Contractor bond increases January 1, 2016 in California

Words: Julie TrostCalifornia law (Business and Professions Code Section 7071.6) requires all contractors to have either a contractor’s bond or cash deposit filed with the Contractors State License Board (CSLB). The bond or cash deposit is filed for the benefit of consumers who may be damaged as a result of defective construction or other license law violations, and for the benefit of employees who have not been paid wages that are due to them.

On January 1, 2016, the amount of the bond is increasing from $12,500 to $15,000. CSLB urges all contractors to make sure they’ve got their new bond or cash deposit in-place by that date.

Contractors who don’t meet the deadline risk having their license suspended.

If you haven’t been informed about the new $15,000 limit by your bond company, it’s important that you contact them immediately, so you can comply with the new law. Note that the bond of qualifying individuals will remain at $12,500.

Recently passed legislation (Senate Bill 467) raised the contractor bond required of all licensees from $12,500 to $15,000 at the start of the new year. The legislation also eliminated the requirement that contractor applicants prove they have $2,500 in working capital as a condition of obtaining a CSLB license.
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