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Unlicensed Contracting Becoming More Rampant in Depressed Market

Unlicensed contracting not only leaves homeowners open to financial lose but it also hurts and contracting industry as a whole. The current economic downturn has unfortunately flooded the market with unlicensed contractors. As companies have continue to downsize due to lack of work, a lot of unemployed unlicensed trades people wandered into business themselves; bidding on everything from water heaters, to remodels, and even new construction projects. It is somewhat of an annoyance to us licensed, insured, and regulated contractors. But, what’s even more concerning is the number of homeowners that do not realize they are working with an unlicensed contractor. Doing so not only subjects them to the contractor’s lack of ability and knowledge but also the fact that there likely no financial backing to their contractor. Meaning, when there’s a problem and there will be, they are on their own.

The reason most people avoid getting a contractor’s licenses is the insurance and regulatory compliance. In truth, getting a contractor’s license is quick and simple: study for a couple weeks, take a multiple choice test, pass it, send in your $400, and you’ve pretty much got a license. But, for that license to be current you also need to carry insurance and adhere to certain state regulations. Here in lies the problem for 95% of unlicensed contractors. They can afford or don’t want to pay for insurance, training, etc. So why trust them working around your house?  

City and county offices attempt to thwart unlicensed contractors by making it impossible to pull a permit without proof of license. But think about it, why would an unlicensed contractor even make the attempt at a permit. Supply houses have also made attempts to stop unlicensed contractors by denying the sale of certain products. However, most unlicensed contractors get around this by paying cash on a licensed contractors account, often times without the licensed contractor even knowing it.

The only way to really combat unlicensed contracting is for homeowners to check. So the next time you have a plumbing or heating technician over ask to see a copy of the license. In the state of California it is sufficient for field technicians to carry a paper copy of the company owner’s contractor license.

The following article is from the Contractors State License Board

Two Repeat Offenders Among 10 Nabbed in Chico Sting
Jail time a possibility for contracting without a license

SACRAMENTO – Ten illegal operators are headed to court next month following a Contractors State License Board undercover sting operation conducted at a Chico home on April 14, 2011, with investigators from the Butte County District Attorney’s Office.

CSLB investigators posed as property owners, inviting suspected illegal operators to bid on home improvement projects such as concrete, landscaping, fencing, painting, and tree trimming. Those who bid more than $500 received notices to appear in court for contracting without a license. California law requires that all home improvement projects valued at more than $500 for labor and materials be performed by a licensed contractor.

Some suspects are facing additional charges for illegal advertising and soliciting excessive down payments. State law requires that contractor license numbers be in all advertisements. Those who are not licensed may perform work valued at less than $500, but their ads must state that they are not a licensed contractor. Contractors are also prohibited by law from soliciting a down payment larger than $1,000 or 10 percent of the contract price, whichever is less.

This is not the first time Thomas Christopher Chadwick, 38, of Bangor, and Alvaro Barajas Garcia, 45, of Chico, have been caught in a CSLB sting. Both were issued notices to appear during a September 14, 2010 operation at a Chico mobile home park. Garcia pleaded guilty and was fined $1,010 for contracting without a license. Chadwick pleaded not guilty and is set for trial on one count of contracting without a license on June 20, 2011. Garcia and Barajas are now charged for a second offense which carries a penalty of up to $5,000 and at least 90 days in county jail.

“This sting should serve as notice that CSLB and its partners are serious about cracking down on illegal contracting activity in Butte County,” said Registrar Steve Sands.
In addition to the suspects caught in the sting operation, CSLB and the DA’s office will conduct follow-up investigations on at least two licensed contractors who are suspected of having employees who are not covered by workers’ compensation insurance. Contractors are legally required to purchase workers’ comp coverage for all employees to protect homeowners from liability if a worker is injured on their property.

If you’d like more information about plumbing C36 or HVAC C20 licensing give Bellows Plumbing, Heating, & Sewer a call at 877-477-7151 or visit BellowsService.com

 

 

 

 

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