To protect homeowners and free them from project risks and liabilities, most states require contractors who carry out renovation projects over $2,500 to be state-certified. If something like this were to happen, could you hold the unlicensed, uninsured contractor liable if your insurance company refuses to pay for the damage? When weighing the pros and cons of the exclusive employment of licensed contractors, it is in your favor to choose the approved path. If you hire a contractor without a permit, you could have privileges on your property, making it difficult for you to sell or refinance your home in the coming years. But the temptation of potential savings is a common trap that people fall into. The unlicensed entrepreneur offers his much lower offer and promises to give you the same results as his licensed competitors. And then they are fixed at the end. On the other hand, if you hire a licensed contractor, you have peace of mind that all work has been paid for and is guaranteed. If your contractor doesn`t deliver what you paid, you can discuss it with their insurance or surety company. For a homeowner, the lack of a permit for a project can have consequences later in the life of the house. For example, if they want to sell the house, the fact that the work that has been done does not have a permit can reduce the value of the house. The owner may have to pay for the work to be re-performed by a licensed contractor in order to obtain a permit.
This clearly defeats the purpose of hiring an unlicensed contractor, which was to save money. Now the owner has to do the work twice and pay twice. Getting a government license is not an easy task and definitely separates good entrepreneurs from bad ones. Licensed contractors go through a rigorous process that demonstrates the character, integrity, capacity, financial responsibility and financial solvency, and requires that all bank statements, tax returns and financial data of the business be verified. Here are some of the main specifics that contractors must have to qualify for state approval: This applies not only to a contractor who is not licensed, but also to one who has been improperly licensed. Any unlicensed contractor who works without a permit must appear in court and face misdemeanor fees, which can result in a fine of up to six months in jail and/or a fine of up to $5,000. Keep in mind that continuing contract work without a permit will result in more severe penalties. The State of California takes this offense very seriously and has established certain laws and regulations for public safety as well as for the good of the economy. This also applies to you as the owner.
In the event that a contractor is hired who does not have an active current license, you may face potential lawsuit in the event of a breach. It is of the utmost importance for everyone involved to review licensing and certification before they even start working on a construction project. Always hire a licensed contractor who has workers` compensation and liability insurance. The authorized contractor will obtain all necessary permits and will always ensure that their work complies with the code. This is the best way to ensure that your project is done correctly and that you are not held responsible in case of any problems. This is one of the many things that can go wrong and it is also the main reason why it is crucial to work only with licensed and insured contractors. Due to the seriousness of unlicensed operation, the Contractors State License Board (CSLB), founded in 1929, will apply sanctions to anyone who works without a contractual license. Unlicensed contracts can harm the public, damage the reputation and reliability of the construction industry, and undermine the economy by operating under the table.
This is taken very seriously, especially because of the number of entrepreneurs paid tax-free or the filing of a Form 1099. This has a negative impact on the state`s economy and on the nation as a whole. The cost of obtaining your license is affordable and should not only be an investment in your career, but should also avoid a conviction or negative marking of your master file. When it comes to home renovation projects, you may be interested in the “DIY” route and do the repairs yourself, but what if you don`t have the proper skills or don`t have enough confidence to learn from a YouTube tutorial? In these cases, you need to hire a contractor. Hiring a cheaper contractor to get help with a DIY job seems like the easiest thing to do. To avoid being held responsible for the high cost of medical bills and lost wages as a result of an injury you suffered while renovating your home, avoid hiring an unlicensed contractor. They will certainly tell you that the risk of something going wrong is very low, but if something bad happens or they do a worse job, paying for that damage will go far beyond the potential savings associated with hiring them. Protect yourself by applying for a contractor`s license before hiring them. Find out about his work permit and his indemnity and civil liability insurance. However, no matter how you find an unlicensed contractor or your motivation to hire a contractor, you should know that the reason they can offer the job at such a low rate lies in all the corners they have to cut to work without a license. As with most things in life, if it sounds too good to be true, it probably is. Of course, laws differ in their specific provisions from state to state.
In California, it is illegal for an unlicensed contractor to work on a construction project with a total value of more than $500. Note that California law requires a license for 40 construction-related trades, from plumbers to electricians. And it is illegal for a contractor licensed in one trade to enter into a contract for the provision of services in another trade for which the contractor is not licensed. Some home renovation projects require a building permit from the city, county, or state. Licensed contractors will always contact them, but unlicensed contractors can`t, so they skip this step and don`t ask for it. Since the right permits have not been acquired, this can impact the overall value of your property. Licensed contractors are also much less likely to place a frivolous lien on your property because they know that if you sue them and win, they risk having their license suspended. As mentioned above, anyone who works without a contractor`s license will face severe penalties and offenses. The scope of the indictment depends on the Supreme Court judge, who reviews the facts and makes a decision. If, after the first verdict, the illegal conclusion of the contract continues, the penalties become more severe.
A second offence involves not only a mandatory 90-day prison sentence, but also a fine of 20% of the contracted price, or $5,000. depending on what is higher. Keep in mind that your first offense will be considered a misdemeanor, but any other offense that evolves in terms of operating without a contractor`s license will be considered a crime. You will be sentenced accordingly and your record will reflect that conviction. Again, criminal charges are laid against anyone who attempts to use someone else`s contractual license or deceives the client into believing that they are a licensed contractor. Consumers or customers are not required by law to pay a contractor who does not hold a permit at the time of the work. In fact, a California state court won`t even have the idea of requiring a customer to pay a contractor for the work if the contractor was unlicensed during the period the work was done and completed. .