Legal Question in Construction Law in California
How to end arrangement with unlicensed contractor?
My problem is this:
In an attempt to protect ourselves from being charged more than the agreed upon price by the unlicensed ''contractor'' we hired, we put together a simple document that lists, in detail, the scope of work to be done, the payment schedule/total cost for project, and a proposed calendar but does not list any terms for terminating or changing our arrangement. My husband and I and the ''contractor'' all signed the document.
We are now in a position where we would like to end our arrangement with the ''contractor'' prior to his completion of the outlined project.
My questions are these:
1. If we ask him to stop working, are we breaching a contract since no terms for termination were in the signed document?
2. Can we be forced to pay the remaining balance of the project costs, even if he doesn't complete the work? (Our terms clearly state the stages of work needed to be completed before payments are due so if he doesn't do any more work, there should be no more money due him, correct?)
3. Can he sue us or file a lien against us if we don't pay?
4. We do currently owe him another round of payment according to our payment schedule, but don't feel he has done the work properly, do we still have to pay?
Thanks
3 Answers from Attorneys
Re: How to end arrangement with unlicensed contractor?
You have no legal obligation to pay an unlicensed contractor. In fact, the law allows you to recover anything you've paid to an unlicensed contractor. The code section is Business & Professions Code 7031.
Re: How to end arrangement with unlicensed contractor?
A contract between homeowners and a person who undertakes to do work for which a contractor's license is required, but doesn't have one, is generally void and unenforceable in California. It's in the Business & Professions Code, I think section 7039 or at least near there.
So, legally, you can treat such a contract as though it never existed.
A a matter of moral obligation and being practical, I would advise you to wrap up your dealings with this person in a way that is fair and reasonable to both of you, and there is less possibility for hard feelings, retribution, or a mess left at the jobsite. Make sure all the suppliers' bills have been paid.
Re: How to end arrangement with unlicensed contractor?
As two other attorneys have correctly noted, this was an illegal contract to begin with. Legally, you could terminate the contract and get ALL of the money back. But the Dr. Laura in me also wants you to "do the right thing".
I would pay him the value of his work and wrap up your affairs with him as soon as possible. Then hire a LICENSED contractor to finish the work. If this person gives you any problems, you should remember that you have the upper hand in settlement negotiations and could report him to the Contractor's State License Board for possible criminal prosecution. However, do NOT threaten him with criminal prosecution as a negotiating tactic.
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