There is no doubt that our national economy relies heavily on e-commerce. This is true with regard to contractors in California as well. As individuals and businesses look for quality builders, trades and services in the construction field, they look for sources of on-line information to evaluate whom to hire. Would you think that an on-line referral service is a “contractor” under California law? According to the CSLB, the answer may surprise you with a “maybe.” Again, the same rules that have always applied in evaluating the question of who is a “contractor” – even if the person never lifts the proverbial hammer – still apply to those representing that they can find the best contractor resource for you. Bottom line, if you are in the referral business (or use the services of a referral business), don’t cross that line.
It’s important to remember that a referral service cannot solicit or negotiate contracts on behalf of a contractor, or offer to undertake to, or purport to have the capacity to undertake itself or through others a construction project (BPC § 7026).
A referral service may serve as a repository for licensed contractors and provide contractor contact information to prospective customers. However, to avoid allegations of unlicensed activity, the prospective customer should enter into a contract directly with the licensed contractor and make payments directly to that licensed contractor.
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