General contractors and subcontractors must pay close attention to their licensure status with the Contractors State License Board.

Even seemingly trivial lapses in a license could nonetheless make the unsuspecting contractor liable for millions of dollars in damages.

California has an intentionally punitive licensing statute when it comes to contractors. To promote compliance with the licensing statutes and to prevent fly-by-night, unlicensed contractors from taking advantage of consumers, California's Contractor's License Law ("CLL") requires that a contractor be licensed at the start of any job and throughout that job.

In the event of a lawsuit regarding any aspect of the contractor's work, including payment for work, it is a contractor's burden to prove that it was licensed at the start of and during the entirety of a project. An aggrieved builder or owner can ask for an evidentiary hearing at the outset of trial to establish whether the contractor has met the burden of proving full licensure. The contractor must, at a minimum, produce a certified copy of its licensing history showing compliance with the CLL during the project. Failure to meet this burden bars any affirmative recovery by the contractor.