SBE News



Capitol Connection 10/01/2019

Unrelated Trades, Qualifier Risk And Unwritten Rules On HOA Contracting

While the rules are written in contractor law sometimes the interpretation can be challenged and changed. That also applies to licensing questions here. We go back to the future for a new take on a previous question updated by ‘legal’ expertise! Another question takes us into an arena where an attorney should be part of a ‘tag team’ to complete the answer. A final contractor question is also ‘related’ to interpretation…

Shauna Krause, writer of Capitol Connection

Q:  Does the California Law on Home Improvement contracts (Bus. & Prof. C. 7159) apply to contracts between a contractor and a Home Owner’s Association (HOA)?

A:  Last week I stated that the way I read B&P Code 7159(b) regarding Home Improvement contracts, I didn’t believe it would apply to a contract between a contractor and a Home Owner’s Association (HOA).  I had several attorneys offer an updated interpretation as they pointed out that since the HOA acts as an agent for the unit owner’s and the property is owned by the HOA, the HOA becomes the De Facto owners, and therefore B&P Code 7159(b) does in fact apply. I always appreciate the feedback!

Q:  I presently hold an Active “A” (General Engineering) and “B” (General Building) Contractor’s License in California. I am in the process of becoming a Responsible Managing Officer (RMO) for a Corporation. I was wondering if you would recommend that I speak with an attorney prior to finalizing the agreement or is this a relatively “low risk” situation? 


A:  Thank you for contacting Capitol Services Inc.  I wouldn’t necessarily call it a “low risk” situation.  There are responsibilities that come along with acting as an RMO/RME for a company. I’d be happy to discuss the general differences with you informally however I am not a legal expert, and ‘risk’ is always relative. However, I suggest you seek legal advice in this by contacting an attorney.

Q:  I understand that a General “B” Contractor may only take a job if there are at least two “unrelated” trades or crafts involved.  How can you determine if they are “related” or not? In particular, how can you determine if “C-10” (Electrical) work is “related” to “C-7” (Low-Voltage) work?

A:  While the term “related” is somewhat subjective, “C-10” work would most definitely be related to “C-7” work. The fact that a “C-10” contractor is covered to perform low voltage work without needing the “C-7” classification specifically, means they’re related. A “C-5” (Framing and Rough Carpentry) contractor can do overhead doors, staircases and railings, sub-flooring, etc. which would make all of those related.  There’s no official “chart” or anything but if you are wondering about something else in specific, let me know. 

Source: http://cutredtape.com/archives/2019/09/19/unrelated-trades-qualifier-risk-and-unwritten-rules-on-hoa-contracting/


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