Getting a Refund From an Unlicensed Contractor in California

Can you get your money back from an unlicensed contractor?

Yes, when the work required a license. Section 7031(b) of the Business and Professions Code says a person who uses the services of an unlicensed contractor may sue in any California court with jurisdiction to recover all compensation paid to the unlicensed contractor for performance of any act or contract. The statute does not limit the refund to defective work or unfinished work.

The same section works against the contractor in two more ways:

• No lawsuit to collect. An unlicensed contractor cannot sue to be paid for licensed work without alleging it was duly licensed at all times during the work, regardless of the merits of its claim (section 7031(a)).
• No enforceable security interest. A security interest taken to secure payment for that work is unenforceable if the contractor was unlicensed at any point during the work (section 7031(c)).

There is a narrow safety valve. A court may find substantial compliance only if the contractor had been licensed in California before the work, acted reasonably and in good faith to keep the license, and acted promptly to fix the lapse. That doctrine never applies to someone who was never licensed in California (section 7031(e)).

How to check whether your contractor was licensed

Use the Contractors State License Board's online license check. You can search by license number, business name or the name of a person on the license, and the results show license status and complaint disclosures.

1. Search the license number from the contract, invoice, truck or business card. If none was given, search the business name and the owner's name.
2. Note the classification. Section 7031 asks whether the contractor was licensed in the proper classification for the work.
3. Note the dates. A license that expired or was suspended partway through the job matters, since the test is licensure at all times during the work.
4. Print or save the results with the date you searched.
5. Compare the name on the license with the name on your contract and payment records.

If licensure is disputed in court, the contractor must prove it with a verified certificate from the CSLB, and the burden of proof is on the contractor (section 7031(d)).

Does the $1,000 handyperson exception apply?

Only for small, simple jobs. As of October 2026, Business and Professions Code section 7048 exempts work on one project when the total price for labor, materials and everything else is less than $1,000, the work is casual, minor or inconsequential, and it does not require a building permit. The threshold rose from $500 to $1,000 on January 1, 2025, under AB 2622, and the section was amended again effective January 1, 2026.

The CSLB's December 2024 bulletin on AB 2622 summarizes the catch: if the minor work needs a permit of any kind, or the unlicensed person hires workers, a license is required even under $1,000.

Is it a crime to work without a contractor's license?

Yes. Contracting without a license, unless an exemption applies, is a misdemeanor under section 7028. A first conviction can bring a fine of up to $5,000, up to six months in county jail, or both, with stiffer penalties for repeat offenders. Prosecutors have four years from the contract proposal, contract, completion or abandonment of the work, whichever is last, to file (section 7028(g)).

A person who used an unlicensed contractor is treated as a crime victim eligible for restitution for economic losses after a conviction, even if they did not know the contractor was unlicensed (section 7028(h)).

You can also file a complaint with the CSLB, which says it addresses violations for up to four years from the date of the act. Be realistic about its role: the CSLB states that its investigation does not assure restitution, and suggests the courts if money is your main goal. It also asks whether you formally notified the contractor of your concerns and invites you to include a copy of that letter.

Example: a remodel paid in installments

Example (hypothetical): a homeowner hires a contractor for a $22,000 kitchen remodel and pays $3,000 at signing, then $6,500 and $5,000 as work progresses, for $14,500 in total. The crew leaves with cabinets uninstalled. A CSLB search shows the business and its owner have never held a license.

The contractor may argue about what counts as compensation or raise other defenses. How a court applies section 7031 to particular facts is something to discuss with a lawyer.

How to write an unlicensed contractor refund demand

Before writing, confirm the contractor's legal name. Looking up a business's legal name explains the search. Then put these in the letter:

• The address, the work, the contract date and the total contract price.
• Every payment, with dates, amounts and method.
• Your license search result, with the date you ran it.
• Section 7031(b) and the exact amount you request.
• A response date and how payment should be made.
• A note that you may file a CSLB complaint, stated as a fact rather than a threat.

For a licensed contractor who simply did poor work, the rules differ; see our guide to contractor refund demand letters. For a smaller claim, see the demand step before small claims. Section 7031 does not state its own filing deadline, so ask a lawyer which time limit applies to your claim.

When an attorney-written unlicensed contractor letter makes sense

A demand under section 7031(b) can involve large sums and arguments about licensing dates, classifications and who actually did the work. An attorney-drafted demand is a sensible step when the payments are substantial, when the contractor claims to be licensed under another name, when liens or loans are involved, or when the job was abandoned midway.

Through Talk to My Lawyer, a licensed California attorney writes your letter from your contract, payment records and license search results and sends it on your behalf, naming the contractor and any business entity it used. Filing suit is a separate step, and a lawyer can advise on the deadline and the right court.