Bill > SB342

This bill modifies California's contractor licensing laws by creating different rules for residential and non-residential construction work. For private residential construction of 25 units or less, the existing law remains largely unchanged, meaning contractors must be licensed throughout the entire project to recover compensation. For other types of construction work (including public works, commercial projects, and larger residential developments), the bill introduces more nuanced provisions. Specifically, contractors can now recover compensation only for the periods during which they were licensed, with a key exception for administrative license suspensions like failing to renew on time. In such cases, contractors can recover actual damages or $10,000 per day, whichever is greater. The bill also limits the unenforceability of security interests to only the periods when a contractor was unlicensed. Additionally, the bill maintains that if licensure is contested, the burden of proof remains on the contractor to demonstrate they were properly licensed. These changes aim to provide more flexibility for contractors while still maintaining licensing standards and protecting consumers from unlicensed work.

Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB342