The Business and Professions Code is a comprehensive law in California that governs business practices and the conduct of licensed professions. It ensures a smooth and legal flow of business deals to avoid fraudulent acts or illegal practices that can result in unlawful gain or avoidable financial losses. Section 7028 of the Business and Professions Code is specific to contracting with a valid contractor’s license. It makes it illegal to contract without a valid or current permit. Although this is a misdemeanor offense, the prosecutor can file felony charges under related laws, like the fraudulent use of a contractor’s license. Charges under this law mainly depend on the circumstances of a case and the defendant’s criminal history.
It helps to understand the severity of your charges and possible penalties if you are accused of contracting without a valid license in San Diego. We can help with that at the Law Offices of Anna R. Yum. Our attorneys can advise you on your rights and options and develop a solid defense against your charges. We can help you fight for a reasonable outcome for your case.
The Legal Definition of Contracting Without a License
A valid contractor’s license demonstrates legal authorization and professional competency to perform regulated construction work. Licenses are legally issued for public safety to ensure legal compliance with underlying laws and regulations. A licensed professional will likely maintain professional standards in their dealings with clients. Additionally, licenses demonstrate competency, which is critical in building trust with clients and consumers. Thus, licenses are essential in various professions. You need a valid license to offer specific services, including contracting jobs. Business & Professions Code 7028 makes it unlawful for a contractor to contract without a valid and current license. You can violate this law in different ways, including the following:
- Entering into a contract with a friend or neighbor to construct a structure or repair their home or garage without a contractor’s license
- Continuing to enter into contracts with unsuspecting clients and consumers even after your contractor’s license was suspended or revoked
- Creating a construction company and entering into contracts with homeowners and businesspeople without renewing your expired license or reinstating a suspended contractor’s license
This is generally a misdemeanor offense, punishable by six months in jail, or misdemeanor probation, and a fine of up to $5,000. However, the prosecutor can file felony charges against you if you have prior convictions for the same or similar offenses on your record.
Specifically, BP 7028 makes it unlawful for an individual to engage in a business or act in a contractor’s capacity within California under the following circumstances:
- When they are not licensed to engage in that business or take contractors’ jobs
- The person engages in contracting businesses with a license that was suspended for failing to pay a penalty or adhere to a particular order of correction, or for failing to resolve an outstanding final liability
However, before a court finds you guilty of contracting without a valid license, the prosecutor must prove the following elements beyond a reasonable doubt. These elements constitute the legal definition of the offense:
- That you served as a licensed contractor without a valid or current license from the state Licensing Board, or
- You operated as a contractor under a suspended or revoked license. Your license was suspended or revoked for failing to pay a penalty or adhere to a particular correction order.
- You did so knowingly.
For this law, a contractor provides services to individuals or businesses under contractual agreements, rather than directly as an employee. Contractors are hired to work on specific tasks or projects and are generally paid according to a project or milestone. They are usually independent workers, meaning they do not require supervision by the person or business they work for. They also use their tools and techniques to complete tasks assigned to them.
A contractor can also be a builder. They construct, alter, repair, improve, move, wreck, or demolish a building or structure according to the instructions given to them by the one who hires them. They can develop a project or improve an existing one by adding to or subtracting from it. Since contractors serve different individuals or businesses throughout the state, a license demonstrates their competence and compliance with laws and regulations that govern their profession. Thus, entering into a contract without a valid contract is unlawful. An agreement entered into by an unlicensed contractor is also illegal.
Contractors are responsible for training, acquiring the required experience on the job, and applying for a license before accepting jobs and entering into contracts. Individuals and businesses must also carefully contract licensed contractors to avoid illegal deals resulting in severe damages, including financial losses. If a contractor contracts services without a valid license, they do not have the right to collect pending payment for the work performed under an illegal contract.
Example: Stephen’s construction company has been operating for years. Sadly, he recently faced a financial situation and could not renew his license for one year. However, he had pending projects that he continued to work on, even though his license was invalid.
One of his new clients, Tom, found out about his unrenewed license. He took advantage of that situation to avoid making the last payment according to the contract he signed with Stephen’s company. Unfortunately, Stephen cannot recover pending payments because he completed Tom’s project on an invalid license. He is also guilty of operating on an invalid license, violating BP 7028.
Possible Penalties for Contracting Without a Valid License
A first offense for contracting without a license is a misdemeanor, punishable by the following penalties:
- Six months in jail
- $5,000 in court fines
If you have a prior conviction for contracting without a valid contract on your record, the court will likely impose a 20% fine of the price of the illegal contract, or 20% of the total payments you received from your client or clients, or a court fine of $5,000 (whichever is greater). Additionally, the judge can sentence you to a minimum of 90 days in jail. You could be eligible for more lenient penalties if a less severe penalty would serve the interest of justice.
If you have two or more prior convictions for contracting without a valid license, your penalties can include a court fine of between $5,000 and $10,000, or 20% of the total amount you received from the illegal contract, whichever is greater. Additionally, the court can sentence you to a maximum of one year in jail, but with a mandatory 90-day jail sentence for third or subsequent offenses.
Sometimes, the judge can issue a probation sentence instead of sending you to jail for the required period under the law. While probation allows you to remain in the community and maintain employment or family responsibilities, you must abide by strict probation conditions. Remember that a mandatory jail sentence of 90 days applies to defendants facing second or subsequent charges under BP 7028. Thus, you must complete the compulsory jail sentence to start your probation.
Misdemeanor probation can last for up to three years. During this period, you could be expected to do or not do the following:
- Not to engage in crime
- To participate in community service
- To periodically submit performance reports to the court
- To pay victim restitution according to the guidelines given by the judge during sentencing
- To pay all court fines and penalty assessments that apply in your case
Probation conditions are mandatory to abide by throughout probation. Even a minor violation can result in severe consequences. If you violate probation, the judge can hold a hearing to determine the consequences of the violation. Depending on the severity of your actions, the judge can:
- Continue probation under the original terms and conditions, but with a strict warning against further violations
- To continue probation, but with new and more stringent probation conditions and a strict warning against violations
- To discontinue probation and send you to jail for the period recommended under the law for this offense.
Discipline By Contractors State License Board
Contracting without a valid license is a criminal offense that will likely affect your future license and career. You could be subject to license revocation or suspension if you are convicted of specific crimes, like BP 7028, which are related to your qualifications, duties, and functions. However, you can help your situation with the help of your attorney if you know the following:
- You have a right to an administrative hearing before your licensing board disciplines you for contracting without a valid license. This allows you to fight the allegations for a favorable outcome.
- Your licensing board must demonstrate clear and convincing proof of your violation before revoking or suspending your license. It will revoke or suspend your license if there is proof that you cannot hold that license.
- If you committed the violation within the last seven years, you would be disqualified from holding a license if the violation was grave and essentially related to your profession as a contractor.
- The state can deny your license application based on your previous conviction for a crime that affects your professionalism as a contractor.
- If the board suspends your license for a previous violation, you can apply for reinstatement to continue contracting within the state.
A skilled attorney can help you fight for a reasonable outcome if you face discipline for contracting without a valid license. For example, if you face license suspension or revocation, they can fight for probation, whereby you are allowed to continue contracting but under strict probation conditions. If you complete probation without a violation, your attorney can help you reinstate your license.
An attorney can also appeal for a denied license. If the violation under BP 7028 was grave (for example, if it involved an expensive project), your subsequent application for a contractor’s license could be denied. Your attorney can provide mitigating factors, like your excellent performance record, to appeal the denial.
Penalties for Multiple Violations
It is not unusual to enter into multiple contracts when operating without a valid license. When this happens and you are arrested, the prosecutor treats each contract separately. Thus, you will likely face several counts of the same offense, which could result in severe penalties if found guilty on all counts.
Fighting Charges for Contracting Without a Valid License
Contracting without a valid license is a severe offense whose conviction has grave penalties and other life-changing consequences. In addition to paying a hefty court fine and serving a jail sentence or probation, a conviction will leave you with a damaging criminal record. Since criminal records are public, anyone who runs a background check on you will likely find out about the conviction. You could lose promising job prospects because potential employers conduct background checks on potential employees before hiring them. Landlords, too, perform background checks and could make renting decisions based on their findings.
Fortunately, you can defend yourself from your charges to avoid these and other severe consequences of a conviction under BP 7028. You can do this with the help of a competent criminal defense attorney. Here are some of the techniques they can use to obtain a favorable outcome in your case:
You Are an Employee of a Licensed Contractor
The law requires professional contractors to obtain a license and renew it on time to offer legal services throughout California. However, this requirement does not apply to employees working for licensed businesses or individuals. If your employer is licensed, you can offer your services under your employer without facing legal issues, even without a contracting license. You can use this defense strategy if you are an employee and face charges for contracting without a license. Your attorney can demonstrate that you work for a licensed attorney to cause the court to dismiss your charges.
