A CONTRACTOR'S LICENSE?
AB 2237 went into effect January 1, 2013. TheAssembly Bill received very little notice but may have a significant impact on association managers. The Bill was in response to a court decision that consultants who oversee contracts between project owners and contractors were not required to be licensed. The Bill negated the court's decision by requiring consultants be licensed as contractors. Because of the way it defines “consultant,” HOA managers could find themselves in violation of the statute.
Size of the Project. First, any project that costs more than $500 in combined labor and material costs requires that the work be done by a licensed contractor. (Bus. & Prof. Code §7048.)
Consultant Defined. Second, a contractor is defined to include anyone who oversees bids for a construction project, arranges for subcontractor work and schedules and/or has oversight of a construction project. (Bus. & Prof. Code §7026.1.) Since most associations have their management companies solicit bids and oversee common area maintenance projects and since most projects costs over $500, management companies and their managers appear to be at risk for criminal and civil penalties.
RECOMMENDATION: The safest position for managers and management companies is to not oversee construction projects for their associations. Clearly, that should be the case for large projects–such work should be done by licensed construction managers. The small ones are the problem. Managers routinely handle them for their boards. Boards and management companies should talk to legal counsel about how best to address this issue.