Whether you are building a new house or making home improvements, the most important decision you’ll have to make is which contractor to hire. The first two essential criteria are that they are licensed and bonded. Hiring an unlicensed contractor will open you up to several significant risks including subjection to a lawsuit.
What exactly does licensed and bonded mean?
Contractor’s licenses require education and work experience, and some may even require an examination. It’s like getting a degree in school that shows you’ve studied and are well versed in the area which you received your degree. Licensed electricians, plumbers and general contractors have proven they have the experience to perform their job duties.
Bonded is a little different from licensed even though the two are related. When a contractor is bonded, this means he has purchased a surety bond. This is a type of insurance policy that protects a property owner. The bond provides a certain amount of liability protection if the contractor fails to complete a job as required or contracted, which provides compensation to a property owner. There are different types of bonds and you should consult an attorney to see if the bond at issue protects you.
What can happen if you hire an unlicensed contractor?
Unlicensed contractors break the law in North Carolina by working without a license if the job is more than $30,000. Without the license proving they have experience they probably don’t know the laws, and permit requirements and inspection requirements might not be up to code. Their lack of knowledge could result in poor craftsmanship, costly repairs and possible removal of property.
In addition, you could face serious liability issues. Licensed contractors have worker’s compensation insurance, so if they get hurt on your property you are not responsible for their injuries. With an unlicensed contractor you’re probably dealing with someone who has no injury protection and you could end up paying for damages if they’re injured.
The consequences of hiring an unlicensed contractor sound pretty scary. But this can all be avoided with a simple phone call to your state licensing board. They can tell you if the contractor is licensed and bonded and if it is in good standing. An experienced construction law attorney can also help you with these matters. The attorneys at Fisher Stark can help you determine whether a contractor is right for you and help you with any contract issues.
Last updated 7/5/2015