You’ve probably been told how important it is to hire someone who has the right licenses required for that specific type of home improvement project, and it couldn’t be more true. It is extremely important. By getting the work done by correctly licensed contractors near you, you’re securing yourself again financial liabilities if anything goes wrong on the job.
Whether or not a contractor needs a license depends on different factors, such as the type of service you’re looking for and which state you’re living in. License requirements for construction and remodeling vary by state, and we’re not surprised if you have trouble finding out what the specific requirements are for your project.
You can find the specific contractor license requirements for your state on our website – simply visit the link. Generally across states, both plumbers and electricians need to be licensed on a state level, versus a city level.
What makes it so confusing is that there are basically not two states in the US with the same requirements when it comes to contractor licenses. Some states, such as California, basically require any type of home improvement pro to be licensed at the state level, while others don’t. Most, however, will at least require a couple of different trades to be licensed at the state level. The confusing thing is also that the requirements in many instances vary by city too.
Obtaining the Right Licenses
How it usually works is that a contractor will be required to register and apply to take the relevant exams, and is then licensed with the board of contractors in that specific state. This includes that the pro is able to show that they have the minimum requirements in terms of experience, bonding and insurance that is required by the level the contractor is licensed on, be it state or municipality. The requirements typically involve the specific amount of experience required. What makes it even more confusing is how licensed general contractors are required in some states, while other states don’t provide licenses for general contractors, which you would assume given their importance.
There are also states where the need for a license is dependent on the size of the project, excluding a license requirement from really small projects. This is at least the case in both New York and California.
Getting a licensed contractor to bid on your project is a way to ensure that the person has at least met the minimum requirements for insurance, which makes it a lot easier to deal with when an accident of any kind happens.
By ensuring that you’re working with someone who is actually allowed to do the job they’re saying they want to do, you are protecting yourself. You may be tempted to choose the contractor who presents himself at your door and offers what seems to be a good deal, however, chances are it isn’t a good one and that you aren’t protected in that case.
Different Licenses for Different Trades
Simply because a contractor has a specific type of license, it doesn’t mean they’re allowed to perform work in a different category. HVAC work is very different from the work done by roofers, and they therefore often require different licenses.
Two different trade licenses will often have completely different minimum requirements and license categories, and you therefore can’t simply assume that the same requirements apply for different trades in the same state. They’ll also generally have different requirements when it comes to exams. It could be that the contractor possesses the necessary knowledge to do the job, but doesn’t have a license, which simply wouldn’t suffice. The right licenses are your insurance that the job will be done, and done well.
Bonding – What Is It And Why Is It Important?
Most states require a large number of their different contractor to carry bonds in order for them to be able to obtain the required licenses. By getting a surety bond, the contractor is basically insured in case the work is not completed, or completed incorrectly to protect you as the homeowner.
Again, it’s the different states that determine the requirements for bonds, and again, it may even vary on city level. When you either have questions about licenses prior to hiring a contractor or later on if something goes wrong, it’s the contractor board in that specific state that are generally the best people to contact. Before engaging in a contract with a home improvement pro, make sure that you know which contractor board you will need to contact if something goes wrong.
Another reason that a bond is so important is that the contractor could be ordering a lot of supplies to your home without having paid for them, and the bond will protect you in that instance. If there are damages to your property as a result of the work with a contractor, either to the work they performed or another part of your property, perhaps because they dropped a lot of heavy materials on your floor, it’s also the bond that you will be filing against.
This works a lot like an insurance in the way that the contractor will have to pay premiums in order for the bond to remain valid, and they will often vary depending on the work that the company has previously done.
If you believe you deserve monetary compensation when work has been unsuccessfully delivered or due to one of the other reasons mentioned above, it’s often a good idea to get in touch with the contractor board and have them help you, but it will also require that you get in touch with the company that issued the surety bond that will then have a process they use in those instances, where you generally have to provide more information on why you are seeking this monetary compensation.
To find out if the contractor you are considering has a bond, you will need to obtain what is called a bond certificate. The issue with both bonds and licenses is that they’re not valid indefinitely, and you will therefore need to make sure they’re not expired. As you can imagine, if the contractor does not keep paying the premium to the surety company, they won’t keep ensuring their work.
By hiring contractors without the necessary licenses, bonds and insurance, you’re opening up yourself to a world of financial risk, and it’s best not to even consider unlicensed contractors. It might seem like a lot of work to make sure that the desired company has all these different things, but it’s insurance for your own sake.
When the time comes to select between different contractors, you will want to make sure that the license, insurance and bond are still valid, which includes contacting the different issuing companies, and these may have different policies or ways to do so.
It’s a big decision to hire a contractor and therefore one where you want them to have the right insurances.
Dealing With Potential Scams and Fly-By-Night Contractors
The construction industry is still considered the Wild West by many given the severity of the issue of dealing with contractors scams. We wish we didn’t have to write this section, but reality is that a lot of people end up having a bad experience with whatever home improvement project they need to have done.
