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Discussion Forum

Unlicensed contractor – Problem???

| Posted in General Discussion on June 3, 2001 11:48am

*
Hello –
We are in the process of taking bids for the installation of cedar claps and new construction windows on our home in MA, and have found a contractor we are interested in who has a tremendous reputation. Problem is that they are just striking out on their own and while insured by their personal policy, they do not have a state license (yet.)

Gut instinct – given our interactions and stellar references with/from the contractor (who works solo) is there should not be a problem. If we go with this person, are we going without a safety net here? Also, will their personal policy cover our liability on the jobsite – and what if he brings in a temporary helper.

Thanks much in advance for any insight.
CJH

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Replies

  1. FredB | May 30, 2001 01:58am | #1

    *
    Well I may step on some toes but here goes. If a license is required for what you are hiring done, don't deal with an unlicensed person. There are lots of people who have gone to the trouble of complying with the law to choose from. So, why deal with someone who is flaunting the law and trying to make a living at it?

    Plus, you are playing with fire with regards to your homeowner's insurance and future claims. Plus, how you gonna get a clear inspection when using a fly-by night contractor?

    So, either do it yourself, if you know how; or hire a licensed person. Don't deal with someone whose mindset is to duck the rules. He'll duck them with your job too; and you won't know it until too late.

    .

    1. Mark_McDonnell | May 30, 2001 02:42am | #2

      *I'll watch my toes too.........If.....you can answer all of Fred's questions to your satisfaction, (Great response Fred) go with the gut......Every ethical, top drawer Tradesman I know "floated" for a short period, before they got all their ducks in a row.If "just getting started" has been going on for more than 3 months.......that'll be a caution.If your the first or second client, you most likely get a job well done by a reputation hungry go-getter......But as Fred pointed out, answer all those questions first.Luck

      1. piffin_ | May 30, 2001 02:50am | #3

        *Fred B, I agree to a point that licensing can protect the homeowner but it is more intensely designerds to protect a tradesperson and a power structure. The constitution originally did away with licensing because licenses were handed out by the Crown. individuals and the economy could be controilled that way. It was preceded by the fuedal system with the trades guilds in the cities protecting their areas.As a believer in the free market and caveat emptor I stand against licensing. This individuals reputation says more than a license ever could. A license implies that the state certifies that this person does good work to a certain standard and relieves the homeowner of the burden of checking references but is by no means a gaurantee of quality performance.Now if you think that you've stepped on toes, watch'm blow me away! Listen guys, I can see both sides of the issue but I believe in freedom.

        1. Ron_Rosa | May 30, 2001 03:59am | #4

          *Most of the time a licence is just to get some more money running through the town. If he has great referals and is trust worthy then go with him. Make sure he has both liability and workmens comp. for his labor , get copies of both.

          1. George_Roberts | May 30, 2001 04:32am | #5

            *If a license is required, how are they going to get a permit to do the work?If a license is needed, find someone with a license.

          2. Jerry_Hill | May 30, 2001 04:34am | #6

            *I agree with Ron....a license doesn't mean that a contractor can do the work or not it just means that they have studied the books and passed the test.I've seen alot of licensed 'hacks' that call themselves contractors.Here where I live theres a running ad in the local tab that If you pay this outfit $250 they will guarantee that you pass 'no pass no pay'. That in itsself tells me what's really going on.

          3. Don_Berinati | May 30, 2001 04:41am | #7

            *While a licensed contractor myself, I'd lean toward going with someone of this person's character and someone you are comfortable with rather than someone who has the requisite piece of paper.A few suggestions: He should not bid the work for a fixed price, as that is probably illegal (at least in CA it is), should provide the necessary insurance or you should, and the permit pulled as an owner/builder.In other words, legally he would be doing the work under your direct supervision; in fact, he'd be his own boss. A possible benefit is that you might get the job done just as well or better, and for a better price.Best - Don B

          4. Rick_Morley | May 30, 2001 05:01am | #8

            *b what the, who the, why the...chanel51if this guy is going to be legit he should at least get himself an HIC (homeimprovementcontractors) license. it only costs $200 and $100 of that goes to a trust fund that allows an unhappy customer to arbitrate should any slacker leave them high and dry.this is only good for MA but if he doesn't at least have that he's never gonna move on to a CSL (constuction supers license) which in MA is considered a contractors license.hope you atleast can get a cheaper price and sometimes you get what you paid for.

