Hiring Unlicensed Contractors

I recently had to go to the Contractors State License Board (CSLB) to look up some information on a contractor. I have been there before, but it is a very interesting site. There is a lot of good information here with ways to check to see if your contractor has a license in good standing.

I have heard people ask, “Why do I care if my contractor is licensed? If the guy can do the work, isn’t that the most important thing?” Well, yes and no!

Yes, it is definitely important that your contractor is able to do the work, and do it well. That is actually one of the reasons to hire a licensed contractor. In order to get a license, the contractor has to be able to demonstrate that he has enough experience in his field (electrician, plumber, carpenter, etc.) to meet the state requirements. I am sure there are ways around this, but no one is looking to see if the un-licensed contractor knows how to do the work!

A licensed contractor is much more likely to have spent the time learning his trade. He had to spend a lot of money setting himself up in business and you don't do that unless you can do the work that keeps you in business.

Also, did you know that hiring an un-licensed contractor opens YOU up to all kinds of liability?

When you hire your brother-in-law to put a new roof on your detached garage, and he’s not a licensed contractor, but (maybe) he works in that field, you have just hired an employee in the eyes of the state! This means that YOU are now responsible for payroll taxes, social security and workman’s compensation insurance! If you don’t take care of these, the state may end up fining you for the taxes and, if he falls off your roof, you could end up paying him for the rest of your life!

Take a look at this link on the Laguna Niguel city website. There are three actual cases outlined here.

Another reason to only hire a licensed contractor is that he can pull permits. If you have work done in your home that requires a permit be pulled, and you do not have a permit pulled, you, as the homeowner, are subject to fines from the city. If the licensed contractor does not pull the permit, he is usually liable. If it is an unlicensed contractor mot only are you on the hook for the fines, but see above! Take a look at this notification from the CSLB.

To sum it up: you might pay more up front to have a licensed contractor do work for you, but you might pay a lot more in the long run for an un-licensed contractor. It’s your money, and therefore it’s your choice.