The best case scenario is that your bathroom remodeling project that was intended to be done within a month is now dragging out and is on its 4th month, although not ending up costing you more. Yes, it’s annoying being in the middle of a major home improvement project and having to readjust all your daily activities to be dealing with it, but at least in this scenario you’re not ending up having to pay more money as a consequence of the delay.
Another type of story that we often hear involves contractors showing up at your door, and they promise you all sorts of things, even at a rate that seems very tempting to go for and you end up making an agreement with them. They start selling you a story about why you need to make a big upfront payment even if there aren’t even any building materials that have made it to the construction site yet, and once the upfront payment has been paid, they have been completely unreachable. You’ve now paid $1,500 to someone tat isn’t returning your calls, and you’re unsure of what you can do. The fact of the matter is that there’s often very little that you can do, and you’ll likely end up never seeing any of that money again. It sucks, but you can’t do anything. You got fooled by a fast-talking pitcher and he caught you off guard.
Yet another scenario is that you signed with a contractor for him to come and repair things in your mobile home or perhaps repair the floor in your RV, and it started out all great. The contractor showed up on time, kind of. Everything looked good in the beginning and the team started working on your project. No red flags yet. Suddenly something was dropped on your tile floor, and it cracked as a consequence. Although durable, dropping heavy items on ceramics still has the possibility of causing cracks to a floor. They’re telling you you will need to pay more money than you initially agreed to and you accept, because you just want to have it fixed so you can get on with your life. The next thing that happened is that they made a dent in your drywall, and you know that you will be noticing it every time you pass it, because it’s definitely not discrete. At this point you’re starting to get a little bit frustrated, and over time the cost just seems to be piling up. There’s always an excuse, and something was apparently wrong with the materials that you received. When you try looking them up online, you either don’t really find much or you find a bunch of negative reviews, but you definitely paid more than you should have and the final project ended up costing you 40% more than it should have.
All of the above mentioned scenarios happen every single day to the homeowners we talk to. The excuses from the contractors are many and the fixes and solutions seem to be fewer, or at least more expensive than initially anticipated.
There are things that you can do in order to minimize having such experiences as a consequence of your home improvement ambitions. There are certain things that these contractors typically have in common in the way that they approach getting your business.
They Won’t Ask Probing Questions
Probing questions is a good thing. What it means is that you’re dealing with a person who is actively engaged in understanding your needs and desires. You don’t want someone that will simply agree with you and deal with the consequences later on. You want them to actually understand the project that they’re bidding on because they obviously also need to make money on the project for it to be worth their time. It only makes sense. It simply shows that they take their reputation seriously and that their processes reflect the challenges of the project.
They Might Ask for Upfront Payment and Offer a Discount in Return
There’s a reason why you should embrace contractors that encourage you wiring them the money. If they insist on cash, that’s usually a warning sign that they could be doing something sketchy, and that you might want to avoid working together with them. While it’s not the case for all of them, it could be an indication that they’re clearly not licensed to do the work they’re offering. Or it could be an indication that they’re doing something that is straight up illegal.
Offering you a discount when you pay upfront could either be an indication that their company is almost bankrupt and really needs the cash, and that could mean that they’re stacking projects on top of each other trying to make it through their financial struggles. At best, your project will get delayed as a consequence. At worst, they have no plan on actually carrying out the work and that they have plans of evaporating when the money’s paid. And you have no paper trail to show, and they’re not registered anywhere either so there’s no one you can go to to try and recoup that money.
Even if they deliver the work, you have no paper trail and once you try to sell the house you discover that none of the plumbing was actually done with the building codes in mind. You now have to find a new and quality plumber to remove all the previously done work so that it can pass the necessary inspections.
How do you avoid some of these things? Always avoid people that are too insisting on having you pay a large amount of the money upfront, and make sure that they have a local presence such as a permanent address. Check out their website. Contractors in this day and age should have a website as it actually shows that they take their business seriously too. Going with local contractors is also what you will want to do. Think about it. They won’t have to travel as far to get to the construction site, and this should also mean that they’re able to offer more competitive rates too, so if someone with their base 100 miles from you is suddenly offering their services, it could be a bad sign.
What’s worse is also that you can easily become liable for injuries to workers working on the construction site. There have been cases where a homeowner have been forced to pay huge sums of money to contractors that didn’t have the necessary licenses when injured and you don’t want to end up in the middle of a law suit simply because you want to have your kitchen remodeled.
Leftover Materials At a Very(!) Attractive Price
While you want to get the work done at the right cost, and ideally even save money on your home improvement project, it should still be done with quality materials. There are materials such as maple flooring that may be available as reclaimed materials, but in a lot of cases, leftover materials offered by the contractor at a low cost should also at the very least get you thinking. If they’ve been positively reviewed across the web and all their references check out, they probably mean well and there’s nothing to worry about, but there are also cases where this is an attempt to fool you when done by less than trustworthy contractors.
