Bill > SB342

This bill modifies existing law regarding unlicensed contractors, primarily by differentiating between different types of construction work. For private construction work on residential properties with 25 units or less, the bill maintains the existing rule that a person cannot recover compensation if they were unlicensed at any point during the work. However, for all other construction work, including public works and commercial projects, the bill now states that an unlicensed contractor can only be prevented from recovering compensation for the specific periods they were unlicensed, provided they were licensed when the contract was signed and during the parts of the work for which they are seeking payment. If a license was suspended for administrative reasons like failing to renew on time, the amount a contractor cannot recover is limited to actual damages or $10,000 per day, whichever is greater. Additionally, for these other types of construction work, a security interest taken to secure payment is only unenforceable during the time the contractor was unlicensed, not for the entire contract. The bill also limits the ability of a client to recover *all* compensation paid to an unlicensed contractor, restricting it to only the portion paid for work performed while the contractor was unlicensed, and this provision now only applies to private residential construction of 25 units or less.

Budget and Finance, Business and Industry, Justice

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