What Is a General Contractor?

You hire one company and sign one agreement, no matter how many trades the job turns out to need.

General contracting is the name for that arrangement, and nobody trains as a “general contractor” the way an electrician trains as an electrician. The state licenses the authority to answer for a whole building project, with coordination, purchasing, and liability in one place.

You’ll learn:

• Why the license turns on a two-trade rule, and which jobs fall under it
• How an unpaid subcontractor can lien your house after you’ve paid in full
• What the $500 licensing threshold changed to in 2025, and the catch behind the number
• Which repairs cost less without a general contractor
• What signing as an owner-builder puts on you
• The five lines to read on a contractor’s license before you sign

What a General Contractor Does Between Your First Call and Final Inspection?

The job splits into two stretches that look nothing alike, and homeowners tend to see only the second. On a whole-home renovation, paperwork and pricing fill the first months, and sequencing fills every week after demolition.

1. Scope and estimate. We measure, ask what you want, and price the work line by line so you can see where the money goes.
   
2. Permits and plan check. Drawings go to the city, corrections come back, and we answer them. Plan review runs on its own clock, and it starts long before anything gets torn out.
   
3. Sequencing. Rough plumbing before rough electrical in some rooms, the reverse in others, and an inspection between most of them.
   
4. Materials and lead times. Cabinets ordered months ahead, tile counted with waste factored in, a slab picked before counters get templated. Our timeline guide for Bay Area kitchen remodels shows how far ahead that goes.
   
5. Inspections. We call them, meet the inspector, and fix whatever gets flagged.
   
6. Punch list. Anything unfinished or wrong gets written down at the end, and the job closes only once that list is empty.

General Contractor vs. Subcontractor, and Who Gets Paid by Whom

The difference is the contract. We answer to you for the whole project, and each subcontractor answers to us for one trade. You pay us, we pay them, and most of them never meet you.

A subcontractor or supplier who goes unpaid can record a mechanics lien against your property even after you’ve paid your contractor in full, which is what that certified letter from a cabinet supplier is about. CSLB’s homeowner’s guide to preventing mechanics liens covers the 20-day preliminary notice behind it.

Because the trades are coordinated through us, project changes should go through the project manager rather than being given directly to individual trades on site.

What Counts as General Building Construction in California? 

California draws the line in Business and Professions Code section 7057. A Class B general building contractor works on structures needing at least two unrelated building trades, and framing or carpentry can’t count toward those two, though a B can take a framing or carpentry job on its own. General building construction covers that multi-trade work, and single-trade jobs outside framing belong to a specialty license.

The dollar line moved recently, and plenty of advice online still quotes the old one. Assembly Bill 2622 raised the licensing threshold from $500 to $1,000 in combined labor and materials on January 1, 2025. The catch matters more than the number. Permitted work needs a licensed contractor at any price, and so does any job where the unlicensed person brings a helper. Up-front deposits on a home improvement contract are capped separately at $1,000 or 10% of the contract price, whichever is smaller.

Jobs That Don’t Need a General Contractor

Single-trade work belongs to a specialist, and paying a general contractor to manage one subcontractor buys you little.

• A re-roof, a repaint, a water heater swap, a fence, a floor replacement over sound subfloor.
• Anything one licensed C-class contractor can start and finish alone.

Remodels rarely stay that simple. A bathroom renovation touches plumbing, electrical, waterproofing, tile, and drywall inside one small room, and a kitchen adds cabinetry, counters, gas, and appliance circuits on top of that. 

How Contractors Price the Job, and What the Fee Covers?

Two pricing structures dominate residential work, and the bid in front of you uses one of them. A fixed-price contract names one number for a defined scope, and the contractor eats the difference if a line runs over. Cost-plus bills actual costs with an agreed percentage on top, which reads as more transparent and leaves the final figure open until the job closes.

The structure sets the incentives too. When a cabinet crew no-shows on a kitchen remodel, somebody pays for the lost week, and under a fixed price that somebody is us. A contractor working to a set number pushes harder on the calendar than one billing you for the days.

The management share of what you pay covers costs that never show up as materials on a receipt. Estimators, project managers, liability coverage, workers’ comp on every employee, warranty exposure after the last check clears, and the cost of re-doing somebody else’s mistake on our dime. Compare bids by scope before price, since a low number nearly always means a shorter list of included work.

Can a Homeowner Pull Their Own Building Permit? 

State law lets you act as your own contractor on property you own, under the owner-builder exemption. Homeowners weigh it most on backyard projects like building an ADU, where the appeal is skipping the management fee and hiring trades directly.

Signing that permit application as owner-builder makes you responsible for the whole job, including payroll taxes and workers’ compensation for anyone you hire, injuries on your lot, and sequencing every trade. One trap catches people trying to split the difference. Paying an unlicensed “consultant” to run the project is illegal here, and the liability still sits with your signature.

People who came up in the trades pull it off. Homeowners with day jobs tend to spend the saved fee twice over on delays and a call to a licensed contractor in month four, and CSLB puts the risks of being an owner-builder in blunter language than you’d expect from a state agency.

How a Design-Build Firm Differs From a General Contractor?

A traditional general contractor builds drawings somebody else produced. You hire an architect first, take the plans out to bid, then sign with the builder whose number you like. Design-build folds both halves into one contract.

We run design-build, so the 3D model you approve comes from the same team that’ll be standing in your house with a nail gun. The effect shows up in change orders, since the people who drew the layout are the ones pricing the fix when it meets a real wall. More on the difference between a general contractor and a design-build firm.

How Do You Verify a General Contractor Before You Sign? 

Any contractor bidding your job has to give you their license number, and the state publishes more behind it than most homeowners check. Ours is 1068557.

1. Status. Active is the only acceptable answer on the Check a License result. Expired, suspended, and inactive all mean no.
   
2. Classifications. A license can carry several, so a company holding a B alongside a C-10 can put its own electricians on your job.
   
3. Contractor’s bond. On file and current, at $25,000 since 2023. A lapse suspends the license automatically, so a gap here explains a lot.
   
4. Workers’ compensation. Either a current policy or a valid exemption. A crew working without it can become your problem after an injury.
   
5. Complaint disclosure. Citations and legal actions from recent years show up here, and an empty section is worth a good review.

Thinking About a Bay Area Remodel?

One visit tells us most of what we need. We measure the space, ask how you use it, and follow up with a free itemized estimate that commits you to nothing. Take it to three other contractors if you like, since being compared is fine by us. Reach us at (408) 637-6142 or in**@***************ca.com.