Roofing Contractor Abandoned Your Project Mid-Construction?

Recovery Options for Abandoned Roofing Projects

1. Contractor's License Bond ($25,000)

Every licensed California contractor must maintain a $25,000 bond. You can file a claim against this bond for abandonment violations.

• Look up the contractor's bond company via CSLB
• File a claim directly with the bonding company
• Bond claims can be filed while also pursuing other remedies

2. CSLB Complaint

File a complaint with the Contractors State License Board. CSLB can:

• Investigate the contractor
• Facilitate restitution
• Suspend or revoke the license
• Refer for criminal prosecution in egregious cases

3. Small Claims Court (Up to $12,500)

For claims up to $12,500, small claims court is fast and doesn't require an attorney. You can often get a hearing within 30-70 days.

4. Civil Litigation

For larger claims, civil court allows full discovery, depositions, and recovery of attorney fees in many contractor cases under Civil Code § 1029.

5. Homeowner's Insurance

Your homeowner's policy may cover some water damage. However, the insurer may subrogate (pursue the contractor for reimbursement), and you'll still need to recover your deductible and any uncovered losses.

When Contractors Hide Behind New LLCs

It's a common pattern: a contractor accumulates debts and unhappy customers, then "closes" their company and opens a new one. California law provides several theories to pierce this corporate shield:

1. Alter Ego Doctrine

If the contractor treated the company as their personal piggy bank (no separation between personal and business finances), the corporate veil can be pierced to hold them personally liable.

Evidence to gather:

• Commingling of funds (personal expenses paid from business account)
• Failure to maintain corporate formalities
• Undercapitalization
• Using the entity as a "mere shell"

2. Successor Liability

A new company may be liable for the old company's debts if:

• Express or implied assumption of liabilities
• Mere continuation of the old entity (same employees, equipment, customers, phone numbers)
• Fraudulent purpose to escape debts
• The new entity is just a "continuation" in a different form

3. Individual License Holder Liability

Under B&P Code § 7068.1, the "qualifier" (license holder) must exercise direct supervision and control. Personal liability may attach for violations committed under their license.

4. Fraudulent Transfer

If the contractor transferred assets to a new entity or to family members to avoid paying you, California's Uniform Voidable Transactions Act allows you to pursue those assets.

Frequently Asked Questions

How long do I have to file a claim?

The statute of limitations depends on the claim type:

• Written contract breach: 4 years from breach
• Property damage: 3 years from discovery of damage
• CSLB complaint: Generally 4 years
• Mechanics lien release: 90 days from cessation of work

Should I pay the supplier liens?

This is situation-dependent. If liens are filed, they can lead to foreclosure. Paying to release the lien protects your property, and you can then recover those payments from the contractor as damages. However, you should also consider contesting invalid liens or posting a release bond. Consult an attorney if significant amounts are at stake.

What if the contractor claims they went bankrupt?

First, verify whether a bankruptcy was actually filed (check PACER). If bankruptcy is pending, an automatic stay prevents collection, but you can file a proof of claim. If no bankruptcy is filed, "I'm broke" is not a legal defense - you can still pursue the contractor, their bond, and potentially successor entities.

Can I get attorney fees if I sue?

California Civil Code § 1029 provides for attorney fees in contractor cases involving willful violations. Many contracts also contain attorney fee provisions. This makes contingency arrangements possible for strong cases.

What if my damages exceed the $25,000 bond?

You can pursue multiple remedies: the bond, personal liability through alter ego, the new LLC through successor liability, homeowner's insurance, and direct suit against the contractor. An attorney can help identify all available recovery sources.

Should I send the demand letter via certified mail?

Yes. Certified mail with return receipt requested provides proof of delivery, which is important for later litigation. Also send via email if you have the contractor's email address.