Licensed vs. Unlicensed Contractors

Archived Q&A and reviews ▼

Archived Q&A and Reviews

Using an unlicensed roofer

Nov 2008

Please let me know the ''cons'' of using a roofer without a license. (There are related questions in the archives, but I don't see exactly this). I got bids from two licensed contractors--very efficient, professional, expensive. Polite but not a lot of discussion of options, very busy--basically they want to do everything 1000%. A gutter guy came and contradicted a lot of what they'd said. So now a great fellow came--experienced, professional, willing to work with materials up there that can be salvaged,said the same as what the other ones said but with more specifics, etc. etc.--the only thing is that he isn't licensed. I had an unlicensed fellow do landscaping for me that worked out fine. But a roof is a big job. Are there consequences in terms of...I don't know what...insurance, self-employed taxes, selling the house, etc. that I should stay away from? He needs the work, I don't have a lot of money, and he's recommended by a gardener who has worked for me for some years. Of course I want to say yes to him, but...should I? Needing Cons to Balance My Pros

Sometimes an unlicensed worker is fine. But, there are more unknowns and more risks. Sometimes they are complete charlatans and crooks.

The most obvious drawback is that you have no recourse if things turn sour - he doesn't do the job well, he quits, he doesn't stand by his work, etc. You are just out of luck and probably out of money. I've had friends use unlicensed workers for big jobs (foundation) and it was a disaster, and they just had to eat the money they had already paid him, and then pay a new guy on top of it. Of course, there are many stories where it all worked out fine. It's a lottery.

The less obvious thing, which may not matter to you, is that you are knowingly hiring someone who is deliberately breaking the law. If he has helpers, they will not be covered by worker's comp insurance, since you need a license to get a policy. If they get injured on the job, then what?

If he has no license, he has no liability insurance. This is not against the law, but it may matter to you. If he screws up the job and damages something, or injures someone, there will be no insurance to pay for those things. It will fall to you the homeowner, unless he chooses to make good from his own pocket.

If he has no license, he will not pull a permit for the job. Technically, of course, a new roof is supposed to have a permit. Many people don't pull them because then they raise your taxes. This didn't used to be a problem, but when real estate is tighter, it may degrade the value of your improvements a little if you have done them withoout permits. I know this can be a big deal for something like an addition, since there is always the possibility that the city will ask you to remove the unpermitted work. I don't know if this has ever happened for just a reroof.

Maybe you could find out from him why he doesn't have a license. If he's good, and has a lot of experience, and knows his business, he could get a license. Why hasn't he?

And maybe you should get more than two quotes from licensed contractors. Of course their quotes are more than the unlicensed guy's - they are probably paying for worker's comp insurance and liability insurance and all the things that protect you and the workers that the unlicensed guy does not want to pay for.

Licensed contractor vs. "contractor"

March 2004

Reading the post about problems with a ''contractor'' who had been recommended, I'd like to say a few words about Contractors, & ''contractors'' (I'm a Contractor myself).

A ''contractor'' is only a Contractor if they are licensed by the State of California Contractors License Board. A properly Licensed Contractor (LC) is required by law to give you a written proposal & contract with a full job description, any terms & conditions, & dates of work. It also must include specific legal language that protect both the homeowner & the Contractor. To become a LC, you must have proven experience in your field, & pass written tests on contract law & your own specific trade. An LC is also likely to have Liability & Workers Comp Insurance. Anyone who does a job of $500. or more is required by law to have a Contractor's License.

Many people present themselves as contractors who are not licensed. Homeowners may be attracted to these people because they think they will get a better deal, which is not neccesarily so. As the poster said, she is now having to pay someone else to fix the bad job she already paid for. The great majority of LC's give a warranty on their work. Plenty of the unlicensed people charge as much as LC's, they're just pocketing more profit since they aren't paying insurance costs, payroll costs, & maybe not even taxes.

What looks like a bargain isn't necessarily a bargain! Not all LC's are good, or even honest, but if you have a proper legal contract, that is quite specific with little room for misunderstandings, you have legal remedies if there are problems (so does the contractor if she/he does the proper job and you don't pay for it). Never trust anyone who tries to rush you into a project, & have as much discussion as needed to be sure that you understand exactly what is to be done & with what materials before you sign anything and/or put down a deposit. Cecelia

1998

I would encourage everyone to be very careful about hiring people who are not licensed, bonded, and insured. If they mess up your house (break your window, disappear in the middle of the project, etc.), you have little or no recourse. Finally, the state contractor's license board has an 800 number you can call and punch in the contractor's license number to check if there are any complaints or actions on a certain contractor (ANY type of contractor: general, earthquake retrofitters, painters, landscapers, etc). I think this is a good idea. Laura Beth