Business & Professions Code §7031 is widely recognized by Construction Attorneys and litigants as a shield to prevent compensation of an unlicensed or improperly licensed contractor. It’s sharper edge is increasingly being used as a sword to require the disgorgement of all compensation paid to a contractor who was not properly licensed at all times during performance of the work of improvement. Being not properly licensed can range from not having a license, to temporary suspension, to being licensed in the wrong classification as a result of an automatic suspension for not having workers comp. I recently obtained a mid six figure recovery by way of a disgorgement claim for one of our clients, my third such recovery and I have several more “sword” claims pending.
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