January/February 2018

News from Abdulaziz, Grossbart & Rudman

Abdulaziz, Grossbart & Rudman Newsletter
January / February 2018

We hope that you enjoy this edition of our Newsletter.
Remember, if there is anything that you would like to see in the future, please let us know.
The Staff at
Abdulaziz, Grossbart & Rudman


The California legislature was busy in 2017 with Democratic super-majorities in both houses! The following is a brief recap of some changes in the laws that can affect contractors or businesses:
  • Labor Liabilities: A direct contractor is now required to assume and be liable for debt owed to a wage claimant that is incurred by a subcontractor, at any tier, who is acting under, by or for the direct contractor. This new law protects the employees of subcontractors, who can now seek payment from the direct contractor.
  • Home Inspectors: Generally, a home inspector is prohibited from performing repairs to a structure on which it has prepared a home inspection report within the past 12 months. A licensed roofing contractor is now exempt from this law if it performs repairs for the specific purpose of providing a roof certification, if specified conditions are met.
  • CSLB Letter of Admonishment: If the registrar of the Contractors' State License Board has probable cause to believe that a licensee or applicant has committed any acts or omissions that are grounds for denial, revocation, or suspension of license, he or she may issue a citation. The registrar is now also authorized to issue a written and detailed letter of admonishment in lieu of issuing a citation. (See below for an in depth article on this topic.)
  • Recording Fees: An additional $75 fee is being imposed at the time of recording of every real estate instrument, paper or notice per each transaction per parcel of real property, not to exceed $225. This includes the recording of mechanic's liens, notice of completions, and lis pendens, but excludes any documents recorded in connection with the sale of real property. The county recorder is required to send revenues from this fee quarterly, after deduction of any actual and necessary administrative costs incurred by the county recorder, to the Controller for deposit in the Building Homes and Jobs Fund.
  • PACE Program Administrator: A PACE program administrator is now required, before a property owner signs an assessment contract, to make an oral confirmation that at least one owner of the property has a copy of specified documents and forms related to the contract and to provide oral confirmation of the key terms of an assessment contract to the owner or an authorized representative of the owner on the call.
  • Internet Web Site Posting of Payments: Within 10 days of making a construction contract payment, a state agency must post on its website the project for which the payment was made, the name of the contractor or company paid, the date the payment was made or the date instructions were transmitted to make the payment, the application number or other identifying information, and the amount of the payment.
  • Public Works Definition: Specific types of tree removal work are now included within the definition of "public works." Willful violation of laws relating to the payment of prevailing wages on public works is a misdemeanor, and with this expended definition, the scope of the crime is expanded.
  • Salary and Conviction History: Most employers are now prohibited from seeking salary or criminal conviction history information from a job applicant. It can, however, conduct a conviction history background check after a conditional offer of employment is made.
Here's to a successful and prosperous 2018!

March 3, 2018 | 9:00 a.m. to 4:00 p.m.
Long Beach Convention Center
300 E. Ocean Blvd., Long Beach, CA 90802

Come visit the attorneys of Abdulaziz,
Grossbart & Rudman in booth 319.

Bruce Rudman will be speaking on
"Contract Requirements for
Contracting in California"
This seminar will cover what is required to be in various contracts, including residential and commercial contracts with owners, and what to look out for to protect yourself in subcontracts - or conversely what to demand where you are the one subcontracting to a lower tier subcontract. The discussion will include an examination of indemnity provisions, insurance requirements, and the pitfalls of conduit clauses and the references to "contract documents" in various contracts. The seminar will discuss requirements in home improvement contracts.
The time is to be determined.
New Contractors' Board Disciplinary Tool May Give Relief to Contractors While Streamlining the Disciplinary Process for the Contractors' Board

