Unlicensed Contractors


Anyone who utilizes the services of an unlicensed contractor is considered a  victim and is entitled to disgorgement of all monies paid to the unlicensed  contractor, regardless of whether they knew the contractor was unlicensed.  Consumer victims of unlicensed contractors may also get reimbursed for their  attorney's fees spent going after the unlicensed contractor under current  statute.

California state law mandates that all construction jobs costing $500 or more  for labor and materials must be conducted by a validly licensed contractor.  Receiving a contractor's license requires contractors to pass several tests and  get a background check from the California Department of Justice. Typically,  individuals with offenses, infractions, or citations substantially related to  contracting or contracting related businesses are not issued licenses. There are  currently over 300,000 licensed contractors in California in varying specialty  trades including general building contractor A and B.

Because unlicensed contractors don't carry worker's compensation insurance,  commercial general liability insurance, or any type of bonds, they almost always  are the low bidder on a job. However, there is a high price to a low bid. If a  worker (hired by the unlicensed contractor) is injured on the job, the homeowner  or property owner could be liable and cause unexpected increased insurance  premiums. Without commercial general liability insurance in place problems,  defects, and shoddy construction which results in property damage or personal  injury will not be covered, and the homeowner or property owner will be stuck  with the damage and no one to pay for it.

The Bottom Line

Make sure you thoroughly check out your contractor prior to signing a  contract. Make sure you check references by calling previous clients.

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