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California Laws on Hiring Unlicensed Contractors

Protect Yourself Before Hiring

 Due to a variety of different reasons, including cost-related, hiring an unlicensed contractor to undertake construction work might seem to be an ideal option, but this is not the case in California. In this state just as it is with other states in the United States, there is a strict law present prohibiting such action from taking place. There are several consequences that a property owner and an unlicensed contractor might face, hence why it is suggested not to consider the services of an unlicensed individual no matter how much experience he or she might have under the belt. Contrary to popular belief, just because an unlicensed contractor has experience, this does not mean you would be in good hands. This is not a guarantee under any circumstance. 


 

Consequences for Hiring Unlicensed Contractor

Property owners play a part in the underground economy when they opt to hire an unlicensed contractor; thus, they also might suffer consequences. The property owner can find himself in hot water due to not complying with OSHA safety regulations of California. In case an unlicensed contractor has an employee who ends up being injured in the property owner’s space, this individual could file a lawsuit against the homeowner due to violating the law of hiring a contractor without a license. There are numerous individuals who thought their homeowners’ insurance would aid them in their legal matters, only to find out this was not the case. There is no way insurance would be able to help you if the accident that occurred revolved around an illegal situation.


  

WHAT ARE THE ADVANTAGES OF HIRING AN UNLICENSED CONTRACTOR?


1. Well, there is only one “advantage” to hiring an unlicensed contractor, and that is the price. Hiring an unlicensed contractor in California is typically much cheaper because they don’t have to pay many of the fees that go along with doing a job up to code, with a license.


2. Getting a contracting license in the first place is expensive for these trade workers, who then must pay annual fees to keep their license active. They then need to acquire the necessary permits for certain jobs and make sure their work is up to code. 

3. They also need liability and workers compensation insurance to protect themselves and their employees. If someone gets hurt while working for you, you may be liable.


4. Unlicensed contractors don’t have any of these financial burdens. They are uninsured, are not able to require permits, and may not even do the work to code specifications. More risk is involved, but there is much less overhead they need to pay, which enable them to charge a much lower rate.


5. Unlicensed contractors do not use quality materials; use less than required materials; have no professional training or knowledge of codes.


An unlicensed contractor may be someone you found online, but is often a referral through a friend, family member, or neighbor. Someone “knows a guy” who can do the work for you for much cheaper, and the desire to help a friend while also getting a lower rate often leads to the unlicensed contractor being hired.

Maintaining, updating, and repairing a home is expensive enough, so it makes sense to want to find the lowest price to get the job done. However, when you consider the financial risks you are taking by using an unlicensed contractor vs. a licensed contractor who has no workers compensation or liability coverage, you may find that if something goes wrong, it isn’t cheaper at all in the long run.

Here are some precautions to follow

  

· Ask for the Contractor to show you their Pocket License. Do not settle for a license number as they can always write a valid license number from the Contractors Licensing Board Page and use it as their own.


· Make sure they put everything in writing. By law, all licensed Contractors are required to submit a contract that spells out all materials, including quality and amounts, the scope of work and dates.

 

· Avoid paying in cash, provide more than 10% of down payment, and paying for work that has yet to be conducted.

· To play it even safer, go ahead and read the online reviews that the contractor who has caught your eye has garnered from past clients. 


· Once you decide to hire your licensed contractor, request their Liability and Workman’s Compensation insurance. 

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