WATER DAMAGE LICENSING QUESTIONS

MUST A WATER DAMAGE COMPANY BE LICENSED?

YES, a Water Damage Company which performs any work over $500 labor and materials which includes either repair, removal, addition, alteration of the existing structure MUST be licensed (per Section 7026 of the California Licensing Code- this reference is under our "Resources" page). So in simple terms YES, 95% of water damage situations will exceed $500 in repairs and will also require removal, addition, repair or alteration of the existing structure. So YES.

WHAT PERCENTAGE OF WATER DAMAGE COMPANIES ARE LICENSED IN NORTHERN CALIFORNIA?

As far as we have found only 5% to 10% are properly licensed!!! To find this out one must simply look in their website, promo materials, business cards, paperwork, etc, for a license number. If there is no license number then the company is not licensed. SIMPLY because the State REQUIRES a licensed contractor to publish their license number on everything.

WHAT PERCENTAGE OF WATER DAMAGE COMPANIES ARE LICENSED IN SOUTHERN CALIFORNIA?

No survey has been conducted in Southern California that we are aware of.

CAN I REFER A RESTORATION COMPANY AS AN INDIVIDUAL?

Absolutely, just make sure that the company you refer is properly licensed, bonded and insured. Then you will be free of all liabilities as the company you have referred is a properly licensed and insured contractor.  

CAN WE REFER A RESTORATION COMPANY AS A COMPANY?

YES absolutely, just make sure that the company your company refers is properly licensed, bonded and insured. Then your company will be free of all liabilities as the company you have referred is a properly licensed and insured contractor.  

IMPORTANT NOTE: If a licensed contractor is caught referring an UNLICENSED contractor, the contractor who referred could lose his licensed and receive a fine from the State. So it is imperative for Licensed Contractors to refer ONLY other licensed contractors.

Insurance Companies and Insurance Agents constantly refer Restoration Companies, Property Managers do so on the daily basis, so do Builders and Plumbing Contractors and Roofers. THE REFERRAL aspect of the business is the most BASIC way to get in touch with a reputable Restoration Company and it is perfectly legal.

IS IT LEGAL TO RECEIVE A FINDER'S FEE IF WE REFER ANOTHER CONTRACTOR?

YES absolutely, in every trade in the world referrals cost money. Referrals from Google, Yellow Pages, existing Customers get incentives from referring family and friends and many more examples. Just make sure your refer a licensed contractor otherwise you could lose your license.

The CSLB does not at any point mention or suggest that finder fees/commissions are an ILLEGAL act between two PROPERLY LICENSED contractors. If you have further questions on this subject you may contact the CSLB or a Construction Lawyer (like we did) or if you would like we can refer you to ours (he is very good).