SBE News

Capitol Connection #1013

Asbestos Abatement, Referral Fees and License Continuance Requests

Regarding Asbestos Abatement, while one way may be blocked, an expert guide often knows another way to get where a contractor is going. While you may be an ‘agent’, a contractor has different rules that may not be ‘brokered’. Finally, a corporate contractor discovers no help in reaching the ‘end of the road’ with his partners…Shauna Krause, writer of Capitol Connection

Asbestos Abatement

Q: We are a General Building “B” contractor and occasionally when we do demo work we run in to asbestos. Are we permitted to remove the asbestos as it’s part of our General Building project?

A: “B” contractors are not permitted to contract for any project which includes asbestos abatement work unless the contractor holds the “C-22” Asbestos Abatement and DOSH registration or the Asbestos Certification. The Asbestos Certification allows you to remove asbestos in relation to your classification. “B” contractors can also contract for asbestos abatement if they subcontract with an appropriately licensed contractor.

Referral Fees

Q: I am a Real Estate Broker and I have been reading some of your recent articles regarding referral fees and inducements and I don’t see that you have addressed whether a Contractor can pay a referral fee to a Real Estate Broker who refers the broker’s client to the contractor. I would be furnishing a “lead”, nothing else. Referral fees are common and legal in my industry. I refer SBA loans to a lender and the lenders pay referral fees. It’s the same with Apartment and commercial loans, in that lenders pay referral fees just for the lead. Also, if I refer a buyer or seller to another Broker, the Broker pays me a percentage of the business. I don’t understand why the Construction industry is any different.

A: Thank you for contacting Capitol Services, I’m glad to hear you follow the weekly column. The way I read the statute regarding prohibited inducements (B&P Code 7157) is that a contractor cannot offer compensation to another contractor or owner for the procurement or placing of home improvement business with others. So if you are not acting as a contractor or owner, the referral fee seems permissible.

As to why they are treated differently? I can’t say, but the Legislature makes the laws and the root of that difference starts in how those rules are written by lawmakers. In my experience the CSLB seeks to create a ‘level playing field’ for licensed contractors giving consumers and contractors an equal choice on bids.

License Continuance Requests

Q: My partners and I have had our corporation for over 10 years. Being that we have had our differences and it’s the first of the year, we are ready to part ways and do our own thing for various reasons. Our problem is we have several ongoing contracts that we don’t want to abandon. Is there any way we can shut down the corporation and request a continuance from the CSLB on our license to finish the work we have in progress?

A: Unfortunately, Corporations and Limited Liability Companies (LLC’s), are not eligible for a continuance.
Sole Ownership licenses, Partnership, and Joint Venture licenses are permitted to request a continuance under certain circumstances. These license continuance requests can only be considered when you submit the proper documentation within 90 days of the event which causes the cancellation.

Capitol Connection By Shauna Krause, President, Capitol Services, Inc.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email, or write us at Capitol Services, Inc., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at