Buyer Beware: Unlicensed Contractors - Part 2

In our last post (Buyer Beware: Unlicensed Contractors - Part 1), we included a few things homeowners should consider when considering whether to hire a contractor who could be unlicensed. Below are some tips on how to avoid to avoid hiring an unlicensed (or just plain bad) contractor, which could protect you and your home from physical and/or financial damage:

1. Make sure a contractor is licensed.
In our state (Tennessee), it's prudent to check the state's website for License Search and Verification:

http://verify.tn.gov

For example, one could enter "Results Handyman" as the firm name and click on "Home Improvement" form the Profession menu. Doing so returns our state license number (#6802) and shows that the Status of our company is "Active - Fully Licensed". One can click on the "Details" tab to see additional information.

2. Verify that a contractor is insured.
Check to see if they carry general liability insurance and workers' compensation coverage.

3. Look for warning signs which may indicate that a contractor should be avoided. These include:
-Did you get an unsolicited call or knock on your door?"
-Are you unable to verify a company's address or phone number?
-Do they demand full or large payment upfront or do they require payment in cash?
-Are they using high pressure sales tactics such as requiring you to make a hiring decision today?
-Do they refuse to give you anything in writing or are they unwilling to give you a price?
-Have they asked you to sign a document that includes blank spaces to be filled in after the contract is signed by you?
-Do they have a bad attitude or do they speak or act unprofessionally?

4. Check References.
An experienced contractor will have successfully completed other projects that are similar to yours. If a contractor has done good work in the recent past, they should have some clients who are willing to give a positive reference.

Bill Boyd

Buyer Beware: Unlicensed Contractors - Part 1

A few days ago, a good friend of ours answered a knock on her front door. The smooth talking gentleman on her front porch said he was a "paving contractor" who happened to have some material leftover after doing a project for UPS. He then commented on the condition of her driveway and offered a super low price on re-paving it. To no one's surprise, his "too good to be true" offer was valid for one day only. Fortunately for our friend, she said no to the deal and the paving man went on down the street. As we were talking to our friend about this incident, we realized that many homeowners don't know what could go wrong when hiring an unlicensed contractor. Below are a 3 things every homeowner needs to consider:

1. Unlicensed usually means uninsured. If that's the case and the contractor causes damage to your home, you will most likely end up paying the price. It's a mistake to think that your homeowner's policy will bail you out. Most homeowner policies require work to be done by licensed contractors and often specifically exclude damages caused by those who are unlicensed. And even though it sounds unfair, you could be held responsible for the medical bills and various other damages (such as lost wages) sustained by an unlicensed contractor if he gets hurt while working at your home.

2. As a group, unlicensed contractors are known to be extremely unreliable. They typically cut corners everywhere they can, performing shoddy work while using cheap and inferior materials. Hire one of them and you could end up paying to have the work redone in the not so distant future. An unlicensed contractor will probably ignore building codes and standards as well. You will almost certainly be forced to correct their shoddy repairs if and when you try to sell your home. Trying to save a few dollars now can cost you dearly later.

3. Those who ignore our contacting laws have a tendency to ignore other laws as well. We recently read about a city that conducted an undercover sting operation to catch those contracting without a license. Of the 14 people they cited for unlicensed contacting, one was also arrested for possessing methamphetamine and drug paraphernalia. Several others drove to the site of the sting operation with a suspended or expired driver's license. One of them was also out on parole. According to a city official: “Some of the people we catch have serious criminal records, and are not the kind of people you want around your family or the valuables in your home.”

Keep an eye out for our next post on Unlicensed Contractors, which will include some helpful tips on avoiding those rascals.

 "An investment in knowledge pays the best interest." –Benjamin Franklin

Bill Boyd