We have previously blogged about the introduction of SB 822 by the California Legislature earlier this year. SB 822, in part, clarifies recent amendments to the California Business and Professions Code relating to “contractors” whom are required to be licensed by the state. The clarifying language was introduced in the wake of the confusion and concern that had surfaced regarding whether community association (“HOA”) managers were required to hold a contractor’s license in order to perform common tasks such as obtaining bids and overseeing the progress of ongoing construction work.
Thanks to the efforts of CAI’s California Legislative Action Committee (“CLAC”), SB 822 was recently signed into law by Governor Brown and will take effect January 1, 2014. SB 822 adds the following provision to Section 7026.1(b) of the Cal. Bus. & Prof. Code:
“The term “contractor” or “consultant” does not include a common interest development manager, as defined in Section 11501, and a common interest development manager is not required to have a contractor’s license when performing management services, as defined in subdivision (d) of Section 11500.”
However, this does not mean that HOA managers should interpret this language as a “green light” to act as de facto construction managers. Doing so could expose the HOA, the manager and the management company to liability in the event a construction project goes south. How then can a HOA manager and Board avoid this problem without having to hire an independent construction manager for every project?…