Catherine Schaeffer
Work done by unlicensed contractors happens every day, everywhere. Frequently, the work done is fine, and the homeowner feels they saved money, time, and energy. However, all too often, homeowners lose thousands and sometimes even tens of thousands of dollars with absolutely no recourse available to the homeowner. Additionally, most homeowners insurance excludes any work done by unlicensed contractors. This, in and of itself, should really discourage you from using unlicensed contractors/vendors.
It is important to hire licensed, bonded, and insured contractors when having work done on your home to protect yourself from having any financial responsibility for any shoddy workmanship or if someone is hurt on the job. Many things can go wrong, and people can get hurt. Ensure you are not the one financially responsible for these bills by only hiring licensed, bonded, and insured contractors.
Beware! If you do not hire a contractor who is licensed, bonded, and insured, you become the general contractor and will be responsible for any damage or medical bills that happen on the job. Standard homeowners policies exempt damages when you are using an unlicensed contractor.
In two recent transactions, sellers had opted to have significant jobs done by unlicensed contractors. The contractors were referred by neighbors who were happy with work done at their properties. However, when work was done for my sellers, the work was not done correctly, and the errors were discovered during a home inspection. Both sellers reached out to the unlicensed contractor and found out they had no remedy. For one of the sellers, it cost her an additional $15,000, and for the other seller, an additional $3,700.
Hiring licensed contractors has many advantages and protections for homeowners. A contractor cannot obtain a license without having a minimal amount of experience, must pass an exam in their field of expertise, may be required to have a trade-specific exam, have a criminal background check, be bonded, and, equally important, cannot have any unresolved complaints.
In addition, homeowners have protections not available to those using unlicensed persons. Among the projections are the ability to file a complaint within specified timeframes. Should the contractor be found negligent in standards of work or not completing work to code, you may also be eligible to apply to the Registrar’s Residential Contractors’ Recovery Fund and, depending on the cost of damages, may receive up to $30,000 to have the work corrected or completed.
Beware! Just because an ad says, “Licensed, Bonded, and Insured,” does not mean it’s true! Before you sign a contract or give any contractor any form of payment, be sure to check the Registrar of Contractors’ website at azroc.my.site.com/AZRoc/s/contractor-search for the current status of their license and to see if they have any unresolved complaints.
For more information, feel free to reach out to Catherine Schaeffer at DanSco Real Estate Group at 480-650-3444.