What to Do If Your Contractor Is Unlicensed in California
If you discover that a contractor working on your property is not licensed by the CSLB, you have specific legal protections under California law. You also have steps you should take immediately.
Why It Matters
California Business and Professions Code Section 7031 states that an unlicensed contractor cannot enforce a contract for payment. In plain terms: if a contractor performs work without a valid license, they cannot legally sue you to collect payment. Further, you may be able to recover money already paid to an unlicensed contractor.
This law exists specifically to protect consumers and to incentivize contractors to maintain proper licensing. It is one of the strongest consumer protection provisions in California construction law.
Verify a Contractor's License Now
Immediate Steps
If you suspect your contractor is unlicensed, do the following:
- Verify the license. Search by the contractor's business name or the license number they provided. Some contractors are licensed under a different legal name than their trade name. Try multiple searches before concluding they are unlicensed.
- Stop additional work. Do not authorize additional work or make further payments until you have confirmed the license status. Document the current state of the project with photos.
- Gather documentation. Collect your contract, any change orders, receipts, cancelled checks, and text or email communications. You will need these if you file a complaint or pursue legal action.
- File a complaint with the CSLB. The CSLB investigates complaints about unlicensed contracting activity. You can file online at cslb.ca.gov. The CSLB can issue stop-work orders and refer cases for criminal prosecution.
How Unlicensed Contractors Operate
Common patterns include using a different person's license number, claiming to be "exempt" from licensing requirements, offering cash-only deals to avoid paperwork, or operating under a frequently changing business name. Some unlicensed operators also advertise on platforms that do not verify licensing.
The $500 threshold is important. California law exempts projects under $500 in combined labor and materials from the licensing requirement. Some unlicensed contractors exploit this by structuring large jobs as a series of small payments, each under $500. This is not legal if the total project exceeds $500.
How to Avoid Unlicensed Contractors
The simplest protection is to verify every contractor before signing anything. Search our directory by city or classification to find licensed contractors in your area, then cross-reference against the CSLB directly.
Be cautious of contractors who are reluctant to provide a license number, offer prices significantly below competitors, request full payment upfront, or refuse to sign a written contract. Licensed contractors are accustomed to providing this information and will not resist a verification request.
Penalties for Unlicensed Contracting
Operating as an unlicensed contractor in California is a misdemeanor. Penalties include fines up to $15,000 and up to six months in county jail for a first offense. Second offenses carry higher fines and mandatory jail time. The CSLB runs regular sting operations to catch unlicensed operators.