Bad Contractor Questions — Answered

If a contractor did bad work on your home, you have several legal options. You can demand they return to fix the defects in writing, file a complaint with the CSLB at cslb.ca.gov, pursue the contractor in small claims court for amounts up to $12,500, file a claim against their $25,000 surety bond, or hire a construction attorney to file a formal lawsuit. Document everything with photos, contracts, and receipts before taking action.

Yes. California law allows homeowners to bring claims for breach of contract, negligence, and violation of the Contractors State License Law. If the contractor is licensed, you may also file a claim against their $25,000 surety bond. The statute of limitations is 10 years for latent defects and 3 years for patent (visible) defects from the date of substantial completion.

A contractor who takes money and abandons a project may have committed contractor fraud under California Penal Code §532 and home improvement fraud under Business and Professions Code §7160. File a police report immediately, file a CSLB complaint, and file a bond claim if the contractor is licensed. Consult a construction attorney — fraud cases may entitle you to three times your actual damages.

For home improvement contracts in California, a contractor may not legally charge more than 10% of the total contract price or $1,000 — whichever is less — as a deposit before work begins. Charging more than this is a violation of Business and Professions Code §7159.5 and may constitute home improvement fraud under §7160, which carries civil penalties of three times your actual damages.

Go to cslb.ca.gov and complete the online complaint form. You will need the contractor's license number, contact information, a description of the work performed and the problems that arose, the amount paid, and supporting documentation such as photos and your contract. After filing, the CSLB assigns an investigator who contacts both you and the contractor. For disputes under $50,000, you can also request binding arbitration through the CSLB's free Arbitration Program.

The CSLB can investigate the contractor's conduct, suspend or revoke their license, require them to participate in binding arbitration, and refer serious cases for criminal prosecution. What it cannot do is directly compensate you for your losses — for financial recovery you need a bond claim, civil lawsuit, or CSLB arbitration award. Filing a CSLB complaint does not prevent you from simultaneously pursuing these other remedies.

A surety bond is a $25,000 financial guarantee that every licensed California contractor is required to maintain. If a contractor causes you financial harm through defective work, abandonment, or fraud, you can file a claim directly with the bonding company — without suing the contractor. Look up the bonding company on cslb.ca.gov, then contact them to start the claim process. File promptly — if multiple claimants file against the same bond, the $25,000 is shared.

If your contractor was not licensed by the CSLB at the time work was performed, California Business and Professions Code §7031 gives you the right to recover all money paid — even if the work was done correctly and even if you knew the contractor was unlicensed. This is called a disgorgement claim and is one of the most powerful remedies in California consumer protection law. A two-year statute of limitations applies from the date you discovered the contractor was unlicensed.

California small claims court handles disputes up to $12,500 for individual homeowners. You represent yourself — no attorney is allowed to represent you in small claims court, though you can consult one beforehand. Filing fees are low ($30–$75) and cases are typically heard within 30–70 days. For disputes over $12,500, you need to file in superior court, where an attorney is strongly recommended.

Yes — frequently. A formal demand letter signals that you are serious, have documented your case, and are prepared to take legal action. Many contractors resolve disputes after receiving a written demand rather than face CSLB complaints, bond claims, or litigation. An attorney-written demand letter typically carries more weight than a homeowner-written one. Even when the contractor ignores it, a demand letter creates powerful evidence in court that you gave them a fair opportunity to resolve the matter before suing.

California law sets different deadlines depending on the type of claim. Latent (hidden) construction defects: 10 years from substantial completion. Patent (visible) defects: 3 years from discovery. Breach of written contract: 4 years. Breach of oral contract: 2 years. Fraud: 3 years from discovery. Home improvement fraud (BPC §7160): 3 years. Bond claims: typically 1–2 years depending on the bond terms. Consult an attorney promptly — missing a deadline permanently bars your claim.

Yes. A contractor who claims they are owed money can file a mechanic's lien against your property under California Civil Code §8000 et seq. A lien can cloud your title, prevent you from selling or refinancing, and may lead to a lawsuit to force sale of your property. If you receive a mechanics lien notice, consult a construction attorney immediately. California has strict deadlines for disputing liens — typically 90 days from recording. Defenses include faulty work, unlicensed contractor, payment already made, and procedural defects in the lien itself.

If a contractor is threatening you — with a lien, a lawsuit, or personal harassment — document every threat in writing and consult a construction attorney immediately. California law protects homeowners from contractor intimidation. Threats related to filing legitimate legal complaints (like CSLB complaints) may themselves violate California law. Do not make additional payments under duress, and do not sign any release of claims without attorney review.

