Hired an Unlicensed Contractor in California - Can I Get ALL My Money Back? (B&P 7031)

I hired a contractor to remodel my kitchen in Riverside County. Paid him $15,000 total - $5K deposit upfront, then $10K as work progressed. He finished about 80% of the job but the work quality is honestly pretty decent.

Here's the thing - I just found out he's NOT LICENSED. I was looking up his info to leave a review and discovered his license expired 2 years ago. He never mentioned this and his business cards still show a license number.

My neighbor is a paralegal and mentioned something called "B&P 7031" that supposedly lets me get ALL my money back even if the work was done properly. Is this real? Can I actually sue an unlicensed contractor and get a full refund in California?

What about the fact that he did complete most of the work? Does that matter?

Your neighbor is correct, and B&P 7031 is one of the most powerful consumer protection statutes in California. Let me explain how it works:

California Business & Professions Code Section 7031 states that an unlicensed contractor cannot sue to collect payment AND - this is the key part - the homeowner can recover ALL compensation paid to the unlicensed contractor.

Here's what makes this statute so powerful:

• The quality of work is IRRELEVANT - even if the work was perfect, you can still recover everything
• Completion percentage doesn't matter - 10% done or 99% done, same result
• The contractor cannot use "substantial compliance" as a defense
• The burden shifts to the contractor to prove they were properly licensed at ALL times during the project

The legal standard from MW Erectors v. Niederhauser (2005): "Section 7031 represents a legislative determination that the importance of deterring unlicensed persons from engaging in the contracting business outweighs any harshness between the parties."

In plain English: the courts have said protecting consumers from unlicensed contractors is MORE important than whether the unlicensed contractor loses money. It's deliberately harsh to discourage unlicensed work.

Based on what you've described, you likely have a strong case to recover the full $15,000.

I actually went through this exact situation last year and won. Let me share my experience to give you hope.

My situation: Hired a guy to do a bathroom and laundry room remodel. Paid him $22,000 over 3 months. Work was about 90% complete and looked fine. Then I discovered through CSLB that his license had been suspended for not having workers comp insurance.

What I did:

1. Printed the CSLB license verification showing suspension dates
2. Gathered all receipts, canceled checks, and Venmo records
3. Sent a formal demand letter citing B&P 7031 giving him 30 days
4. When he didn't respond, filed in small claims (was under $12,500 limit at the time)

The hearing: He showed up and argued that he did good work and it wasn't fair. The judge literally said "the quality of work is not a defense under 7031" and ruled in my favor for the full amount.

Getting him to actually pay was another challenge - had to do wage garnishment - but I eventually collected every penny. The whole process took about 8 months from discovery to final payment.

Your $15K is within small claims limits now ($12,500 increased to $12,500 but you can waive the excess or sue in limited civil). This law really does work.

Before you proceed, make absolutely sure about the license status. Here's how to verify properly:

CSLB License Lookup:

• Go to CSLB License Check
• Search by license number, business name, or personal name
• Look at the "License Status" - needs to say "Active" and "Current"
• Check the "History" section for any gaps in licensure
• Verify the license classification covers your type of work (B for general, C-xx for specialty)

Important details to capture:

• Screenshot the CSLB page with timestamp
• Note the exact dates the license was expired or suspended
• Print the "Personnel" section showing who the license actually belongs to
• Check if there's a bond on file (separate from license status)

Also worth noting - if the contractor had an active license but was working outside their classification (like a C-15 flooring contractor doing electrical work), that can also trigger 7031 protections.

The CSLB website is actually really good. Print everything before you contact the contractor because records can change.

Good points from @PropertyVerify_Dan. Let me add some important information about exceptions and potential defenses, because contractors and their attorneys will try these:

Defenses that DON'T work under B&P 7031:

• "I did good work" - Not a defense
• "The homeowner knew I was unlicensed" - Generally not a defense
• "I was only unlicensed for part of the project" - Must be licensed for ENTIRE duration
• "The project was under $500" - Threshold is actually very low and rarely applies to real construction
• "I'm a handyman" - Handyman exemption only applies to jobs under $500 total including labor AND materials

The ONE defense that might work - "Substantial Compliance":

Under B&P 7031(e), a contractor MAY be able to offset the disgorgement IF they can prove ALL of the following:

1. They were licensed at some point during the project
2. They acted reasonably and in good faith believing they were licensed
3. The failure to maintain license was not willful
4. The customer would be unjustly enriched if no offset allowed

This is a VERY high bar. In your case, OP, where the license expired 2 YEARS ago and he's still using the license number on business cards, this defense will almost certainly fail. That looks willful.

One more thing: File a complaint with CSLB as well. They take unlicensed contracting seriously and can pursue criminal charges, which gives you leverage in settlement negotiations.

Since @KitchenReno_Triumph mentioned small claims, let me walk through the step-by-step process since I've helped several friends with B&P 7031 cases:

Step 1: Document Everything First

• CSLB license verification printout (with dates)
• Your contract (if written) or text messages discussing the job
• All payment records - checks, Venmo, Zelle, cash withdrawal receipts
• Photos of any business cards or ads showing the license number
• Timeline of when work was performed

Step 2: Send Demand Letter

• Cite B&P 7031 specifically
• State the total amount paid
• Give 30 days to respond
• Send via certified mail AND regular mail
• Keep copies of everything

Step 3: File Small Claims (if no response)

• California small claims limit is $12,500 ($6,250 for businesses)
• For $15K, you can either: waive $2,500 and file small claims, OR file in Limited Civil Court (under $25K)
• Filing fee is around $75-100 depending on amount
• Must file in county where contractor lives/works OR where work was performed

Step 4: The Hearing

• Bring organized copies of everything - judge loves organized plaintiffs
• Lead with the CSLB printout showing unlicensed status
• Explain B&P 7031 briefly - some judges know it well, some don't
• Show payment records
• Request full disgorgement

Most B&P 7031 cases are slam dunks if you have your documentation together. The law is very clear and judges follow it consistently.

UPDATE: Wanted to follow up because this thread was incredibly helpful.

I verified on CSLB - his license expired January 2023 and was never renewed. He started my project in September 2023. I printed everything and sent the demand letter using the template @Rachel_ConstructionLaw linked.

Within a week of receiving the letter, he called me PANICKING. He said he "didn't realize" his license had lapsed (yeah right - 2 years?). He offered to return $8,000 which I rejected.

Long story short: after I mentioned I was filing with CSLB and small claims, he agreed to return the full $15,000 in two payments. Got a cashier's check for $10K already, second one due in 2 weeks.

This law is incredible. I felt so helpless when I discovered this and now I'm getting everything back. Thank you all so much for the detailed explanations. For anyone else in this situation - B&P 7031 is absolutely real and it works.

Now I just need to find a LICENSED contractor to finish the last 20% of my kitchen...