Here’s what the California State License Board (CSLB) has to say about licensed vs unlicensed contractors:
“It is illegal for an unlicensed person to perform contracting work on any project valued at $500 or more in labor and materials. Besides being illegal, unlicensed contractors lack accountability and have a high rate of involvement in construction scams.”
While the law’s pretty clear on the subject, the fact remains that the CSLB and law enforcement stay pretty busy setting up stings and other actions designed to catch unlicensed contractors and the courts are full of claims by consumers trying to recover damages from these individuals.
The argument in support of a consumer knowingly undertaking the risk associated with hiring the unlicensed will be the subject of our next article. But before we get into the risk/reward debate, we need to get a better handle on some of the risk issues as they relate to the consumer’s objectives. For the consumer, the real issue comes down to their desire to get the work they want done with the least amount of headaches and at the best price for the value. So let’s look at a few additional truths that should enter into the decision process:
- If someone is really qualified to do the work you want done without a lot of stress, than the question to be asked is “Why doesn’t that individual have a license?” There may be a valid reason like a past conviction involving ripping off consumers; or insufficient experience in order to qualify for the license.
- If anything goes wrong, you’re pretty much on your own. The law cannot help you (after all, you committed an illegal act when you hired that unlicensed guy) and the CSLB’s attitude comes down to something akin to an “I told you so”. They reserve their scant resources to help law-abiding consumers. Even when they go after or set up stings to catch the unlicensed guy in the act, their objective is to stop him or her from taking advantage of new victims and punish him for breaking the law – none of which helps you recover any damages you may have suffered.
- Insurance companies typically will not insure or bond an unlicensed operator. Imagine what would happen when that worker without workers compensation coverage experiences a slip and fall or other type of accident (whether real or a scam) on your property – you may now be responsible for their medical bills plus anything else their lawyers can pin on you. Or imagine this nightmare scenario – during the job, your property is damaged (accidentally of course) by one of their workers and you now discover they don’t have liability insurance to take care of the damage.
This introduction to the risks associated with unlicensed activity is probably enough to make anyone wonder why would someone hire an unlicensed contractor. But as any thriving underground economy exists for a reason, we’ll next take a closer look at some of the influencing issues.