When so called leftover materials are offered, there are a couple of different scenarios that tend to happen slightly too often. One of them is that they’ve been stolen and that’s how they’re able to offer them to you at such an attractive price. Another option is that they’re significantly worse quality than what you were hoping to have installed. Vinyl siding is one of those materials where the quality is largely determined by the thickness of the material, and if you get material that is thinner than what you had agreed on with your contractor, it’s more prone to getting damaged, and you might not necessarily be sufficiently trained to be able to spot if it has the right thickness or not. And when that first serious storm hits and you’ve suddenly ended up in a situation requiring significant repairs to your home’s siding because of low quality material, you’re left having to foot the bill.
Be Wary or You Might Receive Angry Calls From Suppliers
Paying a fee upfront and losing that sucks, but another possibility is that you could even end up receiving angry calls from suppliers that aren’t happy, because they never saw any of that money they were promised, and it can even be subcontractors too. Suddenly you’re finding yourself in an iffy situation of who you have to pay and the possibility of a lawsuit is starting to look very real.
The bad reality is that if your contractor doesn’t have the necessary licenses, you could end up getting sued as a consequence, and you’ll now have to pay whoever is coming after you. You might have willingly paid the contractor thinking everything was going well, and at the end of the day no one was getting paid except the guy you sent the money to.
Again, going with an established company that is local to your area is a better way of ensuring that a situation like that won’t happen, and especially a contractor that cares about their local reputation.
Someone That is a Bit Too Eager Getting You To Sign Right Here, Right Now
Some contractors may give you an estimate on the project that is only valid if you make up your decision right now, or they promise you the price will likely go up. They know that you also want the best price, and if they can convince you to believe you’ll pay more if you wait, that you’re more likely to also sign. This urgency also means you’re less likely to be able to do the due diligence and look into the company that is offering their services – you end up losing because they’re in fact a company you would have never gone with in the first place.
You want to go with a contractor who in fact has your interests in mind, and not just being pushy about you signing. They should give you the space and time necessary to make sure you actually make the decision that makes sense for you. They understand that you might have someone else that you need to talk to over a glass of wine before you make up your mind about a $20,000 project.
They Won’t Be Securing the Necessary Permits
A lot of home improvement upgrades require that permits are secured, and it is often the city’s building department that determines which types of jobs require these permits. When you’re dealing with a contractor that doesn’t have your best interest in mind, you’re likely not getting someone that will make sure that they secure the necessary permits either. When you start messing with the structure of a house, for instance, most states will require that you obtain permits for that kind of work, so if the construction framing is involved in the job description, the contractor himself should be mentioning the importance of securing permits.
A good contractor will also offer to get the permits for you since they know you’re not familiar with the process, which is completely understandable given that you only very infrequently go through projects of such scope and complexity. Since different states also have different permit requirements, that is yet another reason to go with a local contractor who is used to dealing with the building department in your cit and can ensure that the project is off to a good start and that it won’t be delayed because of practicalities like not getting the necessary licenses.
The fact of the matter is that you need to be prudent when you’re signing a contract with a contractor.
Why Contractors Choose to Get Properly Licensed
The decision to get licensed is one that contractors will take very seriously. While it may be a requirement in some states, a license can also end up being limiting to the scope of the work that they wish to do. In a lot of states, a contractor can do work up to a certain value without the need to be licensed, but once they get a trade specific license, they’re forced to do work in that specific category for a long time to come, and some of them don’t want to do that. One of those states is North Carolina, where the contractual limit is fairly high before the contractor needs to get a license, at least in some trades.
Because of the difficulty in obtaining a license, it also needs to be worth their time and money. It’s an investment in their business to get such a license, so it also needs to be a decision that makes sense for them. They need to evaluate the situation and determine that they will end up making more money as a consequence, especially if it ends up limiting them to only a certain amount of trades by going down that route.
If they’re not per se required to have a license for the work because of the size of the contract, but they still chose to get it, it’s obviously because they wish to make sure that them having it signals to you that they can be trusted and that you should hire them because of it. Can you expect to pay more for a licensed contractor versus one that isn’t licensed – quite possibly, but will the ride be smoother and the result be better? Definitely.
The Importance of Always Personally Checking the Validity of a License
Contractor licenses are usually only valid for a certain amount of time, and some of them have to be renewed as frequently as every year. A failure to renew the license would in fact mean that you’re hiring an unlicensed contractor, and that’s why you always have to actually make sure that a license is still valid. A state like Florida makes it very easy to check licenses with the database that they have established, whereas other states it will be a bit harder to actually ensure that the contractor has the right license and that it’s still valid. For some states, you might need to go on the specific city’s website where they have posted a list of the currently approved licenses for the different categories in that region. It’s not always easy, but it’s necessary.
Besides the fact that a failure to renew their license could be a problem, another possibility is also that a contractor has had their license revoked. If that’s the case, you really shouldn’t be working with that contractor because it would indicate that there’s been a serious problem, because license boards won’t simply revoke licenses for no reason.
Since licenses often limit the scope of the work they’re allowed to provide, you also know that you’re getting a contractor who is specialized in exactly the type of work that you’re requiring them to perform. If they ended up getting a roofing license, they also know that they’ll end up spending a lot of time fixing those pesky roof leaks that can otherwise lead to significant amounts of water damage.
We hope that this article has given you a better insight into the possible issues of not ensuring the right licenses have been
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