We recently came across a home owner who had an awful experience with an unlicensed contractor. The work was not up to code, the workmanship was poor, and most importantly they wasted their money. When we asked the home owner, why didn’t they hire a licensed contractor in the first place, they said “We wanted to save on cost”. Though it may seem less expensive at the time, hiring unlicensed individuals can be very costly. There is a reason, why they are unlicensed, most of the time is due to lack of experience in the field.
Hiring unlicensed individuals can be less expensive, if you get lucky. However, there are many cons to this. For one, as a homeowner, if an unlicensed individual gets hurt, you are completely liable and responsible for any personal injuries. On the upside, a licensed contractor is required by law to carry workers compensation. Second, your property is not protected. You ever wonder why contractors always say, “Bonded and Insured”. We’ll it is because insurance protects your property from damages up to whatever insurance coverage that contractor carries (most contractors carry up to $1,000,000). The bond protects you, as a homeowner, from bad workmanship. Now let’s say you happen to get unlucky with a licensed contractor and the work was not up to code or per industry standard, then that is when the bond comes into play.
Moreover, there have been several cases on which consumers gets scammed by unlicensed individuals. We recently also met with a customer that engaged with an unlicensed contractor. The unlicensed individual asked for a 50% deposit, but did you know that by law, a contractor can only charge a deposit of up to 10% or $1000.00, whichever one is less. On one occasion, we heard of a homeowner who paid an unlicensed individual money and was never heard of again.
To qualify as a licensed contractor, one must have a minimum of 4 years’ experience in the field. Licensed contractors also must go through background checks and pass a written exam by the State Licensing Board. In fact, you can always check on the State website if a contractor is licensed or not. It may seem a bit more expensive to hire a licensed contractor, but that is due to the overhead of purchasing the workers compensation, insurance, and bond for your protection.
Next time you are shopping around for work in your home, we suggest hiring a licensed contractor. Make sure you check their license, make sure that their insurance can cover your property, and make sure they are bonded.
For more information about licensing visit the California State Licensing Board site