More Feedback and Concern Over CSLB Licensing Laws For HOA’s

From Adams Kessler-Licensing Requirements have Association managers wondering about being licensed as a contractor. 
Contractor #1. Another great newsletter! I would appreciate a little more clarity on the contractor license law. As a manager it is our responsibility to check for valid license and certificates of insurance for vendors who perform work for our clients. Could the law be interpreted that we, managers, have to have a contractor's license just to request and keep COI's for everybody from the landscaper, pool vendor, fire alarm monitoring and occasional arborist or plumber, etc.? -Brad S.

RESPONSE: I hope it does not apply to vendors. Unfortunately, the revised statute broadly defines contractors to include “consultants” and historically the Contractors State License Board (CSLB) has broadly applied the licensing statute against those involved in any aspect of construction over $500. As the Supreme Court has already noted, the licensing law “imposes strict and harsh penalties for a contractor's failure to maintain proper licensure.” (MW Erectors, Inc. v. Niederhauser Ornamental Metal Works (2005) 36 Cal.4th 412, 418.) Unless the law is modified, management companies have potential exposure.

Contractor #2. David Fogt at the CSLB says that they consider HOA managers to be employed by the owners and exempt from the statute. -Glen G.

RESPONSE: I already dealt with employees being exempt. Did Mr. Fogt offer an opinion about third party management companies that are paid to oversee bidding and construction? Did he offer assurances that the courts would follow his opinion? No disrespect to Mr. Fogt but the court did not agree with the CSLB in the Fifth Day v. Bolotin case. I don't think anyone can say with certainty what the courts will do with the revised law.

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