BPC §7031 — Your Strongest Weapon Against Non-Compliant Contractors

9 min read · Last reviewed April 2026

What BPC §7031 Says

California Business and Professions Code §7031 has two critical provisions:

Subsection (a): A contractor who was unlicensed at any time during the performance of the work cannot maintain any action to collect compensation for that work. In other words, an unlicensed contractor cannot sue you for payment.

Subsection (b): A person who utilizes the services of an unlicensed contractor may bring an action to recover all compensation paid. This means you can get back every dollar you paid — not just the difference between what you paid and what the work was worth.

How This Relates to Permit Violations

While BPC §7031 directly addresses licensing, it has important implications for permit violations. A contractor who is licensed but who performs work without required permits may be in violation of their licensing obligations. In some cases, a failure to obtain permits can be treated as a failure to maintain proper licensure under the Contractors State License Law.

Additionally, if you discover that your contractor was never properly licensed — which is sometimes revealed when permit issues surface — §7031 gives you a powerful tool to recover all money paid.

How to Use §7031

1. Verify the contractor's license. Check the CSLB website to confirm whether the contractor was properly licensed at all times during the work.

2. Document all payments. Gather records of every payment made to the contractor — checks, credit card statements, wire transfers, and even cash payments if you can document them.

3. Send a demand letter. Cite BPC §7031(b) and demand return of all compensation paid.

4. File a lawsuit if necessary. §7031 claims can be pursued in small claims court (up to $12,500) or civil court for larger amounts.