Bill Text: CA AB1793 | 2015-2016 | Regular Session | Chaptered

California Assembly Bill 1793 (Prior Session Legislation)

Bill Title: Contractors: license requirements: recovery actions.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-08-30 - Chaptered by Secretary of State - Chapter 244, Statutes of 2016. [AB1793 Detail]

Download: California-2015-AB1793-Chaptered.html

BILL NUMBER: AB 1793	CHAPTERED
	BILL TEXT

	CHAPTER  244
	FILED WITH SECRETARY OF STATE  AUGUST 30, 2016
	APPROVED BY GOVERNOR  AUGUST 30, 2016
	PASSED THE SENATE  AUGUST 11, 2016
	PASSED THE ASSEMBLY  AUGUST 15, 2016
	AMENDED IN SENATE  AUGUST 2, 2016
	AMENDED IN ASSEMBLY  MAY 4, 2016
	AMENDED IN ASSEMBLY  APRIL 18, 2016

INTRODUCED BY   Assembly Member Holden

                        FEBRUARY 4, 2016

   An act to amend Section 7031 of the Business and Professions Code,
relating to contractors.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1793, Holden.  Contractors: license requirements: recovery
actions.
   Existing law, the Contractors' State License Law, creates the
Contractors' State License Board within the Department of Consumer
Affairs and provides for the licensure and regulation of contractors.
Existing law authorizes a person who utilizes an unlicensed
contractor to bring an action in any court of competent jurisdiction
in this state for recovery of compensation paid to the unlicensed
contractor for performance of any act or contract. Existing law
authorizes a court to determine that a contractor has substantially
complied with licensure requirements if specified conditions are met,
including that the contractor did not know or should not reasonably
have known, that he or she was not duly licensed when the performance
under the contract occurred. Existing law also requires a contractor
to demonstrate that he or she acted promptly and in good faith to
reinstate his or her license upon learning it was invalid in order to
meet substantial compliance of these licensure requirements.
   This bill would revise certain of the criteria for a court to find
that a contractor is in substantial compliance with the licensure
requirements, including removing the condition that the contractor
did not know or should not have reasonably have known, that he or she
was unlicensed during performance of the contract.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 7031 of the Business and Professions Code is
amended to read:
   7031.  (a) Except as provided in subdivision (e), no person
engaged in the business or acting in the capacity of a contractor,
may bring or maintain any action, or recover in law or equity in any
action, in any court of this state for the collection of compensation
for the performance of any act or contract where a license is
required by this chapter without alleging that he or she was a duly
licensed contractor at all times during the performance of that act
or contract regardless of the merits of the cause of action brought
by the person, except that this prohibition shall not apply to
contractors who are each individually licensed under this chapter but
who fail to comply with Section 7029.
   (b) Except as provided in subdivision (e), a person who utilizes
the services of an unlicensed contractor may bring an action in any
court of competent jurisdiction in this state to recover all
compensation paid to the unlicensed contractor for performance of any
act or contract.
   (c) A security interest taken to secure any payment for the
performance of any act or contract for which a license is required by
this chapter is unenforceable if the person performing the act or
contract was not a duly licensed contractor at all times during the
performance of the act or contract.
   (d) If licensure or proper licensure is controverted, then proof
of licensure pursuant to this section shall be made by production of
a verified certificate of licensure from the Contractors' State
License Board which establishes that the individual or entity
bringing the action was duly licensed in the proper classification of
contractors at all times during the performance of any act or
contract covered by the action. Nothing in this subdivision shall
require any person or entity controverting licensure or proper
licensure to produce a verified certificate. When licensure or proper
licensure is controverted, the burden of proof to establish
licensure or proper licensure shall be on the licensee.
   (e) The judicial doctrine of substantial compliance shall not
apply under this section where the person who engaged in the business
or acted in the capacity of a contractor has never been a duly
licensed contractor in this state. However, notwithstanding
subdivision (b) of Section 143, the court may determine that there
has been substantial compliance with licensure requirements under
this section if it is shown at an evidentiary hearing that the person
who engaged in the business or acted in the capacity of a contractor
(1) had been duly licensed as a contractor in this state prior to
the performance of the act or contract, (2) acted reasonably and in
good faith to maintain proper licensure, and (3) acted promptly and
in good faith to remedy the failure to comply with the licensure
requirements upon learning of the failure.
   (f) The exceptions to the prohibition against the application of
the judicial doctrine of substantial compliance found in subdivision
(e) shall apply to all contracts entered into on or after January 1,
1992, and to all actions or arbitrations arising therefrom, except
that the amendments to subdivisions (e) and (f) enacted during the
1994 portion of the 1993-94 Regular Session of the Legislature shall
not apply to either of the following:
   (1) Any legal action or arbitration commenced prior to January 1,
1995, regardless of the date on which the parties entered into the
contract.
   (2) Any legal action or arbitration commenced on or after January
1, 1995, if the legal action or arbitration was commenced prior to
January 1, 1995, and was subsequently dismissed.