AB 559: Professions and vocations: contractors: home improvement contracts: prohibited business practices.

Existing law, the Contractors State License Law, defines and regulates the activities of contractors and provides for their licensure, regulation, and discipline by the Contractors State License Board within the Department of Consumer Affairs (department). That law requires a home improvement contract, as defined, to be in writing and include the contract amount, as specified, and prohibits any downpayment for that contract from exceeding the lesser of $1,000 or 10% of the contract amount. Except for a downpayment, existing law prohibits the contractor from requesting or accepting payment that exceeds the value of the work performed or material delivered. Existing law makes the violation of these provisions a misdemeanor punishable by a fine of not less than $100 nor more than $5,000, by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment.

This bill would include in the definition of home improvement construction, erection, installation, replacement, or improvement of accessory dwelling units on residentially zoned property. The bill would also make a licensee, or an unlicensed person, who requests or accepts a downpayment or progress payment for work or services not performed, or for materials or equipment not supplied, that results in financial loss to a consumer in an amount greater than 10% of the contract price violates the above-described downpayment and payment prohibitions subject to revocation of their license and a civil penalty of at least $10,000 in the case of a licensee, or, if the person is unlicensed, subject to a citation and assessment of a civil penalty of at least $10,000.