Contractors and homeowners beware, failing to pull permits is a mistake!
Contractors under the Contractor's State Licensing Law in California are required to pull permits on every project that a permit is required on. The Business and Professions Code governing contractors in California at Section 7090 creates a rebuttable presumption that construction performed without a permit is a willful and deliberate violation of the law. This means contractors can be fined and/or lose their license for failing to pull a permit when required. Worse they could end up sued by the Owner for the cost of any and all destructive testing or damage caused by failing to pull the permit.
Homeowners, don't pull your own permits! If you do so you become what is termed an Owner/Builder and have liability for workers injuries and if any issues arise with construction you could be liable for the mistakes. This could be very costly, if you are paying a licensed contractor to perform and supervise the work, make them pull the permits.
Likewise, homeowners, do not be fooled by a contractor telling you that you can save money by not pulling permits. The contractor is either worried about shoddy workmanship that he intends to perform or is trying to get the work underway and done quickly so he wants to avoid the wait for the permits and the delays and potential changes required by inspections. While it might be nice to save a few dollars on the remodel or construction by not pulling permits, homeowners should think twice. If a building inspectors sees work being done he can stop your project and potentially red tag it so you can't live there until permits are pulled and inspection of previous work performed. Further, even if you can hide the fact that work is being done, if there are no permits and you later sell the home you could be sued for failing to pull the permits and have to pay the new buyer to either come into code compliance or potentially tear out all the improvements done and start over. The risk is too high, don't let saving a few dollars on pulling permits create large issues later on.