A failed building inspection is strong evidence of defective work and is relevant to both your CSLB complaint and any civil lawsuit. Request a copy of the failed inspection report from your local building department. The contractor is responsible for bringing the work into code compliance at their own cost. If they refuse, this failure is an additional breach of contract and CSLB violation. Report the failed inspection to the CSLB in your complaint.

Potentially yes. California law allows attorney fee recovery in contractor disputes under several theories: if your contract includes a fee-shifting clause (very common in construction contracts), if the contractor violated Business and Professions Code §7160 (home improvement fraud), or if the contractor acted in bad faith. Ask your attorney specifically whether attorney fee recovery is available in your case — it significantly affects the financial calculation of whether litigation makes sense.

California's Right to Repair Act (Civil Code §895–945.5) applies to new residential construction completed after January 1, 2003. It establishes specific construction standards and requires homeowners to go through a pre-litigation dispute resolution process before filing certain construction defect claims. If you are dealing with defects in a newly built home, this law likely applies. For renovation or remodel work done by a contractor on an existing home, the Right to Repair Act generally does not apply — standard contract and negligence remedies are available instead.

This depends on what the contractor has actually completed and what your contract says. California law generally allows withholding payment for work that is defective or incomplete. However, withholding payment for work that was substantially completed and accepted may give the contractor grounds to claim breach of contract or file a mechanic's lien. Do not withhold more than the amount genuinely in dispute. Consult a construction attorney before withholding any payment to understand the risks and your legal position.

CSLB arbitration is a free dispute resolution process available for claims involving licensed contractors where the dispute amount is $50,000 or less. A neutral arbitrator — not a judge — hears both sides and issues a binding decision enforceable as a court judgment. Arbitration is typically faster than court litigation, less formal, and free to the consumer. You do not need an attorney to participate, though you may bring one. The main difference from court is that arbitration decisions have very limited appeal rights — the decision is almost always final.

A contractor closing their business does not eliminate your legal rights, though it may make collection more difficult. If the contractor had a surety bond, the bonding company remains liable on claims filed during the bond's active period — even if the contractor is no longer in business. If the contractor files bankruptcy, your civil claims become claims against the bankruptcy estate. Consult a construction attorney immediately if a contractor who owes you money files bankruptcy — there are strict deadlines to file creditor claims in bankruptcy proceedings.

Go to cslb.ca.gov and use the "Check a License" tool. You can search by contractor name, business name, or license number. Verify: the license is current and active, the license classification matches the type of work you need, the license is in the name of the entity you are contracting with, there are no disciplinary actions or bond claims on record, and the bond and insurance are current. Do this before signing any contract — it takes less than five minutes and can save you significant grief.

If a contractor claims you owe additional money beyond your original contract, this is a common dispute that often involves change orders, scope disputes, or billing disagreements. Review your contract carefully for what you agreed to pay and under what conditions additional charges are allowed. California BPC §7159 requires written authorization for additional work — verbal agreements for extras are much harder for the contractor to enforce. If a contractor is threatening to lien your property over disputed amounts, consult a construction attorney immediately.

Yes. Report unlicensed contractors to both the CSLB and your local District Attorney. Contracting without a license in California is a misdemeanor under Business and Professions Code §7028, punishable by up to six months in jail and a $5,000 fine. The CSLB's Statewide Investigative Fraud Team (SWIFT) specifically investigates unlicensed contractor activity. Reporting unlicensed contractors protects other homeowners from the same fraud.

Walking away without taking action means absorbing your financial losses and potentially leaving the contractor free to harm other homeowners. California has a specific public policy interest in disciplining bad contractors through the CSLB system. Even if you decide not to pursue a lawsuit, filing a CSLB complaint costs nothing and creates a disciplinary record that may result in the contractor's license being suspended. At minimum, document everything and consult with an attorney about your options before deciding to walk away.

Yes. Bay Legal PC, based in Palo Alto, handles construction disputes and contractor fraud cases throughout California — including Los Angeles, San Diego, Sacramento, Fresno, and other California cities. Many matters can be handled remotely. Contact Bay Legal PC for a free initial consultation to discuss your situation regardless of your location within California.

The first thing to do is document everything immediately. Photograph all defects, gather all contracts and receipts, screenshot all texts and emails with the contractor, and write a detailed timeline of events while your memory is fresh. Then, simultaneously: send a written demand letter, file a CSLB complaint, file a bond claim (if the contractor is licensed), and file a police report if money was taken without work being performed. Consult a construction attorney as soon as possible — time limits apply and evidence disappears quickly.