Unlicensed Contractors in California: What You Can Recover—and Why You Should Act Fast

Unlicensed Contractors in California - homeowners can recover payments, pursue damages, and hold violators accountable under state law.

If you’re a homeowner or property owner in California, hiring a contractor without a license could cost you thousands. At SARI LAW FIRM, we’ve seen many clients fall victim to individuals who claimed to be contractors—only to find out mid-project (or worse, after damage was done) that they were never licensed to perform the work.

Fortunately, California law protects homeowners and property owners. If you’ve been wronged by an unlicensed contractor, this article outlines the legal remedies available to help you recover your money, repair the damage, and in some cases, pursue criminal penalties.

California Law Takes Unlicensed Contracting Seriously

Under California Business & Professions Code, anyone performing work costing over $500 (labor and materials included) must have a valid contractor’s license. If not, the law offers you powerful protections—even if the work was partially completed.

Let’s break this down.

1. Full Repayment (Disgorgement) — B&P Code § 7031

This is one of the most powerful remedies available.

If a contractor was unlicensed at any time during the project, they are not entitled to keep any payment, even if they completed some or most of the work.

This legal remedy is called “disgorgement.”

You can recover 100% of what you paid, regardless of whether the job was partially or even competently done.

🕒 Time-Sensitive: You must bring this claim within one year from project completion.

2. Treble (Triple) Damages — Code of Civil Procedure § 1029.8

If the contractor’s actions resulted in property damage or injury, you may be eligible to receive three times the amount of your actual damages.

Example: If the damage was worth $3,000, you could recover $9,000 + attorney’s fees.

3. Criminal Penalties — B&P Code § 7028

In California, contracting without a license is a criminal offense:

• First offense: Up to 6 months in jail or a $5,000 fine

• Second offense: $5,000+ fine or 20% of the contract value, plus at least 90 days in jail

• Third offense: Up to 1 year in jail and $10,000 in fines

If the contractor has prior violations, they may be facing serious legal consequences.

4. False Advertising & Fake License Numbers

Contractor fraud often includes false license claims or misuse of someone else’s license number:

• Advertising without license: $700–$1,000 fine

• Using a fake or borrowed license: Up to $10,000 fine + 1 year in jail

These are criminal acts and may strengthen your civil claims.

5. Permit Fraud — B&P § 7031.5 & Health & Safety Code § 19825

If an unlicensed contractor applied for a permit or falsely claimed exemption from licensing, they could face civil penalties up to $500. While not as severe as disgorgement, this detail could bolster your case.

6. CSLB Administrative Fines

The Contractors State License Board (CSLB) can issue civil fines, including $200 per day per unlicensed worker. This administrative route can add pressure and increase leverage in your case.

Other Legal Claims You Might Have Against an Unlicensed Contractor

Besides the statutory remedies, you may also pursue common law claims such as:

Claim	What You Can Recover	Why It Applies
Breach of Contract	Cost to fix or complete the job	You can still sue even if they can’t enforce the contract
Negligence	Property damage, injuries, lost use	For unsafe, careless, or defective work
Fraud	Full refund, rescission, punitive damages	If they lied about licensing or concealed issues
Theft / Conversion	Value of stolen money or materials	When they disappear with your funds

What Should You Do Right Now?

To protect your rights after hiring an unlicensed contractor in California:

✅ Verify the License

Use the CSLB license lookup tool before hiring anyone.

✅ Get It in Writing

Always insist on written contracts and change orders. They strengthen your legal position.

✅ Document Everything

Save texts, emails, receipts, and take photos. This will be crucial if legal action becomes necessary.

✅ Speak to an Attorney ASAP

Legal deadlines apply—such as one year for disgorgement. An attorney can help preserve your rights, gather evidence, and build your case.

Conclusion: California Doesn’t Mess Around With Unlicensed Contractors

Hiring an unlicensed contractor can be stressful—but California construction law is on your side. You may be able to:

• Recover 100% of your money

• Win triple damages

• Get attorney’s fees paid

• Sue for fraud, negligence, or theft

• Push for criminal prosecution

At SARI LAW FIRM, we help homeowners and property owners across California hold unlicensed contractors accountable.

📞 Contact us today to schedule your free consultation.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed California attorney to discuss the facts of your specific case.