California Construction Laws That Private Contractors Should Know
Whether you are an existing California contractor or are new to the state and looking to start your own construction company, it’s important to be aware of the local laws and regulations. California is notorious for regulatory changes, which can be daunting for contractors. This article will serve as a guide on the important California construction laws and regulations to help you stay up to date.
Common California Construction Laws
Common California construction laws cover various aspects of construction, including building standards, licensing, labor regulations, safety, and environmental compliance. Here are some of the key laws and regulations:
- California Building Standards Code (Title 24)
- Contractors State License Law
- Mechanics’ Lien Law
- Prevailing Wage Law
- California Environmental Quality Act (CEQA)
- Cal/OSHA Regulations
- Zoning and Land Use Laws
Setting Up a Construction Company in California
When starting a new construction company as a private contractor, following the law “to the T” is important to ensure compliance. Legal regulations are not something to gloss over or dismiss. If you run afoul of the law, it can result in serious consequences that can impact the success of your business.
Of course, you’ll want to focus on budgeting and planning for your business, as well as coming up with a name and getting your business registered. However, in addition to those initial steps, you must pay close attention to all of the legal requirements of getting your new construction business up and running.
Important Legal Regulations for New Contractor Businesses
Under California construction law, the following are required of any private or independent contractor who is seeking to start their own business:
Licensing
The Contractors State License Board (CSLB) of California requires contractors to obtain a license when engaging in any work on projects valued at $500 or more. When applying for your license, you will also need to submit certification of your journey-level work experience, of which you need at least four years before you can qualify.
Insurance and Bonding
The CSLB also requires all contractors to obtain a bond for any projects valued at more than $500. You will not be able to obtain your license until you have purchased the bond. The current minimum requirement for bonds as of January 2023 is $25,000. In addition to bonding, contractors must also carry workers’ compensation insurance as of 2023.
Contract Laws
For any project exceeding $500, the CSLB requires contractors to create a written contract. These contracts are necessary as they define the scope of the project, potential liabilities, responsibilities, and terms of payment. To ensure compliance, it is often necessary to have these contracts reviewed by an attorney.
Safety Regulations
Contractors must adhere to California OSHA regulations as laid out in California Code, Title 8, Division 1, Chapter 4, Subchapter 4. As with many construction laws in California, these regulations are constantly changing. To stay up to date, visit the Cal/OSHA website.
Building Permits
Nearly all construction projects require building permits in California. Code requirements can vary depending on the city or county, so it’s important to check with your local building department. The CSLB provides resources here to help.
Recent Changes to California Construction Law
As previously mentioned, California is known for frequent regulatory changes. As such, it’s important that you check the CSLB website for news and updates. Below are some of the most recent changes that have occurred concerning California construction laws:
AB 336 — Effective July 2024, this change requires contractors with workers’ compensation insurance or self-insurance to certify workers’ compensation classification codes on their license renewal form.
SB 216 — Changes to this bill require any contractor holding certain licenses to carry workers’ compensation insurance, even if that contractor doesn’t have any employees. This applies to C-8 concrete contractors, C-20 HVAC contractors, C-22 asbestos abatement contractors, and D-49 tree service contractors.
SB 607 — To safeguard consumers, changes to this bill include raising minimum bond rates from $12,500/$15,000 to $25,000. Additionally, the bill also expands the CSLB’s authority concerning fees and changes fee structures for certain businesses.
You can also reference the California Contractors Law Book which is updated as needed on the CSLB website for more information and details on changes to construction laws and regulations.
Radoslovich | Shapiro, PC Attorneys: Construction Law
While contractors need to do their due diligence concerning researching and following the law, we understand how overwhelming this task can be. At Radoslovich Shapiro, we aim to make construction law more accessible by providing contractors with full-service legal assistance.
We help with everything from contract drafting to defect litigation to insurance bad faith. We also provide general counsel to help meet a wide range of needs.
Our team takes a collaborative and innovative approach to legal services to provide full-service support. Our goal is to address our client’s needs by giving each transaction the care and attention it deserves.
For more information or to set up a consultation, please contact us online or give us a call at 916-565-8161.
