Here's the uncomfortable truth: as an RMO, you're responsible for the contractor's work even if you never visit the job site. California law makes the qualifier jointly liable with the contractor for the contractor's construction operations.
This guide explains how that liability actually works in practice—and what you can do to protect yourself.
Under California Business & Professions Code § 7068.1, the RMO/RME is "responsible for exercising that direct supervision and control of his or her employer's or principal's construction operations as is necessary to secure full compliance with the provisions of this chapter."
This creates two types of liability:
- CSLB Administrative Liability - Your personal contractor's license can be suspended or revoked based on the contractor's actions
- Civil Liability - You can be sued personally for damages caused by the contractor's work
The law doesn't require that you actually caused the problem—only that you were the qualifier when it happened. Your role creates vicarious liability.
| Issue | Contractor | RMO | Notes |
|---|---|---|---|
| Construction defects | Primary | Joint | Both can be named in lawsuits |
| CSLB license discipline | Yes | Yes | Both licenses at risk |
| Consumer complaints | Primary | Secondary | RMO named if contractor doesn't resolve |
| Contract disputes | Primary | Usually not | Unless RMO signed the contract |
| Worker injuries | Primary | Possible | If safety oversight was RMO's duty |
| Permit violations | Yes | Yes | Both responsible for compliance |
| Unlicensed work | Yes | Yes | RMO should have prevented it |
Contractor builds a deck that collapses two years later. Homeowner sues for $150,000 in damages. Contractor has no insurance and limited assets.
Result for RMO: Plaintiff's attorney names the RMO as a defendant. Since the contractor can't pay, judgment collection focuses on the RMO. The RMO's personal assets—home, savings, future income—are now at risk.
- Require contractor to maintain adequate GL insurance ($1M+)
- Be named as additional insured on contractor's policy
- Include indemnification in your RMO agreement
- Consider your own professional liability coverage
Homeowner files CSLB complaint. Investigation reveals contractor performed work without required permits on multiple projects. RMO had no idea about the permit issues.
Result for RMO: CSLB issues citations to both the contractor's license AND the RMO's personal license. The RMO's defense that they "didn't know" fails because they had a duty to supervise. RMO faces license suspension.
- Require contractor to report all projects and permits
- Conduct periodic audits of permit status
- Document your oversight activities
- Include immediate termination right for permit violations
Contractor takes $50,000 deposit, does minimal work, then disappears. Multiple homeowners file complaints. Some file bond claims, exceeding the $25,000 bond.
Result for RMO: CSLB revokes both licenses. Homeowners sue the RMO personally for fraud by association. RMO's argument that they didn't receive any of the money doesn't matter—they enabled the contractor to operate.
- Vet contractors thoroughly before qualifying them
- Monitor for warning signs (complaints, slow payments)
- Include right to terminate immediately for customer complaints
- Don't qualify contractors you don't trust
CSLB can take action against your personal license based on the contractor's conduct:
- Letter of Admonishment - Warning for minor issues (no public record)
- Citation - Civil penalty up to $15,000 per violation
- Suspension - License suspended for specified period
- Revocation - License revoked (can reapply after specified period)
- Probation - License continues with conditions
Discipline against your personal license follows you—even if you stop qualifying the problem contractor and qualify someone else later.
- Consumer complaints (most common)
- Bond claims
- Referrals from other agencies (building departments, DA)
- Sting operations
- Failure to resolve arbitration awards
- Criminal convictions
- Workers' comp insurance lapses
CSLB automatically notifies the RMO when complaints are filed against the contractor's license. If you receive this notice and take no action, it demonstrates lack of oversight.
Plaintiffs' attorneys know to name RMOs in construction defect cases. Common theories:
- Negligent supervision - RMO failed to adequately oversee contractor's work
- Negligent hiring/retention - RMO qualified an incompetent contractor
- Joint venture/partnership - RMO was partner in the construction business
- Agency - Contractor was acting as RMO's agent
Even if these theories are weak, defending against them is expensive. And if the contractor has no money or insurance, you're the only viable defendant.
- Cost of repair - What it costs to fix the defective work
- Diminution in value - If property is worth less even after repair
- Relocation costs - If homeowner had to move during repairs
- Personal injury - If someone was hurt due to defective work
- Attorney fees - In some cases, prevailing party gets fees
- Punitive damages - For fraud or malice (rare but possible)
Construction defect cases commonly result in six-figure judgments. Major structural issues can exceed $500,000.
- Indemnification - Contractor must indemnify RMO for construction defects
- Defense obligation - Contractor must pay RMO's legal defense costs
- Insurance requirements - Minimum coverage with RMO as additional insured
- Liability cap - Limit RMO's exposure to insurance coverage amount
- Termination rights - Ability to exit immediately when problems arise
Contractual protections only work if the contractor can pay. If the contractor is judgment-proof, your indemnification right is worthless. That's why insurance is critical.
Minimum insurance you should require from the contractor:
- General Liability - $1M per occurrence, $2M aggregate minimum
- Workers' Compensation - Statutory limits (if contractor has employees)
- Auto Liability - $1M combined single limit
- Umbrella/Excess - Consider requiring for larger contractors
Critical provisions:
- RMO named as Additional Insured
- 30-day cancellation notice to RMO
- Waiver of subrogation in favor of RMO
- Primary and non-contributory language
- Vet contractors carefully - Check CSLB history, references, and financials before qualifying
- Limit arrangements - Don't qualify more contractors than you can actually supervise
- Document everything - Keep records of site visits, reports, and communications
- Monitor actively - Check CSLB public records for complaints monthly
- Act on red flags - If you see problems, address them immediately or terminate
- Keep insurance current - Verify contractor insurance annually
The best protection is choosing the right contractor to qualify in the first place. No contract provision can fully protect you from a bad actor.