce, Partner

Mark A. Oertel, Partner

John Lubitz, Partner

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