We keep hearing instances of homeowners being conned by unlicensed contractors for a huge sum of money due to unfair practices. Many people hire contractors for home remodeling, renovation, construction, building, furniture work, etc., without ascertaining if their contractor is licensed or not. A licensed contractor will have his license number mentioned on his business card.
Quick TipVisit the Department of Consumer Affairs' Contractors' State License Board website to verify if a contractor is licensed or not.
Also, he will have the necessary experience and expertise to carry out the assigned construction job. Not only that, but if the task does not turn out as expected, you can file for a claim from the residential contractors' recovery fund. Hence, hiring a licensed contractor is the best option. The following points will further explain why it is important to hire a licensed contractor.
When you ask for price quotes, in most cases, you will find that those submitted by contractors without a license will be much lower than those by licensed ones. This is because, generally, non-licensed contractors are:
» Not insured
» Are not bonded
» Do not pay unemployment compensation to the workers
» Do not contribute to the residential contractors' recovery fund
However, all this will affect you in an adverse manner. Hiring licensed contractors seems comparatively expensive, because they pay all the above overheads. In case of an unlicensed contractor, you will have to bear the burden of insurance coverage, and there will be no compensation in case of a problem. In the long run, hiring a licensed contractor will only prove to be financially beneficial for you.
There is no way to know or corroborate the experience or expertise of an unlicensed contractor as there is no record of the same. This means that you can end up with the wrong contractor who claims to have several years of experience, but may have worked only for a few months as a worker. You would be trusting a person who seriously lacks any kind of experience in the field.
According to the licensing requirements, most contractors have to prove that they have at least 4 years of relevant experience in their category, and also need to undertake a business management test. Hence, when hiring a licensed contractor who has fulfilled the tough requirements of the state, you can rest assured that your work is going to be handled professionally by an expert.
It is very difficult to run a background check on a contractor. With a licensed one, you know that you are hiring the right individual. With an unlicensed one, you really cannot tell if someone holds a criminal record or whether there are complaints filed against him.
Before allotting the license, their background is scanned for any instance of crime. Hence, if you are hiring a licensed individual, in all probability, he will have a clean record. Since a license will not be granted if there are any outstanding complaints filled against him, you can be assured about hiring a genuine contractor.
By hiring an unlicensed contractor, you run the risk of shelling out a lot of your hard-earned money. As he is not bound by any codes and procedures, the contractor will just keep postponing your work, and escalate the cost of hired labor and materials. Apart from causing immense inconvenience, it will also lead to a huge final bill.
Licensed contractors follow stringent building standards, codes, and procedures. Hence, it unlikely that your work will get delayed, or you will be charged extra.
There are unlicensed contractors who will demand a huge advance citing various problems, and then abscond with the money. Even if you try to find them again, it will be impossible. You will end up losing a lot of your hard-earned money.
By hiring a licensed contractor, you definitely reduce the risk of getting conned by a fraudulent person. You can demand to check the previous work of the contractor, and even speak to the homeowners he has worked for. This will tell you a lot about his strengths and weaknesses.
You may not be able to file a complaint against an unlicensed contractor as in many states, it is illegal to hire unlicensed contractors. Hence, if you have been a victim of contractor fraud, there is very little you can do to get your money back.
If you hire a licensed contractor, and the work is substandard or violates the prevalent codes of non-performance, then you have the right to file a complaint against him. This complaint can be filed against the contractor's license, within two years of the date of occupancy or the last day of work.
If an unlicensed contractor does substandard work and runs away, you will not be able to claim any kind of compensation, thereby losing out on a lot of money and time.
On filing of a complaint, you may even be eligible to apply to the residential contractors' recovery fund, and receive a compensation of about USD 30,000. Every licensed contractor is covered to a maximum of USD 30,000 for every property owner he works for.
An unlicensed contractor will not have any kind of insurance coverage. Hence, if any accident occurs on the premises or your property gets damaged, you are liable to pay entirely for it. In fact, you may use your homeowner policy to pay for it, and this will definitely increase the cost of your premiums.
Licensed contractors have both general liability and workers' compensation insurance. General liability insurance covers all kinds of damage or accidents on the premises where the work is going on. While workers' compensation completely covers injuries or accidents to the workers on your premises.
Your unlicensed contractor is not obligated to provide any kind of warranty for the workmanship after the work is over. On the other hand, a licensed contractor will provide a warranty for his workmanship.
As it is illegal for unlicensed contractors to practice in many states, you will not be able to cross check if there are any complaints registered against them. In all probability, a licensed contractor will be registered on the BBB website. Hence, you can check their ratings and credibility before hiring them.
Hence, it is important that you hire a licensed and A+ BBB-rated contractor. Please retain all important transaction and contract records. Especially a record of all the checks paid to the contractors and a copy of the original contract in case of filing a claim. Hiring a licensed contractor will ensure that your job is well done.