          5. blue_eyed_devil_ | May 30, 2001 05:08am | #9

            *Cjh, licenses are over-rated. Licenses are the creation of lawyers to limit competition.Are you interested in hiring someone that is good with paperwork or good with tools?Check the guys references. If they check out, hire him. If he does a good job pay him. Make sure he has the proper insurances in place before he starts his work.blue

          6. Joseph_Fusco | May 30, 2001 05:17am | #10

            *Mr. Devil,

            Odd, but I total agree with you.

            View Image© 1999-2001

          7. Rick_Morley | May 30, 2001 05:43am | #11

            *b what the, when the, who the..yeah throw the code book out too. true, many educated idiots carry a piece of paper that says they are smart but if the inspector doesn't like something the name on the permit is the one they come to right? for the prices being paid out working without a license doesn't cut it and it under cuts the guys who weren't too lazy to follow the law and got their licenses. how about working without an electricians, plumbers or pilots license

          8. davidmason | May 30, 2001 06:47am | #12

            *Give the guy a chance.He dont need no stinkin licence. My two cents, Dave

          9. Justus_Koshiol | May 30, 2001 09:19am | #13

            *Working "outside the law" depends on where you are. In North Carolina, unless the job total is over $30,000 dollars you don't need a license. (you have to have a local privalage license, but that just for city taxes) Now let's look at the small guy like me, and the guys that are the subject of this discussion. I'm a one man (plus a good dog) shop, and I handle a bit of everything, from custom cabinets to attic and garage conversions. Since I've never done anything that cost more than 24,000, (she wanted the whole thing built of teak with blue heron feathers for base trim but I talked her out of it:) Does it really make sense for me to get the $20,000 dollar bond, and pay a couple hundred bucks a year to get a piece of paper that says I can do what my references already say I can? I carry insurance, and I always meet or exceed code, and I'm not building houses, so why in the world would I carry a license?

          10. Ryan_C | May 30, 2001 12:46pm | #14

            *It's easy to find a licenced contractor. From what I've heard from my customers, it's hard to find a contractor that's dependable, shows up on time, does a good job, is easy to get along with, and listens to what you want done and tries to please.I think the second is worth more than the first.

          11. Greg_Warren | May 30, 2001 02:52pm | #15

            *In California, you cannot apply or purchase liability or workmans compensation insurance without a license. Your job is all about liabilities. Injuries and damage to property. Roofers fall off roofs at times, and a leaky roof can creat alot of damage. Don't touch this guy with a ten foot pole. You could end up remembering him for a long time and that would have nothing to do with the reason you first hired him. GW

          12. chanle51 | May 30, 2001 03:05pm | #16

            *All - Thank you very much for the feedback on my question - your insight will prove extremely helpful.CJH

          13. G.LaLonde | May 30, 2001 03:52pm | #17

            *If he doesn't have a license, you have no grounds to take him to court if he: does a bad job, takes off with your "money down", doesn't finish because he estimated wrong and is now working for nothing, gets hurt and sues you. On the other hand, he can do the whole job and not get paid and then he doesn't have a leg to stand on either! If his "personal" insurance finds out he files a claim while working commercially on your job, you can forget collecting anything. I agree that a license says nothing about the contractor's competence, but all it takes is for one thing to go wrong and you will pay the price bigtime with the legal/insurance problems...It happens every day, so don't say " Oh, this won't happen with this nice guy" I've seen stuff like this turn sour so many times. You have to decide if you want to play the odds.

