Q: I am planning a kitchen remodel. Based on all the bids, I have short-listed two contractors. One is a licensed general contractor who has given me good references; the other is an unlicensed one who says he will get the job done by himself and his family members. His bid, for the exact same materials that I want him to buy from my chosen wholesale suppliers, is almost 30 percent less than the licensed contractor’s. The unlicensed guy has given me good references as well.
If I employ the licensed guy, he is willing to do all the permit work himself and has given me a full quote including those costs. The unlicensed guy says I can get the homeowner-builder permit myself, and he will ensure full building-code compliance and that the work passes inspections.
If I go with the cheaper alternative of the unlicensed guy, apart from the risk that I am taking for his lack of liability, and the fact that he is not bonded, am I breaking any California law?
Also, the law says a contractor undertaking work for more than $500 has to have a contractor’s license. Is this something only the contractor has to comply with or am I precluded by law from employing an unlicensed contractor? The total cost of the project, as you can imagine, is way over $500.
A: We applaud your efforts to save a buck or two, but we just can’t recommend that you hire the unlicensed contractor. The parade of potential horribles is just too long.
It may well be that the unlicensed guy is a fully capable, honest and upstanding tradesman, and has done a number of projects in your town, but the job you’re having done is way too large to entrust to someone who has not put forth the effort and the money required to be licensed.
While a license does not guarantee the quality of work, or whether it will be done in a timely manner, it does give the homeowner recourse if something goes wrong.
Licensing, bonding and insurance requirements are in place to protect the consumer. It also is evidence that the contractor at least knows enough about business and building practice to pass the state exam.
In terms of legal liability, we don’t think you’ll be tossed in the pokey or fined the cost of the kitchen if you hire the unlicensed guy. We don’t know if you are breaking any state or local laws if you chose to do so, but he sure is.
Recently the Contractor State License Board has been cracking down on unlicensed contractors, conducting stings, issuing citations and dragging these guys into court, where they face substantial fines.
When a homeowner hires an unlicensed tradesman to work on a home, he becomes an employer and the tradesman becomes the employee. In essence, the homeowner is the contractor with all the ramifications that brings. This arrangement brings into play not only the “master-servant” relationship arena of tort law but also implicates insurance issues such as liability and workers compensation.
It’s likely you would be responsible not only for the work the unlicensed person does but for any damage he may cause to your property or to the property of others, and (this is huge) for any injuries he or his “family members” might suffer on your job. We don’t know if you’ve had the opportunity to view a hospital bill lately, but a semi-major injury could cost you more than the price of the kitchen remodel.
You might respond, “Yeah, but my homeowners insurance will cover it.” We can only imagine that your insurer would be none to happy (and possibly deny coverage) when they discover that you are trying to shift liability to them when you hire an unlicensed tradesman who got hurt on a job that required a state-licensed contractor.
Securing the permit for the job, while well within your capability, is a somewhat-complicated process. Expect plenty of questions from the building department. Owner-builder permits are in place to allow do-it-yourselfers to get the job done themselves, perhaps with the assistance of a specialty tradesman such as an electrician or a plumber.
We encourage people to take this route when they are willing to take up the tools and get the job done. But when a homeowner is hiring out all the work, the owner-builder permit process is not meant to be a means to circumvent the state contractor license laws.
We could go on, but suffice it to say that we recommend you go with the licensed guy. The risks are too great and the scope of the work is too large to do otherwise.
If you decide to go against this advice, we recommend that you fully inform yourself of the risks. Contact your insurance carrier first, explain what you are considering and determine whether you have coverage in the event of a claim. Next, contact your lawyer and seek counsel as to the potential exposure you may have if something goes drastically wrong.
We’d like to take this opportunity to say a word to you unlicensed tradesmen out there, busting your tails to try to make a living. Did you know that if a customer tries to stiff you on a contract and you are unlicensed you have no legal recourse in a court of law?
If you are a good craftsman and plan on staying in business, get a license. The effort you put into studying for the test will pay you back several fold, and the few hundred dollars you spend is a minor expense, especially if you get busted for contracting without a license.