Overview
Some California HOAs try to save money by hiring outside contractors to perform maintenance, repair, and replacement work on common area components (e.g., roofs, landscaping, plumbing, etc.). Those contractors may enter, cross, or work near individual homes, which creates safety risks and potential liability for both the HOA and its members. Many HOA members happen to be aware of California’s licensing laws, and therefore may wish to receive proof that the contractor hired by the HOA is properly licensed and insured before that contractor enters their property.
While the Davis Stirling Act does not expressly state that homeowners have an explicit right to demand proof of contractor licensing and insurance before work begins, the statutory inspection rights in Civil Code 5200, together with the licensing and Workers’ Compensation requirements in the Business and Professions Code and Labor Code, strongly support a homeowner’s right to request this information in advance. When a contractor’s presence directly affects homeowner safety, liability, or property, these statutes collectively justify a homeowner’s request and provide the legal foundation to “educate” the HOA about why such documentation should be provided upon request before any work commences.
This Fact Sheet explains why homeowners are justified in requesting contractor licensing and insurance information in advance, how the statutes imply this right, and the catastrophic results that could occur if an HOA were to hire unlicensed or uninsured vendors.
Key Points
Homeowners in California HOAs have strong legal support for requesting contractor licensing and insurance information before HOA hired vendors perform work that affects their property. The following points explain where these rights come from and why advance verification protects both owners and their HOAs.
- Civil Code 5200 gives homeowners the right to inspect HOA contracts and insurance policies. Civil Code 5200(a)(4) gives homeowners the right to inspect executed contracts, and Civil Code 5200(a)(11) requires HOAs to turn over records related to insurance. Although the statutes do not expressly state that this information must be given before work begins, these rights support advance requests when the contractor will be on or near the homeowner’s property. For a deeper dive into 5200 demands for HOA records, see an episode of my podcast, HOA HELL, “Your HOA’s Paper Trail: How to Use Civil Code § 5200 to Get Every Document You Need.” If you prefer, you can also read my article on your Civil Code 5200 rights, “Forcing HOA Transparency: The Power of Civil Code § 5200 to Demand Records.”
- California law requires contractor licensing for most non trivial work. Under Business and Professions Code 7048 and 7058(a), any project of $1,000 or more in labor and materials requires a valid contractor’s license, and specialty trades (e.g., roofers, plumbers, electricians, etc.) must hold the proper additional licenses. When the HOA hires a contractor to perform work that requires a license under the Business & Professions Code, homeowners have a strongly implied right to demand proof of a contractor’s licensure and insurance qualifications before the contractor commences work.
- Licensed contractors must carry Workers’ Compensation insurance. Business and Professions Code 7125.1 and 7125.2 require licensed contractors with employees to maintain Workers’ Compensation insurance. This coverage is essential because worker injuries can create significant liability for the HOA (i.e., you and your fellow HOA members) if the contractor lacks proper insurance.
- The penalties for using an unlicensed worker where a license is required are gargantuan. Most people don’t know this, but using an unlicensed contractor makes the HOA the statutory employer. This is a very big deal because Labor Code 2750.5 creates a conclusive presumption that any unlicensed individual performing work that requires a license is an employee of the hirer. In the context of your HOA, that means the association is deemed the worker’s employer if it hires an unlicensed contractor for work requiring a license. And under California law, employers are responsible for the actions (or inactions) of their employees, meaning that your HOA will be liable for all negligence or wrongful actions taken by the unlicensed contractor. [Here’s a real-life example of how that played out in one of this firm’s non-HOA cases. We had a client who owned a large parcel in Northern California. Our client hired someone who he reasonably believed was licensed because he’d hired that contractor previously and had previously checked that contractor’s license status. Our client didn’t know that this contractor’s license had recently lapsed. Unfortunately, our client didn’t check the contractor’s license status at the time of hiring (or he would’ve noticed the lapse). During the course of the work, the contractor burned some trash on the property, and while doing so allowed the fire to get out of control. The fire spread and eventually burned several thousand acres before it could be put out. Cal Fire (i.e., the California Department of Forestry and Fire Protection) sued my client for several million dollars to cover their costs. Their lawsuit contended that my client was liable because he had used an unlicensed contractor, and thus was responsible for the contractor’s negligence (of its employee) on the job. Fortunately, we were able to settle the case without my client being liable for any damages, but only under a technicality that we were lucky to recognize. It could’ve gone very differently.]
- Lack of Workers’ Compensation coverage exposes the HOA to a civil lawsuit. If the HOA is treated as the worker’s employer and does not maintain Workers’ Compensation coverage for that worker, Labor Code 3706 allows the injured worker to file a civil lawsuit against the HOA. [If the work conducted happened to be on your property, there’s an excellent chance that the worker would also name you as a defendant in the lawsuit. While you would have an excellent case for indemnity against your HOA, there’s no guarantee that the HOA would voluntarily step up to indemnify you, and thus there’s a good chance that you’d have to have your insurance company provide you with a defense to force that issue. This would invariably result in a rise in your insurance rates.] Under Labor Code 3708, the HOA is presumed negligent in that lawsuit, and the HOA will not be able to rely on several important traditional defenses (like contributory negligence).
