California Increases Dollar Limit for Home Repairs Without Licensed Contractors

California’s latest legislation brings flexibility and cost savings for landlords, homeowners, and tenants alike.

Signed into law in September 2024, California Assembly Bill 2622 (AB 2622) introduces updates to the Contractors State License Law that directly benefit property owners and renters. By raising the threshold for unlicensed contracting work, AB 2622 streamlines small-scale repairs, making property management more efficient and cost-effective.

Let’s break down the key elements of this bill, its benefits for landlords and tenants, and what it means for California’s rental market.

What Is AB 2622?

AB 2622 raises the dollar threshold for contracting work that does not require a licensed contractor. Previously capped at $500, the exemption limit has now doubled to $1,000. This means unlicensed individuals can handle projects valued under $1,000 as long as the work doesn’t require a building permit.

The legislation also provides much-needed clarity around advertising regulations, allowing unlicensed contractors to promote their services for eligible projects. However, they must explicitly disclose their unlicensed status to maintain transparency.

For landlords and homeowners, this change opens the door to cost-saving opportunities for small repairs and upgrades while ensuring clear guidelines for hiring professionals.

Benefits of AB 2622 for Landlords and Homeowners

1. Cost Savings on Small Repairs

Property maintenance often involves small jobs that fall in a gray area between DIY fixes and work requiring a licensed contractor. With the new $1,000 threshold, property owners can hire skilled, unlicensed workers for these smaller tasks without the added expense of licensing requirements.

Examples include:

• Repairing gates or fences
• Patching drywall or repainting a room
• Repairing leaky faucets
• Replacing minor fixtures, like blinds or door handles

For landlords managing multiple properties, this translates into faster, more affordable repairs, making it easier to maintain rental homes and keep tenants satisfied.

2. Faster Turnaround Times

With AB 2622, unlicensed professionals can now handle repairs under $1,000, making it easier to find help quickly.

This is particularly beneficial during tenant turnovers, when quick repairs are needed to get properties market-ready. For example, patching wall holes or addressing minor wear and tear can be done swiftly, minimizing downtime and maximizing profitability.

3. Simplified Property Management

Managing a property portfolio involves juggling a constant stream of repairs and maintenance. AB 2622 simplifies the process by enabling landlords to delegate smaller jobs to unlicensed workers without the administrative burden of vetting licensed contractors for every task.

For landlords of older properties—where minor but frequent repairs are common—this legislation is a game-changer. It streamlines day-to-day operations, saving time and reducing stress.

How AB 2622 Benefits Tenants

While AB 2622 primarily addresses property owners’ concerns, tenants also stand to gain from the new regulations.

Lower Move-Out Costs

When tenants move out, they’re often responsible for repairing damage that goes beyond normal wear and tear. With the increased threshold for unlicensed work, landlords can hire more affordable professionals to handle minor repairs, keeping costs fair for tenants.

Examples of repairs that may fall under $1,000 include:

• Painting touch-ups
• Fixing carpet damage
• Replacing broken fixtures or hardware

By reducing move-out costs, AB 2622 fosters better landlord-tenant relationships, creating a win-win scenario.

Faster Maintenance Responses

Tenants value prompt maintenance. With a larger pool of unlicensed professionals available, landlords can address minor repair requests more quickly, ensuring tenants enjoy safe and comfortable living conditions.

For example, minor plumbing issues, faulty lighting, or cosmetic touch-ups can now be resolved without long delays, improving the tenant experience.

Clearer Guidelines for Unlicensed Work

AB 2622 also addresses transparency concerns surrounding unlicensed contractors, making it easier for property owners to hire responsibly.

Key provisions include:

• Advertising for Small Jobs: Unlicensed contractors can now advertise their services for projects under $1,000 but must clearly disclose their unlicensed status.
• Employment Restrictions: Unlicensed individuals must work alone and cannot hire assistants. These rules protect property owners by ensuring they understand who they’re hiring and the scope of work permitted.

Expanding the Skilled Labor Pool

One of the broader benefits of AB 2622 is its ability to expand the labor pool for small-scale projects. Licensed contractors are often booked for months, leaving minor repairs underserved. This law helps fill gaps in the labor market by giving skilled workers more opportunities while ensuring minor repairs are completed on time.

Challenges and Considerations for Property Owners

While AB 2622 offers undeniable benefits, property owners should still exercise caution:

• Due Diligence is Key: Even for unlicensed work, vet professionals carefully. Check reviews, references, and experience to ensure quality results.
• Building Permits Still Apply: Any project requiring a permit must still be performed by a licensed contractor, regardless of cost.
• Insurance Coverage Matters: Ensure unlicensed workers carry adequate insurance to protect against liability.

Why AB 2622 Matters for California’s Rental Market

California’s rental market is among the most competitive in the nation. AB 2622 reflects a forward-thinking approach to property management, balancing affordability with accountability. For landlords, it streamlines operations, especially during tenant turnover periods. For tenants, it keeps move-out costs fair and ensures quicker responses to maintenance requests. This legislation is a practical solution that addresses real-world challenges, making it easier for property owners to maintain high-quality rentals while fostering positive relationships with tenants.

How Authority Property Management Can Help

AB 2622 is a game-changer for property owners and tenants alike. By increasing the exemption threshold to $1,000, it allows property owners to handle small repairs and upgrades quickly and affordably. For tenants, it ensures faster maintenance and more reasonable move-out costs. Whether you’re managing a portfolio of rentals or tackling home improvement projects, AB 2622 provides the flexibility and clarity you need to succeed in California’s dynamic real estate market.

You don’t have to navigate California’s complex property laws alone. At Authority Property Management, we specialize in handling everything from tenant communication to repairs and maintenance, ensuring your properties are managed efficiently and effectively. Whether you’re in Redding, Anderson, or Shasta Lake, we’ll help you take full advantage of AB 2622’s benefits.

Ready to streamline your property management process? Contact us today to learn how we can simplify your property management experience.