          14. bobl_ | May 30, 2001 04:34pm | #18

            *http://www.state.ma.us/bbrs/Hicsearch.htmuseful info from state

          15. Lance_Moody | May 30, 2001 05:14pm | #19

            *I've been on a repair project for over a year now. The project is a large log home and its grounds. The home was- ostensibly- "completed" more than 2 years ago for something around 800k. This place had a multiplicity of problems having to do with every system and assembly. All work was done under license. The problems were due not only to lack of technical expertise (which was substantial,) but also to communication issues between the owner, architect G.C. an subs. The owner decided to pull the architect early into construction in deference to a Good Ole' Boy G.C. who sold the owner a bill of goods. The arch. out of the loop, the owner gets distracted onto something else, making occasional visits to "save a little money." In essence, the owner ended up exerting pressures which coupled with lack of principle, psychological savvy, and technique led to a poorly realized design frought with every type of problem. In the end, the owner's lack of desire to go after the responsible parties for remuneration in the face of remedies they refused or were unable to supply spoke reams about his feeling of complicity in the outcome. In other words: licenses can mean a lot or a little, the relationships in the end will imply far more except perhaps in the most totalitarian jurisdictions where the system has interposed itself thoroughly enough to skim off every interaction.

          16. John_Steinke | Jun 01, 2001 03:23am | #20

            *There is more to contracting than construction. If this guy doesn't pay the supply house, you can find yourself paying twice- once to him, once to get the lien lifted.If you really want him to do the work, hire him as an employee, deduct taxes, etc; or hire him through a temp agency.

          17. Mike_Smith | Jun 01, 2001 04:21am | #21

            *mass. has two licences... Home Improvement Contractor...and Construction Supervisor..if he's serious about being in business... tell him he's got the job ...conditional on him getting his license and his insurance..if he can't handle that... why would you want him?

          18. xJohn_Sprung | Jun 01, 2001 05:01am | #22

            *In California, you need four years experience as an employee of a licensed contractor before you can take the exam for a license. In spite of that, there is still a substantial and harmful minority of fully licensed incompetents. There are also those who get a fraudulent certification of the four years and pass the written test. Nothing about a license guarantees the honesty of the holder. There is a little bit you can learn from the license number. A low number means that the person has been around for a long time without having the license revoked. However, there are good people who have been bumped to a high number because of a dispute in which the client was in the wrong, but won anyhow.Here, licensing only applies if the contractor pulls the permit. As an owner/builder, you can pull your own permit and take your chances on anybody you want to hire.The law nationwide is a total hodgepodge in this area, and none of the above will apply anywhere else.-- J.S.

          19. Mark_Fritch | Jun 02, 2001 06:59am | #23

            *I know people who are competent tradespeople who are not licensed. In Oregon, it is not a guarantee of skill, ability or honesty. What it is, however, is a means of tracking to see if a person has complied with a bond that you can draw against if they fail to do quality work, it means they have liability insurance to cover the unexpected, that they have worker's compensation to cover an injured employee and that they are registered with the IRS and Oregon Department of Revenue. There is no guarantee that a builder is telling the truth in these matters and their coverage sometimes lapses. You will find that out as soon as you call to check. As a homeowner, I would want that protection. I build high-end, handcrafted log homes. We had another builder that was so sleazy that he cost a number of people hundreds of thousands of dollars. One house he built was appraised at $0.00, yes, $0.00 value an not placed on the tax roles. He has since left the country and the homeowner was hit with all of the back employee taxes, worker's comp and this was all after they had invested $380,000.00 (in 1990) for their retirement dream. No, a license doesn't guarantee much. But checking to see if this guy was reputable would have saved them a lot of grief. My work is still hampered by building officials that are still smarting after the courts hit them with the maximum allowable fine of $50,000.00 for having allowed this to happen in the first place. The bottomline is that everyone who is reputable pays for those who aren't. I don't like to pay the price either. It costs me about $5,000.00 a month just to stay in the game before I even pick up a saw. What it does give me is the ability to look a client right in the eye and tell them they are fully protected if, God forbid, anything serious ever does happen. I would rather charge a bit more to cover the cost of the "dues" than to have someone hurt. Do I like paying all the money? No, but I would like it even less if one of my clients was hurt. Another point; in Oregon, if a person is unlicensed and does any work for hire, the client can refuse to pay for the labor and the materials, tell the builder to take a leap and the builder has no recourse whatsoever. The rules do make it tougher, but I think we are all the better for it. It's a matter of integrity. If you don't like the rules, either work to change them so they are more workable or go somewhere else where there are not the regulations. Oregon is quite expensive to live in, but I wouldn't trade it for anything.

