September 21, 2011
************
Comments
************
Ken
In reply to Dusan on a Contractor hiring a licensed alarm company, in NY it's pretty much a remedied issue.
A General Contractor can hire a licensed alarm company but cannot hold himself out to be in the business of installing, servicing or maintaining a security or fire alarm system. therefore, under the license requirements he would have to have the "buyer" enter into a contract with the Alarm Company directly. . Title 19, NYCRR, Part 195.2, (a), (2) states "An individual, firm, company partnership or corporation must be licensed if it holds itself out to the public as being able to do so." To me that means he cannot contact with the "buyer" under his own business name.
This issue has been challenged before and the Dept of State has ruled based on 195.2.
For a General Contractor to contract with the "buyer" under any other circumstance without being licensed is a violation of Article 6D.
I'm sure that you know the alarm law in Texas, Is there a different interpretation or requirement for General Contractors?
Thanks,
Regards,
RON PETRARCA
Electronix Systems
***********
Ken,
In my opinion, the general contractor needs to be licensed in the state they are conducting business in. They don't need licenses in all categories. Part of the training to become contractors is to learn and understand the laws of the state issuing the license. The general contractor is supposed to hire licensed contractors for every discipline where a license is required.
Ray Yauchler
Tampa Bay
************
Ken,
Here in California a General Contractor is permitted to enter into a contract that requires the use of at least two unrelated building trades, (this covers trades he is not specifically licensed to perform). The role of the general Contractor is to superintend the construction, accordingly there is provision in the code to allow him to do that through the use of subcontractors that are licensed.
When we are hired to do an installation through a General Contractor we do the installation only with the GC. Any other services, such as monitoring, are contracted directly with the building owner or legal occupant.
The actual code is quoted below;
B - General Building Contractor
Business & Professions Code
Division 3, Chapter 9. Contractors, Article 4. Classifications
7057. (a) Except as provided in this section, a general building contractor is a contractor whose principal contracting business is in connection with any structure built, being built, or to be built, for the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind, requiring in its construction the use of at least two unrelated building trades or crafts, or to do or superintend the whole or any part thereof.
This does not include anyone who merely furnishes materials or supplies under Section 7045 without fabricating them into, or consuming them in the performance of the work of the general building contractor.
(b) A general building contractor may take a prime contract or a subcontract for a framing or carpentry project. However, a general building contractor shall not take a prime contract for any project involving trades other than framing or carpentry unless the prime contract requires at least two unrelated building trades or crafts other than framing or carpentry, or unless the general building contractor holds the appropriate license classification or subcontracts with an appropriately licensed specialty contractor to perform the work. A general building contractor shall not take a subcontract involving trades other than framing or carpentry, unless the subcontract requires at least two unrelated trades or crafts other than framing or carpentry, or unless the general building contractor holds the appropriate license classification. The general building contractor may not count framing or carpentry in calculating the two unrelated trades necessary in order for the general building contractor to be able to take a prime contract or subcontract for a project involving other trades.
(c) No general building contractor shall contract for any project that includes the "C-16" Fire Protection classification as provided for in Section 7026.12 or the "C-57" Well Drilling classification as provided for in Section 13750.5 of the Water Code, unless the general building contractor holds the specialty license, or subcontracts with the appropriately licensed specialty contractor.
(Amended by Stats. 1997, Chapter 812 (SB 857).)
§ 7026.12. Installations of fire protection systems
The installation of a fire protection system, excluding an electrical alarm system, shall be performed only by a contractor holding a fire protection contractor classification as defined in the regulations of the board or by an owner-builder of an owner-occupied, single-family dwelling, if not more than two single-family dwellings on the same parcel are constructed within one year, plans are submitted to and approved by the city, county, or city and county authority, and the city, county, or city and county authority inspects and approves the installation.
Added Stats 1988 ch 1035 § 1. Amended Stats 1994 ch 185 § 1 (AB 2646).
John Becker, President
Digital Security and Electronics, Inc.
*************
Ken,
Thanks again for coming. I had good feedback about what you were teaching the dealers.
Regarding the comment in the email below, here is what Texas rules have to say about General Contractors:
RULE §35.14 Unlicensed General Contractors or Other Intermediaries
An unlicensed general contractor or other intermediary may not offer to provide and may not provide a regulated service. Any contract to which an unlicensed general contractor is a party which also involves regulated services must include a licensed subcontractor and must meet the following requirements:
(a) the offer, bid, or proposal, and any related advertisements, must clearly and conspicuously state that the general contractor or broker is not licensed to perform the service in question, and that the regulated service is to be provided exclusively by a licensed party;
(b) The contract and any bid or offer to perform a regulated service must identify the licensee by name and licensee number;
(c) The licensed subcontractor must be an expressed party to the contract; and
(d) The contract must clearly and conspicuously provided that the licensee is fully responsible for the regulated service and that the unlicensed general contractor will have no involvement in the regulated service.
