Building Your Project
Thinking of starting a construction project for your home or property?
The following sections provide helpful information regarding hiring contractors or acting as an owner-builder:
Hiring a Contractor
Are contractors required to be licensed, bonded, and carry worker’s compensation insurance?
Anyone who contracts for or bids on a construction project valued at $500.00 or more (total labor and materials) must be licensed by the State of California Contractor’s State License Board. Contractors are required by law to be bonded by the State of California and to have a business license from the city or county in which they are performing work. They are also required by law to provide workers’ compensation if they employ or otherwise engage any person to work.
How do I check if a contractor has an active and valid license through the State of California?
The California State License Board (CSLB) provides information about a contractor’s license, bond and workers’ compensation insurance status, as well as pending and prior legal actions. Free consumer publications and complaint forms are also available from the CSLB. Go to the CSLB website at www.cslb.ca.gov, call 1 (800) 321-CSLB (2752), or write to CSLB, P.O. Box 26000, Sacramento, CA 95826 for information.
Are there any guides or pamphlets for consumers regarding hiring contractors and home improvement projects?
Yes. Please visit the Contractor State License Board for guides and pamphlets regarding numerous topics, including but not limited: “Ten Tips for Making Sure Your Contractor Measures Up”, “What You Should Know Before You Hire a Contractor”, “Information For New Homeowners”, “Home Improvement Contracts”, “Preventing Mechanic’s Liens”.
If a building permit is required for my project, is it required that a licensed contractor obtain the permit?
A permit may be obtained by either a licensed contractor or the property owner, also known as an owner-builder permit. If the property owner is not performing any of their own work personally, the contractor typically obtains the permit. A frequent practice of unlicensed persons professing to be contractors is to have the property owner secure an “owner-builder” permit, erroneously implying that the property owner is providing his or her own labor and material personally. If the property owner will be performing all or a portion of the work and wishes to be their own general contractor, an owner-builder permit typically is obtained. Please visit our Owner-Builder Information page for additional details.
Where do I file a construction complaint?
All construction complaints should be filed through the State of California Contractor State License Board (CSLB) regardless whether the contractor is licensed or unlicensed.
Other Agency Resources
Tips for Hiring a Contractor
Tip#1 Hire only licensed contractors.
Tip#2 Check contractor’s license numbers at 1 (800) 321-2752.
Tip#3 Get three references, review past work.
Tip#4 Get at least three bids.
Tip#5 Get a written contract and don’t sign anything until you completely understand the terms.
Tip#6 Pay 10% down, or $1,000 whichever is less.
Tip#7 Don’t let payments get ahead of work. Keep records of payments.
Tip#8 Don’t make final payment until you’re satisfied with the job.
Tip#9 Don’t pay cash.
Tip#10 Keep a job file of all papers relating to your projects
What is an Owner-Builder?
An Owner-Builder is a property owner who acts as his or her own general contractor for a home remodeling project and obtains his or her own building permit. Typically property owners obtain owner-builder permits when they are providing all or a portion of their own labor and/or materials personally. An owner-builder assumes responsibility for the overall job which may include, but is not limited to, taxes, insurance, and other legal liabilities.
What are some of the Owner-Builders responsibilities?
The Contractors State License Board recommends that it’s best to hire a licensed contractor who is legally qualified to do the work. However, if you hire unlicensed people to perform the work, you may be considered an employer. This could make you responsible for:
- Registering with the State and Federal Government as an employer.
- Withholding State and Federal Income Taxes, Federal Social Security Taxes, paying Disability Insurance and making Employment Compensation contributions.
- Providing workers compensation insurance unless the work is done by members of your immediate family.
If you are an employer, you must register with the state and federal governments as an employer and be subject to the above responsibilities. There may be financial risks for you if you do not carry out these obligations and these risks are especially serious with respect to workers’ compensation insurance.
For more specific information about your obligations under federal law, contact the Internal Revenue Service at 1 (800) 829-1040 and the U.S. Small Business Administration at 1 (800) 359-1833.
For more specific information about your obligations under state law, contact the Employment Development Department at (916) 653-0707, the Department of Industrial Relations at (415) 703-5070, and the Franchise Tax Board at (800) 852-5711.
Owner Builders are also responsible for many items such as:
- Supervising the job, including scheduling workers and obtaining building permits and requesting inspections.
- If any of the construction doesn’t pass building inspections, the property owner is responsible for correcting the work and getting it re-inspected.
- Making sure all workers and material suppliers are paid, or face the possibility of mechanic’s liens.
Designers and Consultants vs. Licensed Contractors
Owner-Builders many times hire unlicensed “designers” or “consultants” instead of licensed contractors to “save money” on their project. Owner-builders should be aware that many times these designers or consultants are either a contractor who has had his or her contractor’s license suspended or revoked, is unqualified to be licensed, or doesn’t meet the minimum requirements to get a contractor’s license. The California State License Board recommends that unless the property owner is very experienced in construction, it is best to hire a legitimate, licensed expert. Please visit our Hiring a Contractor page for additional information regarding hiring licensed contractors.
How do I check if an architect, engineer, or contractor has an active and valid license through the State of California?
Please visit a link below to check licensing information for:
Architects: California Architects Board
Engineers: Professional Engineers/Professional Surveyors
Contractors: State of California Contractors State License Board
Where do I file a construction complaint?
All construction complaints should be filed through the State of California Contractors State License Board (CSLB) regardless whether the contractor is licensed or unlicensed.
Other Agency Resources
Better Business Bureau
CA Dept Consumer Affairs
California Franchise Tax Board
Department of Industrial Relations: Worker’s Compensation
Employment Development Department
Internal Revenue Service
State of California Contractors State License Board
U.S. Small Business Administration
Related Forms & Handouts
Contact the Building Division at (916) 625-5120.