California Business and Professions Code 7028: Contracting Without a License
Operating as a contractor in California without a license is a serious criminal offense, not just a minor administrative violation.
Under California Business and Professions Code Section 7028 (BPC 7028), anyone who alters, repairs, builds, or improves a structure without a valid license from the Contractors State License Board (CSLB) can face arrest, steep fines, and mandatory jail time.
The law is designed to protect property owners from poor workmanship, fraud, and financial setbacks.
Violating this law can lead to serious criminal, civil, and financial consequences.
Cron, Israels & Stark can help you. Schedule your consultation today at (424) 372-3112.
1. What is BPC 7028? Legal Definition & Elements
To secure a conviction for unlicensed contracting under BPC 7028, California prosecutors must establish two core elements beyond a reasonable doubt:
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The defendant performed or offered to perform work that is legally required to be performed by a licensed contractor.
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The defendant did not hold a valid, active CSLB license, or their license was suspended or revoked at the time.
Who Counts as a "Contractor"?
Under California law, a contractor is broadly defined as any individual or entity that constructs, modifies, repairs, adds to, subtracts from, improves, relocates, demolishes, or destroys any building, excavation, or other structure or development project.
This definition encompasses activities such as framing, roofing, painting, flooring, landscaping, and electrical work.
BPC 7027.3 explains what is commonly called Contractor License Fraud. This regulation applies to both licensed and unlicensed individuals.
2. Criminal and Financial Penalties Under BPC 7028
Unlicensed contracting is a misdemeanor in California. However, the penalties escalate drastically with repeat offenses.
|
Offense Level |
Potential Jail Time |
Statutory Fines |
| First Offense | Up to 6 months in county jail | Up to $5,000 |
| Second Offense | Mandatory minimum 90 days in county jail (up to 6 months) | Greater of $5,000 or 20% of the total contract price/payments |
| Third+ Offense | Mandatory minimum 90 days up to 1 year in county jail | Greater of $5,000 to $10,000 or 20% of the contract price/payments |
Victim Restitution: In addition to court fines and imprisonment, judges often require defendants to compensate the property owner with full economic restitution for poor workmanship, property damage, or financial losses resulting from the unlicensed project.
3. Real-World Examples of BPC 7028 Violations
Example A: The $10,000 Kitchen Remodel
A local handyman agrees to fully gut and remodel a homeowner's kitchen for $10,000. He has a local city business tax license but is not licensed by the CSLB.
Midway through the project, the homeowner discovers he lacks the required license and contacts the authorities. The handyman may face arrest and charges under BPC 7028 because the project's scope and cost surpass the legal limits.
Example B: Operating on a Suspended License
A licensed general contractor fails to pay an outstanding civil penalty or a court-ordered family support judgment, resulting in automatic suspension of their license by the CSLB.
If they submit a bid or keep working on a commercial roofing project while suspended, they commit a misdemeanor under BPC 7028(a)(2), similar to an unlicensed individual.
4. Key Statutory Exemptions
Not every activity related to construction needs a license. Common legal defenses often rely on these particular exemptions.
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The Small Operations / "Handyman" Exemption (BPC 7048): A license is not required when the total contract price, including labor, materials, and all other items, is less than $500.
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Crucial Nuance: You cannot split a single large project into multiple smaller $450 contracts to bypass this rule. The project as a whole must be under $500.
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The True Employee Exemption: If you work as a W-2 employee earning hourly wages or a salary from a licensed contracting company, you are not personally liable. The responsibility lies only with the employer.
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The Owner-Builder Exemption: Property owners who upgrade their primary residence are usually exempt, as long as the property is not meant for immediate sale or lease.
5. Related California Laws & Financial Consequences
Unlicensed contractors face severe civil and administrative liabilities alongside their criminal charges.
The Disgorgement Law: BPC 7031
This represents the most financially damaging civil penalty in California construction law. According to BPC 7031, an unlicensed contractor:
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You cannot sue a property owner to recover unpaid funds for work done, even if the work was perfect.
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They can be compelled to return every dollar paid by the property owner, even if the owner was unaware they were unlicensed from the beginning.
Fraudulent Use of a License Number: BPC 7027.3
If an unlicensed individual uses a fake license number or displays a valid CSLB license number belonging to someone else to secure a job, they can be charged under BPC 7027.3.
This elevates the crime from a simple misdemeanor to a wobbler offense, meaning prosecutors can charge it as a felony punishable by up to 3 years in state prison.
False Advertising: BPC 17500
Advertising for construction or home improvement work without a license is illegal unless the ad clearly states the advertiser is not a licensed contractor. Violating this rule can lead to separate misdemeanor charges under California's unfair business practices laws.
Frequently Asked Questions (FAQ)
Can I do a job over $500 if the homeowner provides all the materials?
No. The $500 exemption for small operations is based on the combined total fair market value of labor and materials, regardless of who purchased them. For example, if materials cost $400 and labor costs $150, the project's total value is $550, which means a CSLB license is required.
Is contracting without a license ever charged as a felony?
A standard first- or second-time violation of BPC 7028 is a misdemeanor. However, it can become a felony if you operate during a state or federally declared natural disaster (like a wildfire or earthquake), or if you commit identity theft by fraudulently using a real contractor's license number.
What is the statute of limitations for BPC 7028 in California?
The state has four years from the latest of the following: the date of the contract proposal, the contract signing, the completion of physical work, or total abandonment of the project, to officially file criminal charges.
Speak to a California Criminal Defense Lawyer Today
If you face an investigation, an administrative citation from the CSLB, or formal misdemeanor charges under California Business and Professions Code 7028, do not consider it a minor business dispute.
A conviction can lead to a permanent criminal record, mandatory jail time for repeat offenses, and severe financial restitution or disgorgement actions.
Every case contains vulnerabilities. An experienced criminal defense attorney can assess your situation to determine if you qualify for a statutory exemption, dispute the prosecution's project cost calculations, or safeguard your livelihood from aggressive state enforcement.
Need Legal Advice? Schedule a Consultation.
If you've been targeted in a CSLB sting operation or face charges for contracting without a license, prompt legal action is essential.
Reach out to Cron, Israels & Stark today for a confidential case review with an experienced criminal defense attorney specializing in California construction and regulatory law.