RULE §35.35 Standards of Service
(a) In accordance with subsection (c) of this section, a licensee shall inform each client he is entitled to receive a written contract that contains the fee arrangement with necessary information covering services to be rendered.
(b) A written contract for services required to be licensed under the Act shall be furnished to a client within seven days after a request is made for such written contract. The written contract shall contain the fee arrangement, with the necessary information covering services to be rendered.
RULE §35.36 Consumer Information
(a) A licensee shall, either orally or in writing, notify all consumers or recipients of services of the license number and the name, mailing address, and telephone number of the Private Security Bureau for the purpose of directing complaints.
(b) If a licensee chooses to provide the notice required by subsection (a) of this section in written form, the notification shall contain their license number, the name, mailing address and telephone number of the Bureau, in a type-face of the same size as that which appears in the document as a whole, but in no case less than 10 point size.
Gary Dawkins, CEO
Response Center USA
**************
You guys read into things and take them too literally. Yes it is legal for the general contractor to hire licensed trades without himself being licensed in those trades. He is the general contractor that is not performing the work nor claiming to be the licensed contractor performing the work. The licensed trade doing the specified work is the licensee that is responsible for meeting the code and filing the necessary permit papers which has his firm and him stated on it as the licensee not the general contractor. The licensed trade must submit insurance papers to the general contractor that he has all the required insurance and in the event of a problem is ultimately the responsible party if there is a problem. The general contractor either upon a request from the licensed contractor makes payment to him or authorizes payment to be made by others (can be the owner, bank etc.).
You guys are confusing the general contractor with someone in a trade who is unlicensed to perform the work he has been hire to do and is looking for a license holder either to cover form him with his license and firm name or do the work for that unlicensed firm or individual and become the responsible party. In that case if is illegal because the firm is misrepresentation itself as being licensed to do work that is not licensed to do. That firm should not be bidding on work that they should not be doing and then subcontracting it out to a licensed party in the same trade.
That is like an unlicensed driver asking a licensed drive to accompany him in the car while he drives and claiming that it is ok because the licensed passenger is covering form him with his license. I would not want to be the lawyer defending this person. When you are asked to do work for an unlicensed company in the same field as you, you should run away quickly. Ultimately you will be the one hung out to dry when the party who hired you is long gone with your license on the line.
If you are asking this question to begin with then you are considerate it and too desperate for work. Perhaps you should get a job working for the unlicensed firm that now can use your licensed and now be considered licensed. The real question is are they paying you just to do the work or paying you to do the work and splitting the profit's 50%/50% by using you license? Why would you ever consider doing this? Yes this is done in many industries but that does not make it right.
Monitoring and service agreements can only be done with the owners not general contractor and as you know in most cases that a separate and distinct corporation is formed just for that project or building and it is promptly closed upon completion of that project therefore making your monitoring and service contract un enforceable and useless.
This should clear everything up on that continually asked question about doing work for an unlicensed firm engaging in a business that are not licensed to be in. One thing more…..the individual is licensed in most trades as opposed to the business or in lieu of, just look at every engineers seal, electrical and plumbers seals and now the new, NEW YORK STATE ALARM SEAL. http://www.nyfaa.org/documents/NYFAAreleaseREV3.pdf I know this because Ron & I did it on behalf and with the NYFAA.
How’s that RON did I tell them?
S.G.
*************
Ken
I wanted to comment on this issue, first of all I read your blog almost everyday and think that this a great forum for Alarm Companies like ours.
OK a GC can contract with the Electrician who has a C-10 for example even though the GC does not have a C -10 the Electrician does and that license exceeds the requirements to engage in wiring any structure for cable,alarm data etc. So the only issue I see, is if the State considers the Electrician as an unlicensed sales rep because you need in Ca, an ACE license to work with sale or install alarm systems so the commission's made in the project would be like making a sale, however, unless specified that you cannot contract with alarm companies specifically the GC should be able to bid the job under his or her License. If the GC or Electrician actually contract or connect the consumer to a central station than that would be a violation, but running the wire is not an issue because the C -10 or Electrician's license allow installing the wire just not the components. Technically the Electrician who hires the alarm company to do the install of equipment is the customer, so the alarm company can install the hardware and connect to a central station, I hope this logic could solve the problem.
I am familiar with Ca so if this is becoming and issue in Texas another option for the GC might be to just include the wiring for the structure in the Bid and not the hardware most of the markup is in the labor aspects anyway not the equipment ?