Why Hire a Licensed Contractor?


Why should you hire a licensed contractor when so many unlicensed builders will work for less? The short answer is because it may be required by law in your state or municipality. Then again, depending on where you live and the size of your project, the law may not mandate using a licensed contractor. Does that let you off the hook?

According to a recent article in MarketWatch, 10 things contractors won’t tell you, “unlicensed contractors ranked among the five fastest-growing sources of consumer complaints, according to the Consumer Federation of America (CFA).”  The trend continues as more unlicensed builders with pickup trucks and a few tools take advantage of the boom in remodeling as we rebound from the recession.


Why a Contractor’s License Counts

It doesn’t take a lot of skill to be able to measure and cut a 2X4. It takes training, skill and experience to put all those 2X4s together to create a structurally sound, aesthetically pleasing structure, though. When some guy rolls up and says he can do some remodeling work for you at a discount, how do you know he’s telling the truth? If you ask to see his contractor’s license first, you’re on the right track. His license is proof that he has satisfied state and/or local building authorities that he has the training and experience needed to do the job right.


Hiring the Right Licensed Contractor

Depending on where you live, a contractor can have one or more of several types of contractor’s licenses. In New York City, for instance, a “person or business must have a Home Improvement Contractor license if engaged in the construction, repair, remodeling, or addition to any land or building used as a residence,” according to NYC Consumer Affairs. Regulations may be different in your area, but the example highlights the importance of hiring a builder or other tradesperson whose trade license matches or exceeds the type and scope of work to be carried out.

If you don’t care about quality and the work doesn’t have to adhere to any safety standards, you might get away with hiring an unlicensed “jack of all trades.” However, dangers are hidden everywhere:

  • You’re literally “playing with fire” with any kind of electrical work.
  • Can you really trust an amateur to correctly install your plumbing?
  • If you lean against a poorly constructed balcony rail, it could cost you your life.
  • A leaking roof can damage your home and become an electrical fire hazard.

You can’t trust any of these jobs to amateurs. Each of them should require an appropriate trade license. If someone tells you, “I don’t need a license for a job this small,” what they’re really telling you is that they don’t care enough about their job to get a contractor’s license.


Trade Licensing: A Global Issue

We’re fortunate in the United States and other developed countries to have trade licensing authorities to protect us. In countries where they don’t exist or don’t have the means to enforce the law, electrical fires break out regularly, raw sewage is a common health problem and buildings are frequently poorly and dangerously constructed.

Australia has had trade licensing regulations in place for decades. Like us, they have unlicensed “tradespersons” who work at a discount in exchange for a cash payment. For a time, they were getting away with it, but Australian consumers are getting sick of paying for shoddy workmanship. The success of websites such as licensedtrades.com.au is testament to the fact that Australians are saying “No!” to “tradies” (Australian for tradespersons) who don’t take enough pride in their work to get a contractor’s license.

You might get away with hiring an unlicensed “contractor” for small jobs, but do you want to encourage them? Do you want to risk being disappointed with the results? Only hire licensed contractors. This will encourage everyone to lift their game and you won’t be the next person to file a consumer complaint.

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