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| LAW BITS - A collection brief legal notes on California law, some of which may have been previously posted on our Home Page. Update... Law Bits has essentially been replaced by our blog: Law Blog Legal Note on Cal-Trans Barred from Withholding Retention under Public Contracts Code § 7202
California Contractors – a newly enacted law has barred the Department of Transportation / Cal-Trans from withholding retention from progress payments for contractors working on transportation projects. This was enacted by former Senate Bill 593 which became Public Contracts Code Section 7202.
The bill did not change Public Contracts Code Section 7200 which stated a general contractor could not withhold more than the retention percentage stated in its prime contract from each subcontractor, except when the solicitation of bids requires subcontractor bonding and the bond is refused to be given or is not issued by an admitted surety. Unless this bonding exception applies, then as a result under the new Section 7202 a general contractor cannot withhold retention on progress payments from its subcontractors, since retention is no longer being so withheld by Cal-Trans.
This new law took effect on January 1, 2009, and will be repealed on January 1, 2014 unless renewed or extended by law. This new provision will likely require revisions to the standard subcontract forms that general contractors are using for Cal-Trans projects. If you have any questions on the application of this new law as a contractor or subcontractor, please consult with an experienced construction attorney.
All Rights Reserved © 2009 by Michael L. Mau, Esq. The Mau Law Firm www.MauLaw.com Legal Note on Real Estate Law – 2008 Notary Acknowledgements
Beginning January 1, 2008, some little known changes occurred to the law governing Notary Acknowledgments. Notaries will no longer be allowed to attest on a notary acknowledgment based on his or her personal knowledge alone, where previously this was allowed. Instead, the notary acknowledgment must identify the person signing the instrument to which the notary is attached, based on satisfactory evidence. Typically this is based on government issued documents. For example, in this state a California driver’s license or California identification card, or a federal document such as a United States Passport, would typically suffice. Notaries in violation of the law can be subject to civil penalties. In addition, the notary acknowledgment must now be signed under penalty of perjury. For complete details on this change in the law, and the exact language necessary, please see Civil Code Section 1189.
Please consult with an experienced real estate attorney if you are involved in a claim as a buyer - seller, broker - agent, notary or other involved party.
All Rights Reserved © 2008
by Michael L. Mau, Esq.
The Mau Law Firm
www.MauLaw.com Legal Note on Civil Code § 2782(e) – Residential Contractor Indemnity Residential construction contracts that would indicate a general contractor or subcontractor is to be held harmless for construction defects are now legally unenforceable as of January 1, 2008. This new law amended Civil Code Section 2782, adding subpart (e), and voided such clauses in residential construction contracts or amendments to contracts, as against public policy. As an example, on many subcontracts a clause may exists which requires the subcontractor to defend and indemnify the general contractor for construction defect claims, even when the claims arise out of the negligence of the general contractor or its other subcontractors. Such clauses would now be void as a matter of law, for any new residential construction contracts entered into after January 1, 2008. The law is not retroactive, however, so such clauses in pre-2008 residential construction contracts or amendments are not automatically void under this new law. C.C. § 2782(e). Please consult with an experienced construction attorney if you are involved in a claim as a contractor or a consumer. All Rights Reserved © 2008 by Michael L. Mau, Esq. The Mau Law Firm www.MauLaw.com
Legal Note on B&P Code § 7114 – Contractor’s License Laws
California Contractors – be warned on letting others use your contractor’s license. Under existing Business & Professions Code Section 7114(a), the Contractor’s State License Board (“CSLB”) can issue a citation or initiate disciplinary proceedings against a licensed contractor who allows an unlicensed person to use his license. Generally, this is intended to prevent the improper use of a contractor’s license, such as to evade the licensing requirement. Section 7114(b) was newly added in 2007, to also allow the CSLB to order a licensee to pay an injured party, including payment for any injury caused by the unlicensed person. In this fashion, a licensed contractor not only faces administrative penalties but now faces the potential of paying a monetary fine to an injured consumer. B&P § 7114. Please consult with an experienced construction attorney if you are involved in a claim as a contractor or a consumer.
All Rights Reserved © 2007
by Michael L. Mau, Esq.
The Mau Law Firm
www.MauLaw.com Legal Note on Contractor’s License Bonds
California Contractors – is your license bond up to date? On January 1, 2007, license bonds increased to $12,500.00. B&P Code § 7071.6. Call your agent or surety and ensure compliance. The full penal sum of the bond may be available to certain homeowners who have been damaged by a violation of the state license laws, while $7,500.00 may be available to others for willful and deliberate violations, employees for back wages, or trust funds for fringe benefits. B&P Code § 7071.5. Please consult with an experienced construction attorney to pursue or defend a claim.
All Rights Reserved © 2007
by Michael L. Mau, Esq.
The Mau Law Firm
www.MauLaw.com
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