          20. Dave_Hallenbeck | Jun 02, 2001 05:33pm | #24

            *Here in Maryland, the home improvement commission occasionally runs ads which seem to imply that unlicensed contractors are incompetent. I don't think that this is necessarily true. Big brother just want's their cut of the action. I know many competent tradespeople who shy away from doing work on their own due to the onerous licensing requirements.

          21. Mike_Smith | Jun 02, 2001 05:38pm | #25

            *dave.. how onerous can it be?here's an occupation that you ar going to do for 45 years or so.. almost every other profession that interfaces with the public has licensing.. from barbger, to hairdressers... to lawyers.. to long distance truck drivers...why shouldn't a guy or gal who is goint to be handling your most valuable asset.. be licensed?

          22. Don_Berinati | Jun 02, 2001 06:22pm | #26

            *The main point in this discussion is that the licensing system and all its appurtenances don't work very well. The general public believes licensing guarantees some degree of quality, competence, and responsibility. Not so. Liability insurance is expensive, in some places impossible to obtain and has massive exclusionary clauses, workers comp is very expensive and a very poor replacement to a good health insurance program. The awkwardness of the system leads to pervasive subcontracting to avoid both liability and workers comp premiums, and eventually leads to paper contractors who know nothing of building (and don't care) but alot about accounting. In the end, we have structures built by 27 subcontractors who never have to follow their own work, many of whom hire aliens and pay them next to nothing, let alone any benefits. The people on this discussion, including myself, a licensed general, who object to licensing the way it is run now want it changed, and they don't see how it can be changed by everyone joining the 'club'. Positive change will only come when people resist those systems they see as wrong.

          23. FredB | Jun 03, 2001 07:20am | #27

            *Nope Don the main point of this discussion is not that the licensing system doesn't work! The main point is that a license shows the prospective contractor has respect for the rules. Further that he probably has the proper insurances and bonding.Push come to shove isn't that what chanle51 and everyone else wants? The customer stands the best chance of getting the job promised if his contractor has the mindset to follow the rules, to do things right. If the job goes sour and the contractor has followed the rules the customer has some recourse to insurance and bonds.Yeah, everyone knows that a license doesn't guarantee quality work. We have beat that to death here in the past. That is what references and a good contract are for. We also know that in many places licenses are just a revenue source for the government. But lets' fight that out locally where it can be taken care of.Here, lets remind the customers that if a "contractor" doesn't follow the basic licensing rule then who knows what else he isn't doing when building your place? Plus, if he is unlicensed; in many states that means all the liabilities that would normally be the contractor's fall on the homeowner. That can be a Real Downer if there is a problem!So, chanle51, if there is no license don't even check references, send him down the road. There are lots of licensed folks just dying to do business with you..

          24. Luka_ | Jun 03, 2001 09:01am | #28

            *I just want to know where I can get a job as a barbger ?

          25. Phill_Giles | Jun 03, 2001 09:20am | #29

            *Given the wide variations of the meaning and the requirement for licensing from place to place; isn't the major message here for the consumer to find out what the rules are where-ever they live and then go armed with knowledge ?

          26. Mike_Smith | Jun 03, 2001 11:48am | #30

            *luka.. did you try the jello pages .....u cud look it up...

  2. chanle51 | Jun 03, 2001 11:48am | #31

    *
    Hello -
    We are in the process of taking bids for the installation of cedar claps and new construction windows on our home in MA, and have found a contractor we are interested in who has a tremendous reputation. Problem is that they are just striking out on their own and while insured by their personal policy, they do not have a state license (yet.)

    Gut instinct - given our interactions and stellar references with/from the contractor (who works solo) is there should not be a problem. If we go with this person, are we going without a safety net here? Also, will their personal policy cover our liability on the jobsite - and what if he brings in a temporary helper.

    Thanks much in advance for any insight.
    CJH

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