California Business & Professions Code 7028 BP makes it a misdemeanor to contract without a valid contractor’s license. A first-time conviction is punishable by up to six months in jail and/or $5,000 in fines. And defendants are liable to their victims for any economic losses and restitution.
The full text of the statute reads as follows:
BP 7028 (a) Unless exempted from this chapter, it is a misdemeanor for a person to engage in the business of, or act in the capacity of, a contractor within this state under either of the following conditions:
(1) The person is not licensed in accordance with this chapter.
(2) The person performs acts covered by this chapter under a license that is under suspension for failure to pay a civil penalty or to comply with an order of correction, pursuant to Section 7090.1, or for failure to resolve all outstanding final liabilities, pursuant to Section 7145.5.(b) A first conviction for the offense described in this section is punishable by a fine not exceeding five thousand dollars ($5,000) or by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment.
(c) If a person has been previously convicted of the offense described in this section, unless the provisions of subdivision (d) are applicable, the court shall impose a fine of 20 percent of the contract price, or 20 percent of the aggregate payments made to, or at the direction of, the unlicensed person, or five thousand dollars ($5,000), whichever is greater, and, unless the sentence prescribed in subdivision (d) is imposed, the person shall be confined in a county jail for not less than 90 days, except in an unusual case where the interests of justice would be served by imposition of a lesser sentence or a fine. If the court imposes only a fine or a jail sentence of less than 90 days for second or subsequent convictions under this section, the court shall state the reasons for its sentencing choice on the record.
(d) A third or subsequent conviction for the offense described in this section is punishable by a fine of not less than five thousand dollars ($5,000) nor more than the greater amount of ten thousand dollars ($10,000) or 20 percent of the contract price, or 20 percent of the aggregate payments made to, or at the direction of, the unlicensed person, and by imprisonment in a county jail for not more than one year or less than 90 days. The penalty provided by this subdivision is cumulative to the penalties available under all other laws of this state.
(e) A person who violates this section is subject to the penalties prescribed in subdivision (d) if the person was named on a license that was previously revoked and, either in fact or under law, was held responsible for any act or omission resulting in the revocation.
(f) If the unlicensed person engaging in the business of or acting in the capacity of a contractor has agreed to furnish materials and labor on an hourly basis, “the contract price” for the purposes of this section means the aggregate sum of the cost of materials and labor furnished and the cost of completing the work to be performed.
(g) Notwithstanding any other law, an indictment for any violation of this section by an unlicensed person shall be found, or information or a complaint shall be filed, within four years from the date of the contract proposal, contract, completion, or abandonment of the work, whichever occurs last.
(h) For any conviction under this section, a person who utilized the services of the unlicensed person is a victim of crime and is eligible, pursuant to subdivision (f) of Section 1202.4 of the Penal Code, for restitution for economic losses, regardless of whether he or she had knowledge that the person was unlicensed.
(i) The changes made to this section by the act adding this subdivision are declaratory of existing law.
Legal Analysis
California Business & Professions Code 7028 BP makes it a misdemeanor crime to do contracting work if either:
- The contractor has no license from the Contractors State License Board; or,
- The contractor’s license is suspended for failure to comply with a correction order or to pay a civil penalty.1
The penalties for contracting without an active and valid license increase with each successive conviction:
| BP 7028 crime |
Misdemeanor Sentence in California |
| First-time offense (unless the contractor’s license was previously revoked) |
|
| Second-time offense (unless the contractor’s license was previously revoked) |
|
| Third-time or subsequent offense, or any offense if the contractor’s license was previously revoked. |
|
In addition, contractors may be ordered to pay victim restitution and economic damages.
Typical defenses to California charges of contracting without a license are that:
- The defendant was not technically a contractor;
- The work done was for less than $500 (“small work exemption”); and/or
- The defendant was an employee of a contracting company.3
7028 BP prohibits contracting without a license in California.
Legal References
- California Business & Professions Code 7028 BP – Engaging in business without license; Fine and punishment; Statute of limitations. See also Lasley v. Baldwin (Cal. App. 3d Dist. Apr. 17, 1958), 159 Cal. App. 2d 468, 324 P.2d 108.
- 7028 BP. See also Harrington v. Department of Real Estate (Cal. App. 5th Dist. June 21, 1989), 214 Cal. App. 3d 394, 263 Cal. Rptr. 528.
- 7028 BP. 7048 BP.