Q: My neighbor and I share a fence that needs to be replaced. The neighbor has a “contractor” he wants to use. The price is quite cheap. The man submitted a contract with his license number on it. However, I checked with the state contractor’s board and found out he no longer is licensed and has no bond or insurance.
I told my neighbor that I had concerns about liability if the man got hurt on my property. I then got an estimate from my contractor. Mine is licensed, bonded and carries workers’ compensation. The estimate was almost double the first man’s figure.
I tried to explain to my neighbor about why a licensed contractor is more expensive — overhead, use of high-quality lumber and the like. My neighbor still wants his friend to do the job, but I am not budging.
How can I address this issue without causing bad feelings?
A: We think the best thing to do would be to build the fence yourself. You would not only save a bunch of money, but you would gain a lot of satisfaction.
If you’re unable to build it yourself, avoid your neighbor’s “contractor.” No license, no bond and no insurance means no job. Especially troubling about your neighbor’s friend is the contract he submitted with a license number, probably assuming neither of you would check. It’s one thing to state that one is unlicensed, it’s quite another to mislead a potential customer. In our view, this is a material misrepresentation constituting fraud. You can be commended for doing your homework. By law, if the total cost of a project exceeds $500, including labor and materials, a license is required.
As for avoiding bad feelings, sit down with the neighbor and visit the California Contractors State License Board Web site. There he will find that giving his friend the job could subject his friend to jail or a fine.
We’ve said it’s OK to hire unlicensed workers to do small, handyman-type projects. If the job costs less than $500 including materials, you know the worker and the quality of work, trust him or her and pay by the hour, this may be OK. But even then we’d be wary.
When you hire someone like this, you are the employer, and if the worker gets hurt on the job, you could be liable. While it might be all right to risk having an unlicensed master electrician change out a light fixture, for example, get the licensed electrical contractor to install the new 200-amp sub-panel.
A contractor’s license does not necessarily guarantee the quality of the work, but a license in good standing does guarantee that a bond is in place and that there is some recourse at the California Department of Consumer Affairs if something goes wrong.
The $500 ceiling requires the contractor to be licensed in the trade or occupation of the work. A general building contractor with a class B license may lawfully perform carpentry projects. This would take in your fence job even though there is a specialty license for fencing contractors.
There really is no good reason for a legitimate tradesman to avoid getting a license. Qualification for a contractor’s license requires: no formal education; four years of experience in the trade for which licensure is sought; $2,500 in operating capital; and a contractor’s bond of $10,000. The initial application fee is $250, and the initial license fee is $150. The license renewal fee is $300.
Liability insurance is extra and workers’ compensation insurance is required only if the contractor has employees. A few thousand dollars is a small investment to get into business legitimately.
The unlicensed contractor is also taking a significant risk. In the past it was easy for unlicensed contractors to operate in California. Not so anymore. The Contractor’s State License Board has instituted a Statewide Investigative Fraud Team (SWIFT), which has recently conducted sting operations in Orinda (Contra Costa County) and in Carmichael (Sacramento County).
SWIFT agents, posing as homeowners, caught around two dozen unlicensed individuals who gave bids for work ranging from tree trimming to concrete-swimming-pool construction. Offenders were given a “Notice to Appear” in Superior Court to answer to charges of contracting without a license. Conviction carries a maximum of six months in jail or $1,000 fine. A second offense carries a 90-day jail sentence.
You’ve also raised another red flag — the difference between the two bids. Almost double seems pretty excessive. Either your guy is way high or the neighbor’s guy is way low. We suggest you get another bid or two to help determine the market value of the job. When you do, make sure you’re comparing apples and apples — same scope of the work and the same quality of materials.
If you can’t build it yourself, go with a licensed contractor who is bonded and insured even though it costs more. The risk to do otherwise is just too great.