California law deters unlicensed building contractors by (a) preventing them from bringing a claim for compensation for work performed that required a license, and (b) allowing any person who used the unlicensed person’s services to sue for all amounts paid, regardless of the contractor’s fault or whether the person was unjustly enriched by the contractor’s work.

In the recent case of Los Angeles County, Eisenberg Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction Company, Inc. the California Appellate Court determined that a disgorgement claim against an unlicensed contractor must be brought within one year of its accrual. The Court held the disgorgement claims accrues “at the time when the cause of action is complete with all of its elements.”

The Court also determined that an equitable ‘discovery rule’, where the statute of limitations only runs from when a diligent plaintiff knew or should have known about the claim, does not apply.

It is now more important to make proper and required licensing an essential and continuing term, and prerequisite condition, to any contract to obtain the longer statute of limitations for fraud, breach of contract, or other claims. Also. If you paid an unlicensed contractor who performed work on your property it is imperative that you immediately contact your attorney if you want your money back.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.