The Truth About RMO-Based Construction Companies—and Why It Matters for Insulation, Attic Work, and Beyond
If you’re a California homeowner planning to upgrade your attic insulation, seal air leaks, or rodent-proof your home, the last thing on your mind might be how your contractor is licensed. But here’s the truth:
Not all contractor licenses are created equal—and some may not even belong to the person doing the work.
Welcome to the world of RMOs—Responsible Managing Officers. You may have seen a contractor say, “We’re licensed and insured,” but what they don’t tell you is that their license is borrowed from another person who may not even work for the company full-time (or at all).
In this blog, we’re breaking down:
- What an RMO is
- How it differs from a company that owns its own license
- Why this matters for homeowners
- What the law says about RMO abuse
- Risks of hiring the wrong type of contractor
- How to protect yourself
Let’s clear up the confusion and help you hire smarter.
What Is an RMO?
RMO stands for Responsible Managing Officer. It’s a designation used in California contractor licensing that allows a person who holds a valid license in a specific trade to qualify a company that does not have a license of its own.
The RMO structure is legal—but only under strict conditions.
Here’s how it works:
- An RMO is a licensed individual who agrees to place their license number on a business entity (like a corporation or LLC).
- That business is then legally allowed to perform contracting work under the RMO’s license classification.
- The RMO must be actively involved in operations, oversee projects, and ensure code compliance.
In theory, the RMO takes legal responsibility for all work done under the license.
What’s the Problem?
The problem is that many RMOs are simply license “renters”. They have little to no actual involvement in the company using their license.
This means:
- The business has no trade expertise of its own
- The RMO isn’t supervising the work
- The workers aren’t trained or qualified under the license
- If something goes wrong, accountability disappears
Worse, if the RMO pulls their license or gets suspended, the company immediately loses its legal right to operate.
This creates a high-risk scenario for homeowners and can lead to:
- Code violations
- Insurance claims being denied
- Voided warranties
- Legal disputes
- Financial loss
Companies Without an RMO: Real Licensed Contractors
By contrast, a company without an RMO structure usually means:
✅ The owner of the business is the license holder
✅ They are actively involved in operations
✅ They take full legal and financial responsibility
✅ They are trained in the trade and understand compliance and code
✅ They are permitted to supervise, bid, and perform the work directly
In short, these are real professionals—not paper license holders.
Key Differences: RMO-Based vs. Self-Licensed Companies
| Feature | RMO-Based Company | Self-Licensed Company |
|---|---|---|
| License Ownership | External (belongs to someone else) | Internal (owner or officer holds it) |
| Involvement | Often minimal or symbolic | Hands-on, daily involvement |
| Risk to Client | High (license can be revoked at any time) | Low (owner stays accountable) |
| Supervision | Rarely on-site | Typically on-site or involved |
| Accountability | Hard to enforce | Clear and direct |
| Stability | Unstable if RMO withdraws | Stable, long-term license control |
What the California Law Says About RMOs
California law does allow the RMO structure, but only under strict requirements. According to the Contractors State License Board (CSLB):
An RMO must exercise direct supervision and control of the construction operations of the business. If not, the RMO may be disciplined, and the license may be revoked or suspended.
The CSLB has cracked down on companies using “sham RMOs”—where the RMO collects a fee and lends the license with no actual involvement. This is a serious offense, and CSLB has published multiple consumer warnings.
CSLB Code §7068.1 states:
- An RMO must be actively involved in:
- Construction supervision
- Hiring and firing
- Scheduling
- Contract negotiation
- Quality control
If they’re not, the company is essentially operating unlicensed.
Warning Signs a Company Is Using a “Paper License” or RMO
As a homeowner, here’s how to spot a red flag:
🚩 1. The license holder is not the owner
Ask: “Who holds the license?” If it’s someone not involved in your project or company ownership, that’s a sign of an RMO setup.
🚩 2. No one on-site knows the license holder
Ask your estimator or crew leader: “Are you the license holder?” If they don’t know who is, that’s a problem.
🚩 3. License holder is qualifying multiple companies
Use the CSLB License Check to see if the RMO is listed on more than one license. That’s not always illegal—but it can signal license renting.
🚩 4. The company is brand new but claims decades of experience
Many companies “buy” an RMO to appear qualified. But they may not have any insulation or attic experience themselves.
Why It Matters for Attic and Insulation Work
Attic work involves:
- Electrical clearances
- Fire-rated materials
- Structural framing considerations
- Air sealing codes
- Rodent health hazards
- Sanitation and ventilation compliance
- R-value and insulation depth verification
- Moisture and mold mitigation
Only a licensed, experienced contractor can manage this work safely and legally. If you hire a company relying on a rented license, you’re risking:
- Code violations
- Failed home inspections
- Energy rebates being denied
- Improper installation
- Rodent contamination left untreated
- Voided warranties or homeowner’s insurance
Real Case Example: What Can Go Wrong
A San Diego homeowner hires “ABC Insulation” for a full attic job. The salesperson says they’re licensed and bonded.
- The license is valid—but it’s held by someone named John Doe who is not on the job site.
- During removal, the crew damages an HVAC duct, exposing asbestos.
- When the homeowner calls to complain, the company is unresponsive.
- CSLB is contacted—but since the RMO wasn’t supervising, they revoke the license.
- Now the homeowner must pay out-of-pocket to repair the damage and finish the job properly.
- Their home warranty and HVAC insurance refuse to cover it because an improperly licensed company did the work.
All of this could have been avoided if the homeowner had verified the license structure beforehand.
Why Hiring a Properly Licensed Contractor Protects You
Here’s what you get when you work with a contractor who holds their own license:
✅ Direct Accountability – If something goes wrong, you know exactly who’s responsible.
✅ Trade Expertise – They passed trade-specific exams, not just business forms.
✅ Stability – The license stays with the company and isn’t dependent on outside individuals.
✅ Warranties You Can Trust – They stand behind their work with long-term guarantees.
✅ Better Supervision – Jobs are managed closely with attention to detail.
✅ More Legal Protection – If there’s a dispute, CSLB holds them directly accountable.
Attic Shield: No RMOs. Just Real Licenses, Real Work.
At AtticShield, we hold our own C-2 insulation license—no RMO, no license borrowing, no middlemen.
This means:
- Every job is performed by trained professionals who are supervised by the license holder.
- We take legal and ethical responsibility for every service we provide.
- Our clients enjoy full protection under California contractor law.
- Our warranties are enforceable and backed by CSLB requirements.
How to Protect Yourself as a Homeowner
Before hiring a contractor for attic insulation, air sealing, or rodent proofing:
- Ask who holds the license.
- Verify it on CSLB’s website.
- Avoid companies that can’t name their license holder.
- Choose contractors who are licensed in the exact trade (like C-2 for insulation).
- Read reviews and ask for before-and-after job photos.
- Avoid companies offering unusually low bids—often a sign of cutting corners.
Final Thought: Real Licensing = Real Peace of Mind
The contractor you choose for your attic project can make or break your home’s energy efficiency, safety, and resale value. Don’t take chances with a company that borrows someone else’s qualifications.
Whether you’re insulating your attic, removing contaminated material, or rodent-proofing your crawlspace, make sure the contractor is:
- Properly licensed in California (C-2 for insulation)
- Not using an RMO or “borrowed license”
- Experienced, insured, and reliable
Ready to Work with a Contractor You Can Trust?
📞 Call AtticShield at (858) 402-0066
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