New construction laws are designed to protect homeowners and compliant contractors
Tuesday, December 28, 2010
Several California construction laws and regulations passed during the 2009-2010 legislative session will take effect January 1, 2011. The new laws include a consumer protection law requiring contractors subcontractors or materials suppliers who intend to file a mechanic’s lien to serve a “Notice of Mechanic’s Lien” on a property owner.
The bill was sponsored by the Contractors State License Board (CSLB), which operates under the California Department of Consumer Affairs. According to the CSLB, homeowners are often unaware that such a lien has even been placed on their property.
CSLB explains that awareness of mechanic’s liens is important even when such liens are not used to foreclose on a property, because a lien’s presence on a title can potentially prevent borrowing against, refinancing or selling a property.
This bill “provides vital protection for California property owners,” said CSLB Registrar Steve Sands.
Under a separate law, which also goes into effect January 1, CSLB will have the authority to issue a “stop work” order to any contractor (licensed or not) who does not carry adequate worker’s compensation coverage for all employees.
This expanded power to stop uninsured construction activity is accompanied by several other related new laws. The penalty for failure to provide adequate worker’s comp insurance will rise from $1000 to $1500 per uncovered employee. Failure to comply with a stop work order will be punishable by up to 60 days in jail and a fine of $10,000. According to CSLB, such regulations are needed to “ensure a level playing field for licensees who follow workers’ compensation laws.”