Housing
Contractors: unlicensed work
SB 342 lets licensed contractors seek payment for work completed while licensed on certain large construction projects, even if they were unlicensed at other times.
The law narrows California’s all-or-nothing payment rule for specified public, commercial, institutional, multifamily, and common-interest-development projects. Project owners may recover only payments tied to periods when the contractor was unlicensed.
What the law does
- Allows contractors to seek compensation under covered contracts if licensed when the contract was signed and during the work for which payment is sought.
- Applies to public works, commercial and institutional projects, qualifying common-interest developments, and multifamily projects of four or more units when no tenant or resident is a contract party.
- Limits an owner’s recovery from an unlicensed contractor on covered projects to compensation paid for work performed while the contractor was unlicensed.
Who it affects
- Contractors working on covered construction projects.
- Public and private project owners that hire contractors for covered projects.
- Common-interest-development and multifamily project parties when tenants or residents are not parties to the contract.