- Together, those statutes strongly support a homeowner’s advance request for documentation. Civil Code 5200 confirms your right to see contracts and insurance records. Business and Professions Code 7048, 7058(a), 7125.1, and 7125.2 require licensing and Workers’ Compensation coverage. Labor Code 2750.5, 3706, and 3708 explain the consequences of using unlicensed or uninsured contractors. When a contractor will be working in or around your property, these statutes strongly support your request to see the contractor’s license and insurance information before work begins.
- Homeowners should request contractor licensing and insurance documents in writing. Because your rights arise from Civil Code 5200, you should send a written request to the HOA or its management company that cites Civil Code 5200 and asks for: (i) the contractor’s full name; (ii) the contractor’s license number; (iii) a copy of the signed contract between the HOA and the contractor; and (iv) certificates of insurance evidencing the contractor’s Workers’ Compensation coverage and Commercial General Liability coverage, ideally naming the HOA as an additional insured.
- If your HOA refuses your request, contact us at MBK Chapman immediately. If your HOA or management refuses to provide copies of the contract or insurance documentation, call us at MBK Chapman. We will insist on compliance with Civil Code 5200 and educate your HOA as to the tremendous liability it faces both for ignoring your valid request, as well as what could happen if it hires an unlicensed (or improperly licensed) contractor.
Understanding these principles allows homeowners to “educate” their HOAs about the importance of verifying contractor licensing and insurance, and to insist on transparency that protects both individual owners and the HOA as a whole.
FAQs
Does the law explicitly say I can demand contractor licensing and insurance information before work starts?
No. The statutes do not expressly mention timing. However, Civil Code 5200 gives you the right to inspect executed contracts and certain insurance records, and the licensing and Workers’ Compensation requirements in the Business and Professions Code and Labor Code make clear why that information matters. Together, they strongly support a homeowner’s right to make an advance request.
Why is contractor licensing so important in an HOA setting?
Under Business and Professions Code 7048 and 7058(a), work at or above the statutory threshold ($1,000 for labor and supplies) requires a licensed contractor. If the contractor is unlicensed, Labor Code 2750.5 treats the worker as an employee of the hirer. For an HOA, that means the association may be considered the employer for liability purposes, and employers are generally liable for injuries or harm caused by their employees.
What happens if an unlicensed or uninsured worker is injured while working for the HOA?
If the HOA is treated as the worker’s employer and does not carry Workers’ Compensation coverage for that worker, Labor Code 3706 allows the worker to sue the HOA (and very likely you) in civil court. Labor Code 3708 presumes the HOA negligent in that lawsuit and prohibits the HOA from relying on normal defenses, such as contributory negligence. This makes it much harder for the HOA to overcome the presumption and defend itself. That means that the homeowners will be on the hook for damages not covered by the HOA’s insurance (if coverage even exists for this type of wrong).
What specific documents should I request from the HOA or management?
You should request the contractor’s full name and license number, a copy of the executed contract between the HOA and the contractor, and certificates of insurance showing Workers’ Compensation and Commercial General Liability coverage held by the contractor. These records confirm compliance with licensing and insurance requirements.
How do I invoke my right to see my HOA's documents?
Submit a written request that cites Civil Code 5200 and asks to inspect or receive copies of the contractor’s contract and relevant insurance records. Keeping your request in writing creates a clear record of your efforts to obtain this information. Read my article (I provided the link above) for guidance on how to make a proper 5200 demand.
What should I do if the board or management refuses to provide the contractor-related documents?
If your written request is ignored or denied, you should contact my firm, MBK Chapman. Our attorneys are experts in these issues, and we’ll make a formal demand on your behalf, as well as advise you on next steps to protect your interests.
About MBK Chapman Fact Sheets
Homeowners searching for answers online will often come across articles that appear authoritative, but are actually written as search-engine marketing content rather than by an experienced HOA lawyer. These pieces tend to prioritize keyword density over clarity, accuracy, or legal context, which often leaves homeowners more confused than informed.
At MBK Chapman, our Fact Sheets are part of our HOA Law Library and are written by Michael Kushner, an HOA lawyer with decades of hands-on experience representing California homeowners. In fact, Michael Kushner is the HOA lawyer who pioneered the systems and strategies used by some of California’s most successful homeowner-side HOA law firms.
Each Fact Sheet is deliberately concise, statute-based, and designed as a quick-reference guide to help homeowners understand key HOA laws and enforcement rules at a glance.
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