Criminal Convictions and Contractor License Suspension in California

Building contractors in California risk having their license suspended or revoked if convicted of certain criminal offenses. A conviction will trigger contractor discipline if it is for a crime that is “substantially related” to the

• qualifications,
• functions, or
• duties of a contractor.

This typically includes crimes of fraud, theft, or violence.

Likewise, people applying for a contractors’ license may get rejected for having committed a crime within the last seven years, provided that the offense was substantially related to contracting. Further, the California Contractors State License Board (CSLB) may reject applicants for having committed either of the following offenses (even if more than seven years have passed):

• a serious offense (such as murder, rape, or grand theft),
• a sex offense that requires Tier II or Tier III sex offender registration, or
• a financial felony related to contracting.

Before the CSLB can take disciplinary action against a contractor, the convicted contractor is entitled to appear at an administrative hearing before an administrative law judge.

During the hearing, the judge considers some of the following factors when determining if discipline is appropriate:

• the specific California code section that the contractor violated,
• a clear description of the crime committed, and
• the contractor’s explanation of the offense.

A judge will normally recommend discipline if the Board can prove, by “clear and convincing” evidence, that the contractor is not fit to hold a contractor’s license. Note that this is a lower burden of proof than the “beyond a reasonable doubt” standard used in a California criminal trial.

If, after a hearing, the CSLB suspends or revokes a contractor’s license, he/she can file for reinstatement.

Our California criminal defense attorneys will highlight the following in this article:

• 1. Who regulates general contractors in California?
• 2. Can I acquire a California contractor’s license if I have a criminal record?
• 3. What about criminal convictions older than seven years?
• 4. Is a licensed contractor subject to discipline if convicted of a crime?
• 5. What disciplinary action can the CSLB take?
• 6. What is the WRIT process?
• 7. Can suspended contractors file for reinstatement of a contractor’s license?

1. Who regulates general contractors in California?

The Contractors State License Board (CSLB) regulates

• engineering contractors,
• general building contractors, and
• specialty contractors in California.

CSLB has a 15-member board, and an executive officer called the Registrar of Contractors.

Housed within the California Department of Consumer Affairs, CSLB has a mission to protect building and construction industry customers and homeowners from

• unscrupulous,
• irresponsible, and
• dangerous contractors.

The agency administers the Contractors’ State License Law and related administrative regulations.¹

CSLB licenses over 300,000 contractors in 43 classification categories such as concrete contractors, parking and highway improvement contractors, and contractors of swimming pools.

Under California Business & Professions Code 7028, contracting without a license is a misdemeanor crime.²

2. Can I acquire a California contractor’s license if I have a criminal record?

Maybe. The CSLB may generally grant licenses to applicants with a criminal conviction within the past seven years, as long as the offense is not substantially related to the qualifications, functions, or duties of being a contractor.³

An offense is “substantially related” to contracting if it implicates a contractor’s ability to perform contracting work in a safe and responsible manner.⁴

Examples of offenses that may lead to the denial of a license are:

• violations of the Contractors’ State License Law,
• crimes involving dishonesty, fraud, deceit, or theft,
• crimes involving physical violence against persons,
• crimes that indicate a substantial or repeated disregard for the health, safety, or welfare of the public,⁵ and
• violations of California Penal Code Section 396 (taking advantage of the public during emergencies like earthquakes or fires).⁶

If an applicant received a substantially related conviction within seven years from the date of applying for a license, the person may still receive a license if he/she can present evidence of rehabilitation.⁷

The Registrar will consider a number of factors in determining whether a contractor or applicant has been rehabilitated from his or her crime, including the time that has elapsed since the conviction.⁸

With regards to felony convictions occurring within seven years of an application, an applicant may be considered rehabilitated so long as there has not been any additional criminal activity.⁹

With regards to substantially related misdemeanor convictions, an applicant may be considered rehabilitated so long as there has not been any additional criminal activity within 3 years from:

• the time of release from incarceration, or
• completion of probation (if no incarceration was imposed).¹⁰

CSLB will also consider the following in determining whether or not an applicant has been rehabilitated

• the nature and severity of the crime,
• evidence of any subsequent crime,
• compliance with parole, probation, or restitution terms,
• consistent work history subsequent to release from incarceration or completion of probation,
• letters of reference,
• evidence of expungement proceedings,
• substance abuse counseling, and
• anger management counseling.¹¹

3. What about criminal convictions older than seven years?

The CSLB generally does not deny licenses to applicants with a conviction that is older than seven years. This is provided that the applicant successfully finished all the sentencing terms (such as paying fines or doing community service).

