A new law will raise the threshold for work requiring a contractor’s license from $500 to $1,000.
Assembly Bill 2622 (Carrillo, Chapter 240, Statutes of 2024), effective January 1, 2025, will allow an unlicensed person to complete small projects up to $1,000 without obtaining a contractor’s license if they do not hire workers and no building permits are needed. If a consumer’s project under $1,000 requires workers or permits, a contractor’s license in the appropriate license classification is required.
The new law states that a person who is not licensed may advertise for construction work if the total contract price for labor, materials, and all other items on a project is less than $1,000. The $1,000 includes all costs associated with the project. The advertisement must state the person is not licensed.
As with any home improvement construction project, CSLB cautions that a down payment should not exceed 10 percent of the contract price, and any subsequent payments should not exceed the value of the work completed or the materials delivered.
If an unlicensed person provides a bid greater than $1,000, performs work requiring a permit, or employs any workers, that person is subject to legal action. Penalties for unlicensed contracting include administrative fines of up to $15,000, jail sentences of up to six months, and fines up to $5,000. Repeat offenders may face a mandatory 90-day jail sentence and a fine of $5,000 or 20 percent of the contract price, whichever is greater.
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