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N Cal Attorney
N Cal Attorney, Attorney
Category: Business Law
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Experience:  Since 1983
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CA business attorney please. I own an real estate investment

Resolved Question:

CA business attorney please.
I own an real estate investment C-corp to flip residential houses (buy, hold title, fix, sell under the name of the company). I have a friend who just bought an apartment. Because he doesn't know much about construction, he wants me to design and oversee the remodeling project on the apartment. I am not a contractor although I have worked with many of them. My friend insists on paying me a small amount (like a few hundred dollars) for gas/parking/lunch. I still have not decided how to book this income. One way to do it is I hire the contractors out of my company's name and then bill all expenses to my friend. This way, my company is kind of like a general contractor. Since I don't have any construction license, is it legal for me to do the project this way? If it's ok, what are the pitfalls? For one thing, i know it's illegal for an unlicensed contractor to do public advertisement in CA.
Submitted: 6 years ago.
Category: Business Law
Expert:  N Cal Attorney replied 6 years ago.
Why not just draw up the plans and have him hire his own contractor?
Customer: replied 6 years ago.
It's because he has no background with construction and remodeling. He wants me to interact with the contractors.
Expert:  N Cal Attorney replied 6 years ago.
You could suggest that he hire a general contractor and have you as his agent act as your friend's construction supervisor/liaison. That way there is a licensed contractor in the picture and I do not believe you would need to be licensed under that scenario.

California has a very broad definition of "contractor", see

You could not do the project yourself without becoming licensed.

I hope this information is helpful.
Customer: replied 6 years ago.
Somewhere i read it's legal for the home owner to hire unlicensed contractor to perform construction work. On the other hand, it's illegal for the unlicensed contractor to do any contract work. Could you confirm this?

If the above is true, in my case above, my friend (owner) will be protected while i (the unlicensed guy) will get into trouble for doing contract work. Right?
Expert:  N Cal Attorney replied 6 years ago.
An owner who hires an unlicensed contractor is not violating the penal code but the unlicensed contractor he hires can be prosecuted, and can be sued for a 100% refund even if he did perfect work and the owner knew he was unlicensed.

I think trying to accommodate his desires may destroy your friendship, and your life would obviously be easier if he just hires a licensed contractor.

Yes, you can get in trouble, there is no guarantee of payment, it promises to be a huge headache and a strain on your friendship.

You can do the designs without a license and if the engineers approve them the building permit will issue hopefully in the name of a licensed contractor you can have informal oversight of just to make sure the plans are bring followed. But you cannot built or agree to build or have your employers build or remodel any structure unless you own it.
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Expert:  N Cal Attorney replied 6 years ago.
Thank you for accepting my answer.