The Legislature recently passed a bill (SB 486) which becomes effective January 1, 2018, and which adds another disciplinary tool to the Contractors' Board. We believe this took is actually a huge benefit to the industry as well as the Board as it allows the Board to impose something less than a Citation with a five-year "Scarlet letter" reported on the CSLB website.
The Contractors' Board previously had three disciplinary tools in its arsenal: a Warning Letter, a Citation, and an Accusation. A Warning Letter notified the contractor of the violation, but it is private and would merely stay in the file unless there were further violations of the same section. A Citation is like a traffic ticket, which if paid and complied with, the license stays in full force and effect. An Accusation is an effort to suspend or revoke a license; the settlement of that Accusation, if it can be settled, would include some substantial terms of probation. Since we are talking here about minor violations which only previously gave rise to a Citation, this article won't focus on an Accusation.
The biggest problem with the Citation is that it is publicly reported on the Contractors' Board's website for five years from the completion of the Citation. This means that if you appeal it, it is reported for five years from when you ultimately pay the fine and do what you are ordered to do. The requirement that the Citation be reported for at least five years has caused many contractors to appeal Citations. Just appealing the Citation usually takes six to eight months, or more, before a hearing is held. The Contractors' Board has reported that their costs of defending an appeal of a Citation sometimes is as much as $7,500, and that is not recoverable from the licensee and that is why liked the idea of the Letter of Admonishment. The industry should also like the idea of the Letter of Admonishment if it is properly used.
Starting in January, the Contractors' Board can issue a Letter of Admonishment. This is similar to a reproval in other license categories, and the Letter of Admonishment would, in writing, describe the nature in facts of the violation. The initial appeal process would be through the Contractors' Board itself, rather than through an Administrative Hearing before the Office of Administrative Hearings. There is still a judicial review process, but any lawyer would likely tell a contractor that by the time it takes to complete the judicial review process, the Admonishment would no longer be on the contractor's file if it was not appealed. The benefit of the Letter of Admonishment is that it is reported for one year.
However, this tool will, hopefully, pacify many contractors concerned about disciplinary actions that show up on their public website for extended periods of time for what some would view as "ticky tack violations" or violations that didn't cause any injury to the customer. I recently had the pleasure of giving a seminar along with the Registrar of Contractors, David Fogt, before a trade association of contractors. Mr. Fogt indicated that the Letter of Admonishment would be used for technical violations, such as form violations, and in some cases, failure to properly register salespersons. While he did not say so, it is unlikely to be used in any instance where there is a finding of a monetary injury to a consumer.
As noted, it is hopefully a means of easing up the workload of the disciplinary staff of the Contractors' Board, allowing them to save cost on appeals, yet assisting contractors by reminding them of the obligations under the law without penalizing for the five years that the Scarlet Letter of a Citation remains on the public website.
We will have to see how the Contractors' Board utilizes the Letter of Admonishment but for now, it seems like a tool that would greatly benefit the industry.
The Beavers

The Beavers is a social, honorary organization, formed, organized and managed by the construction companies and individuals who are or have engaged in heavy-engineering construction.

The purpose of the Beavers is to promote good will, friendliness and consideration...to give recognition to those men and women who have demonstrated particular skill, responsibility and integrity...and to encourage and support the entry of promising young individuals into heavy engineering construction.

On Friday, January 19, 2018, Ken Grossbart and Bruce Rudman attended the Golden Beavers Awards Dinner for the first time, thanks to Kirk S. MacDonald (not pictured). We hope to have a long relationship with this wonderful group.

For more information about The Beavers, please visit their website www.thebeavers.org.
Abdulaziz, Grossbart & Rudman
provides this information as a service to its friends and clients. This Newsletter is of a general nature and is not intended to be a substitute for legal advice. This Newsletter does not establish an attorney-client relationship with the reader. Since laws are ever changing, please contact an attorney before using any of the information contained within this Newsletter.
Abdulaziz, Grossbart & Rudman
6454 Coldwater Canyon Ave.
North Hollywood, California 91606
(818) 760-2000; (818) 760-3908 (fax)
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