However, there are exceptions to this rule. The CSLB may still deny licenses to aspiring contractors if they have been convicted at any time for either of the following serious offenses:

• a crime that mandates Tier II or Tier III sex offender registration,
• a felony financial crime that is directly and adversely related to the fiduciary qualifications, functions, or duties of contracting, or
• a serious felony, as defined in Section 1192.7 of the California Penal Code.

Examples of serious felonies under PC 1192.7 include:

• murder,
• rape,
• kidnapping,
• mayhem,
• forced sodomy, and
• assault with a deadly weapon.¹²

4. Is a licensed contractor subject to discipline if convicted of a crime?

Under California’s contractor’s license laws, the CSLB may begin the disciplinary process against a licensed contractor if he/she is convicted of a crime.

This is true provided that the crime convicted of is “substantially related” to the qualifications, functions, or duties of a contractor.

The term “substantially related” has the same definition as set forth in Section 2 above.

“Convictions” include felony and misdemeanor convictions secured through:

• guilty pleas and verdicts,
• no contest pleas, and
• even expunged criminal records.

The Registrar can act with respect to a conviction when:

• the time for appeal has passed,
• the judgment of conviction has been affirmed on appeal, or
• an order granting probation is made suspending imposition of a sentence.¹³

Note that entering a guilty plea in pursuit of a deferred entry of judgment should not result in disciplinary proceedings or disqualification since the plea will be taken back as long as the defendant completes all the court orders. Expunged convictions also should not have any negative effects (in most cases).

5. What disciplinary action can the CSLB take?

If a licensed contractor is convicted of a crime that is substantially related to contracting, the result is usually either:

• license suspension, or
• license revocation.

But note that the convicted contractor is entitled to an administrative hearing before the CSLB can take any form of disciplinary action. The hearing is conducted before an administrative law judge (ALJ) and is held at the Office of Administrative Hearings (OAH).

Under California law, an OAH administrative hearing is like a mini court trial, with:

• opening and closing statements,
• the presentation of evidence, and
• witnesses.

During the hearing, the convicted contractor can present such evidence of:

• the specific crime convicted of,
• how the crime is not substantially related to contracting, and
• rehabilitation.

A skilled defense attorney can represent a contractor at the hearing and present evidence on his-her behalf.

In addition, the Board at the hearing can present evidence of:

• a substantial relation between the crime convicted of, and
• a lack of rehabilitation.

The CSLB generally must prove by “clear and convincing” evidence that the contractor is not fit to have his/her professional license.¹⁴ If successful, then the contractor must prove that he/she is fit to be a contractor.¹⁵

About a month after the hearing concludes, the ALJ will make a recommendation to the CSLB about the contractor’s license. This is called a “proposed decision.”¹⁶

The proposed decision is given to the Registrar and normally suggests:

• no disciplinary action, or
• some form of action, typically either license suspension or revocation.

The Registrar can either:

• adopt the decision,
• modify it, or
• enter a different decision.

Normally, the Registrar adopts the ALJ’s decision.

6. What is the WRIT process?

The WRIT process under California State law is the process by which a convicted contractor can appeal the proposed decision and ultimate decision of the Registrar.

The contractor can file a Writ Petition 30 days after the Registrar makes his/her ultimate decision. The petition begins the appeals process.

The appeal is heard by a California Superior Court, which reviews all of the evidence that was presented in the administrative hearing.

The Court will affirm the Registrar’s decision if it finds that it is more likely than not that the Registrar made a decision that was reasonable. Reasonableness is based upon the evidence presented at the hearing.

7. Can suspended contractors file for reinstatement of a contractor’s license?

Yes. A contractor can file for reinstatement if his/her license was suspended or revoked by the CSLB.¹⁷

If the Board restores the contractor’s license, the contractor must post a disciplinary bond/contractor bond of at least $15,000 before resuming as a contractor.¹⁸

The disciplinary bond is in addition to other bonds required by law.

For additional help…

If you are a contractor and are under investigation by the CSLB, we invite you to contact our criminal defense firm at the Shouse Law Group. Our attorneys provide both free consultations and legal advice you can trust.

Our lawyers also represent clients throughout California, including those in Los Angeles, San Diego, and Sacramento.

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