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Do Not Hire an Unlicensed Contractor

Do Not Hire an Unlicensed Contractor

Mar 11, 2020 10:00:00 AM / by Don Magruder, CEO RoMac Building Supply

Throughout Central Florida, the recent number of arrests of contractors doing business without a license has been vast. Unscrupulous contractors who disregard the law combined with homeowners who only focus on the lowest price is a bad combination, which typically ends terribly. In the state of Florida, it is illegal to operate as a contractor without a license. It is also illegal to knowingly hire an unlicensed contractor.

It is the responsibility of the homeowner, or the person engaging the contractor, to verify they are hiring a licensed and insured contractor by asking for current license and insurance information. If you fail to verify the person or company that is doing work on your property is properly licensed, you lose a lot of protection under the law.

The first and most important protection is liability. Most unlicensed contractors do not carry workers’ compensation or general liability insurance. If they do not carry workers’ compensation and the contractor or one of their workers gets hurt on your jobsite, you are responsible for their medical claim. If they do not carry general liability insurance and the contractor or one of their workers destroys or damages something during the construction process, you do not have a remedy for getting reimbursed for the damages.

Typically, unlicensed contractors do not have contracts. Even worse, they usually do not have assets. Therefore, if deposits are stolen, work is not completed, or the work is halfway done and they are holding you hostage for more money to complete the job, you have little remedy under the law. By hiring an unlicensed contractor, you are just as guilty as the contractor in violating the law. You can bet the unlicensed contractor will tell law enforcement that you knew they were unlicensed, and in many cases that holds true.

There are times when an unlicensed contractor will order materials for a job and the homeowner will receive a document entitled “Notice to Owner.” This document requires that the homeowner verify by lien release that the contractor has paid that bill before final payment is made. Oftentimes, the unscrupulous contractor will tell the homeowner to ignore the Notice of Owner as just paperwork, leaving them holding the bag for thousands of dollars in other costs because bills were not paid. An ignored Notice to Owner can escalate to a Claim of Lien, or worse yet—foreclosure.

What most homeowners fail to understand is that legitimate contractors and subcontractors pay a lot of money to be legally licensed and insured to do business in the state of Florida. Plus, nobody has a magic wand they can wave where good labor is cheaper than others.

Here is what I am really trying to say—if you get a bid from three contractors and two of them are close, but the third one is a lot lower—you should check their license and insurance. Many times, the lowest bidder who is significantly lower in price is working illegally. Now, if you find the low bidder is legally licensed and insured, it would be a wise move to verify the scope of work on the bid. An honest mistake on a bid can prove to be a very divisive problem once the job has started.

Here are the important takeaways. It is your responsibility to verify that every contactor that works on your construction project is properly licensed and insured—anything less is unacceptable. If a contractor asks you to pull the permit or advises you to not notify the building department of your project, run away from them. Your biggest asset is your home. Do you want someone working on it illegally?

Don Magruder is the CEO of RoMac Building Supply, and he is also the host of the “Around the House” Television Show, which is hosted weekly on Lake Sumter Television. For more information, go to www.Aroundthehouse.TV.

Topics: projects, contractor, DIY home building, construction materials, Hiring a Contractor

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