Business and Professions Code Section 7068.1 specifically states that the person qualifying on behalf of an individual or firm shall be responsible for exercising that direct supervision and control of his or her employer’s or principal’s construction operations. If you are offered a monthly fee, asked to serve as the qualifier for someone else’s license and told that you don’t have to be concerned or involved in the everyday business operations – run like crazy! This is completely illegal and should you get caught, you could face misdemeanor criminal charges punishable by fines of $3,000.00 to $5,000.00 or up to six months in jail.
Remember the slimy crook in Ventura County who was finally indicted for money laundering, grand theft, and theft from an elder? This deceitful criminal oversaw a fraudulent remodeling and home improvement scheme under the names AMCO, Liberty Construction, Universal Remodeling, VIP Home Design and Vista Home Improvements. These shell companies paid small monthly fees to legitimate contractors to use their licenses but these legitimate contractors had virtually nothing to do with the sloppy remodeling work performed by these offenders. Either they had no contractor’s license or their license was revoked. They defrauded millions of dollars from thousands of Southern California customers. It was also reported that these lawbreakers were actually trained on how to take advantage of consumers, especially the elderly.
Bottom line – when you are the qualifier for a license, it is essential that you have direct supervision and control of all business activities. Remember that California contractors cannot act as a qualifier for an additional individual or firm unless there is a common ownership of at least 20 percent. A qualifying individual can be the qualifier for not more than three firms in any one-year period.