Hiring a Contractor to Repair Storm Damage in California

California requires a contractor license for repairs that need a building permit or use workers, regardless of the price. The Contractors State License Board advises owners to check a contractor's license status and history before hiring after a disaster.

FOX LA reported that Newport Beach declared a local emergency after coastal flooding inundated streets on the Balboa Peninsula. The full extent of property damage was not immediately known.

That declaration matters to repair costs. The California Governor's Office of Emergency Services says an emergency proclamation from the Governor, the President of the United States or a local government triggers price gouging protections. Those protections may also be extended.

A contractor must hold a current, valid license for a project that requires a building permit, uses employee labor or workers, or is valued at $1,000 or more for combined labor and materials costs, according to the Contractors State License Board. A smaller price does not remove the license requirement if the project requires a permit or workers.

The Contractors State License Board says owners can verify a contractor's license online or by phone. We advise checking the license status and history before signing.

The Contractors State License Board warns that contracting without a license in a declared disaster area is a felony.

For a home improvement contract subject to Business and Professions Code section 7159, the down payment may not exceed $1,000 or 10 percent of the contract price, whichever is less. The section excludes qualifying service and repair contracts governed by separate provisions.

The same section requires a progress payment schedule that describes each phase of work and the amount of each payment. It prohibits collecting payment for work not yet completed or materials not yet delivered, while allowing a down payment.

We advise checking the payment schedule against the work described in the contract. The Contractors State License Board also advises owners not to pay cash or let payments get ahead of the work.

A qualifying home solicitation contract for repair or restoration of residential premises damaged by a disaster carries a right to cancel within seven business days. Civil Code section 1689.7 ties this protection to the disaster provision in subdivision (c) of section 1689.6. The applicable notice depends on the contract type.

For the disaster repair home improvement contract notice described in Civil Code section 1689.7, the deadline is midnight of the seventh business day after the buyer receives a signed and dated contract copy that includes the notice. Cancellation must be in writing. The notice allows email, mail, fax or delivery to the contractor's place of business. It calls for the buyer's name, address and the date the signed copy and notice were received.

Under that notice, the contractor must return anything paid within 10 days of receiving the notice of cancellation. The buyer must make delivered goods available in substantially the condition received, or follow the contractor's return instructions at the contractor's expense and risk.

We advise checking the cancellation notice before signing. Business and Professions Code section 7159 says a buyer may file a complaint with the Contractors State License Board if the required cancellation notice is missing.

According to the California Governor's Office of Emergency Services, Penal Code section 396 generally prohibits a contractor from charging more than 10 percent above the price charged immediately before the emergency declaration for repair, reconstruction or emergency cleanup services. The statutory protection for those services lasts a period of 180 days following the proclamation or declaration.

A greater increase can be lawful if the contractor proves it directly results from additional supplier, labor or material costs during the emergency. The California Governor's Office of Emergency Services says the resulting price must represent no more than 10 percent greater than the contractor's cost plus the markup customarily applied before the emergency.

The California Governor's Office of Emergency Services lists different statutory protection periods for building materials and repair services. Extensions can change how long protections remain in effect.

The California Governor's Office of Emergency Services identifies the Office of the Attorney General, local district attorney offices, and state and local law enforcement as agencies that investigate and prosecute price gouging violations.