Licensed vs Unlicensed Contractors: What You Need to Know

 In Consumer Information, Home Repair, Remodeling Information

Sara Majzun, NCBIA President

Over the past 12 months we have all spent more time at home. With more time at home comes projects we might want to see done around the house. While there are many smaller tasks that you may feel comfortable taking on yourself, there are other jobs that might just be beyond your skillset or comfort zone. In these instances, it’s time to bring in a contractor to assist in completing your project. So how do you choose which contractor is right for your project? One question you might ask is, do you choose a licensed or unlicensed contractor?

What does it mean to be licensed? If a contractor is licensed it means that they have a legitimate claim to be a professional in their industry. They are making a legitimate career out of this profession and are not simply making a quick cash grab. Acquiring a license is a costly endeavor for the contractor to achieve and then maintain which shows their commitment to being certified, legal, and obey construction law.

Often, the first question you ask when you bring in a contractor to evaluate your home project is “how much is this going to cost?” Obviously in this day and age, this is a very important question as sticking to a budget for a home project is a good thing. However, unlicensed contractors are able to give a much lower quote for a project which makes them an enticing option. But that’s not always a good thing. Offering a lower price gives them the ability to cut corners and that is not at all what you want from a contractor working on your home. The reason a licensed contractor might be more expensive than an unlicensed one is they have to pay to maintain their license, obtain the appropriate permits, carry liability insurance and workers compensation, and if required obtain a bond to project their work. This drives up their overhead, which could raise the price of your project. But what happens if a contractor does not have all of these things in place?

Let’s say the unlicensed contractor you hired to do your kitchen remodel installed the sink incorrectly and it causes major water damage in your home. Your homeowner’s policy will not cover you unless you specifically purchased coverage for in-home employees. The licensed contractor will have the necessary insurances in place to rectify this issue for you. Having an unlicensed contractor could mean paying way more out of pocket for a project because they do not have the necessary paperwork.

As you can see, when it comes to deciding between a licensed vs unlicensed contractor, the clear winner is to always go with a licensed one. You are much better off paying a bit more to ensure that your job will be done properly and that you won’t be held liable for any damages or injury.

The North Coast Building Industry Association has a complete list of many reputable and licensed contractors in our area. We can help you find a builder, remodeler, electrician, plumber or what ever else you may need to make complete your project. Visit our website at www.ncbia.com or call our office at 440.934.1090 and let us help you find the best contractor to turn your dream home into a realty.

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