When you work for a contracting company, your employer enters into contracting agreements, not you. They will be liable for violating any term or condition in the contract, as under BP 7028. In these cases, the statute does not apply to the employee.
Example: Jacob is a professional painter. He is currently working with a local construction company. Unknown to him, his employer has not renewed his contracting license for years. While working on his last job of the week, Jacob was arrested for contracting without a license. However, he was released almost immediately after he had proved that he was an employee of the construction company and not the owner. However, his boss was not so lucky, as he was immediately arrested and charged with violating BP 7028.
You Are Not a Contractor
BP 7028 requires contractors to have valid licenses to contract services legally. If you face charges for violating this statute, you must meet the legal definition of a contractor. For this law, a contractor is a construction worker or builder. Contractors are people who improve or build structures. A skilled attorney will ensure you meet all the elements legally defining contractors. If you fall short of the definition, you are not a contractor and cannot face charges under BP 7028.
Example: Charles takes up a few jobs to design living spaces for some of his neighbors before going to college to study interior design. He is very good at putting pieces together for interior decor and organizing living spaces. While his work is generally good and affordable since he is not a professional interior designer yet, one of his clients reports him contracting without a license to avoid paying for Charles’ services.
Although Charles operated without a license, his services did not meet the legal definition of a contractor’s job. Remember that a contractor builds, destroys, or improves a structure. All Charles did was organize spaces and change decor. He is not a contractor, so BP 7028 does not apply to him.
The Job Was Very Small
BP 7028 has exceptions that can help you when facing charges for contracting without a valid license. In addition to being exempted from prosecution if you are an employee of a licensed contractor, you could be exempted if you are engaged in a small project. Remember that this law protects individuals and businesses from illegal practices that could cause them to suffer such damages as financial loss. If the job is small, the risk of loss is also low, which can help your situation.
You are exempt from prosecution if you contract a job worth $500 or less without a valid contract. Projects that fall under this category are considered casual, minor, or inconsequential projects. The prosecutor will not file charges against you for contracting a casual or small project without a valid license. However, you could face prosecution if your client reports a loss because of a job poorly done or services not delivered.
Example: After losing his job in a major construction company, James started taking small projects before he could obtain a contracting license and launch his business. However, his former boss is jealous and reports him for contracting without a license. James defends himself by proving that the projects he has worked on without a permit were all casual or inconsequential jobs. He is exempt from prosecution because they are all valued at less than $500.
You Are Falsely Accused
False accusations are widespread in the criminal justice system. Some people falsely accuse others of a crime to get them in trouble or make them look bad. They do so out of jealousy, revenge, or to get even with them. If you are falsely accused, you need a solid defense to convince the court of your innocence. For example, you can provide a valid license in court to counter the allegations that you are contracting or have contracted without a valid license. The license should be valid when you supposedly signed the illegal contract for which you are accused.
Working with a skilled attorney is helpful because they will ensure you are not convicted of a crime you did not commit.
Contracting Without a License and Related Crimes
The following crimes are closely related to BP 7028:
The Fraudulent Use of Contractors’ License Numbers
According to BP 7027.3, fraudulently using a contractor’s license number is a wobbler offense. This can happen if you use someone else’s license number without authorization or knowingly use a fictitious license number for fraud. A wobbler offense means the prosecutor will file a misdemeanor or felony charge against you. Their decision is based on the facts of your case and your criminal history.
A misdemeanor is punishable by six months in jail, while a felony is punishable by three years.
False Advertising
According to BP 17500, it is a misdemeanor offense for anyone or any component to use false advertising. This law prohibits deception and false advertising practices, including misleading statements that could compel consumers to buy a product or service. The penalties for this offense include six months in jail and $2,500 in court fines. You can also face a legal injunction or civil lawsuit for false advertising.
Find Competent Criminal Defense Services Near Me
Do you or your loved one face criminal charges under BP 7028 in San Diego?
If you are a professional contractor, you must continuously operate with a valid license. This means applying for a permit before you start contracting, renewing it in time, and applying for a reinstatement once your license is suspended. Any contract you enter without a valid license is illegal and can result in criminal charges. Depending on the nature of your crime and criminal history, the prosecutor can file misdemeanor or felony charges. The penalties are grave, and the consequences are life-changing
However, we can help you fight for a favorable outcome at the Law Offices of Ann R. Yum. We can review your case to help you understand the severity of your charges, possible penalties, and options. We can also work together to gather evidence and put together a strong defense that could cause the court to drop or reduce your charges. Call us at 619-493-3461 to start the legal process with our skilled and experienced attorneys.
