6 Reasons to Choose a Contractor with a License

Similar to many crafty and enthusiastic homeowners, you wonder if you shouldn’t install a book nook on your second floor, redo the tile-work in your master bathroom, or add a wall outlet to your home officer yourself. Do you really need to hire a professional? Do they really need to be a licensed contractor?

A license to build should not be taken lightly. The benefits of having a licensed contractor take the lead on your home projects might become clearer if you take into consideration that it’s not exactly easy to receive a contractor’s license. The strict guidelines overseen by the Contractor State Licensing Boards (CSLB) and all the qualification requirements for receiving a license set a licensed contractor apart with many advantages. Below are just some of these worthwhile benefits.

A Licensed Contractor Is An Experienced Contractor

In order to receive their license, contractors are required to have at least four years of verifiable experience in their specialized line of work. They also have to pass both a law and a business exam as well as a trade exam. This is all in addition to the requirement of the knowledge, experience, and skills to run and oversee the daily tasks of a construction firm or project.

Whereas unlicensed contractors may boast a wide range of services, a CSLB license has various classifications and not every contractor can or should do everything. A Class A - General Engineering Contractor license deals with work that requires specialized engineering knowledge and skills. A Class B - General Building Contractor is someone who will work on structures that require at least two unrelated building trades or crafts. A Class C - Specialty Contractor is exactly how it sounds; they take on projects that require specialized skill and building trades.

Depending on the state and trade, licensed contractors may also have continuing education requirements. Hiring a licensed contractor means you are getting someone who knows what they’re doing very well, and what they know is up to date.

What a Licensed Contractor Will See that You May Miss

Experience Means Quality

With experience comes expertise, and the required relevant experience for becoming a licensed contractor sets the stage for just that. Quality is also the standard for licensed contractors because they must comply with building codes, which exist in the first place to ensure the best and safest possible outcomes.

Most CSLBs prioritize and promote licensed contractors to pursue continued education. Mastering and maintaining their craft and businesses is a win-win for both the contractors and the consumer.

You Avoid Liabilities and Run-Ins With the Law

Hiring an unlicensed contractor, in most cases, can land you into hot water. For example, “any construction project in California priced at $500 or more in labor and materials combined must be performed by a contractor licensed by the Contractors State License Board” (Get Licensed to Build: A Guide to Becoming a California Licensed Contractor, CSLB). Many may wonder if they should break down their house repair project into lower value items to avoid the $500 threshold. That too, however, is illegal, and failing to hire a licensed contractor for work valued at $500 or more can lead to misdemeanor or felony charges.

remodel paperwork

Also, because most state licenses are non-transferable, you know you’ll be working with a professional who is fully aware of all state requirements and regulations. An unlicensed contractor may attempt to cut corners on the job because they don’t face the severe consequences that licensed contractors do if they don’t abide by building codes.

If you hire an unlicensed contractor or handyman who happens to break their arm after falling off a ladder while applying new moldings, you are potentially liable. Licensed contractors, on the other hand, are required to have worker’s compensation insurance if they employ workers. In addition, they are more likely to maintain general liability insurance. Why is this important? Take the example of a contractor or their employee slipping and falling in your home. Liability insurance will cover costs (if any) associated with the damage to your home caused by the fall. Worker’s compensation, on the other hand, will cover injury costs (if any) to the contractor and/or their employee.  In both instances, these insurances protect you from being responsible for any costs caused by the fall. 

Avoid Injury Liabilities By Hiring a Reliable Contractor

In addition to insurance requirements, in California and other states, licensed contractors are required to have a contractor license bond. In California, the bond is for $15,000 and is intended to cover any project the contractor agrees to perform.

Ultimately, hiring a licensed contractor provides peace of mind and protects both parties from many things that can go wrong during a construction project. The list of regulations and requirements that comes with hiring a licensed professional serves both you and the contractor from benefiting from the partnership.

It’ll Make Your Life Easier

Instead of becoming overwhelmed with all the details that surround even a simple home improvement or construction project, hire a licensed contractor! One of the benefits that their experience brings to the table is knowing how to navigate and organize the process for efficiency and for fewer mishaps. This will decrease the chance of there being things to fix later on if things are not done in the right order initially.

As an example, whereas an unlicensed contractor with some experience may just do that install of an electric vehicle charging station that you’ve been thinking about, a licensed electrician may advise you to hire an electrical engineer to calculate the circuit load before installing, so that you can avoid a blown circuit and a much more expensive repair project.

You’re Able To Do a Background Check

Meeting with an unlicensed contractor may unfold like so: you’re offered a lower price than a licensed contractor for the same services and you meet with the contractor in advance. The contractor shows you pictures of homes previously worked on and even gives you references of past customers who could speak to their satisfaction in the work. However, you probably don’t find out about the time the contractor was doing a second-floor bathroom remodel and the tub fell through the floor into the living room. The contractor might also fail to mention the three fines and threats of criminal penalties for breaking building codes in the past. With unlicensed contractors, you have no way of truly evaluating their previous performance.

The performance of a licensed contractor is, however, traceable. With a licensed contractor, consumers are able to search records of any complaints filed with their CSLB and if there are any issues with their own projects, they may file formal complaints which CSLB then investigates. When necessary, the CSLB may take disciplinary action against contractors. In the end, unlike the case for unlicensed contractors, the shortcomings of a licensed contractor have repercussions that are, most importantly, available for you to learn about.

trustworthy contractor

It's Worth Your Money 

The reason an unlicensed contractor may quote a lower price is that they are not required to pay licensing fees, attain a bond to protect their work, and most often do not obtain liability and worker’s compensation insurance either. Without these added expenses, an unlicensed contractor can offer their services at a rate lower than a licensed professional. However, that puts you, the hirer, at risk.

Another risk that comes with an unlicensed contractor is potentially having to spend more. This can happen if the contractor fails to acquire the required building permits, does not perform the job up to code, or does a haphazard job requiring you to have others come in and repair. If you do end up finding out that your home renovation was completed without the proper permits, you are then responsible to adjust or redo the repairs to meet state codes yourself. 

The CSLB’s principal mission is “to protect California consumers by regulating the construction industry”. There’s really no going wrong with choosing a bonded, insured, and licensed contractor.