Hiring an Unlicensed Contractor

Real Estate Broker/Owner with Lazarus Realty

Thought I might say a few things about unlicensed contractors. If you hire a contractor and they perform a job where the total amount of labor and material exceeds $500.00, by law, they must be licensed. 

You are not obligated to pay an unlicensed contractor for a job if the combined total of labor and material is over $500. In fact, not only are they not due the money, they will be fined for their activity if you report them.

California courts do not allow an unlicensed contractor to file a law suit against the homeowner for work performed on jobs over the legal limit of $500.00.

From the CSLB website:

California Business and Professions Code 7028 (a)

Unlicensed Contractor’s Have No Legal Recourse To Enforce Work Contracts

Unlicensed contractors may be surprised to discover they cannot legally recover any financial damages they may have incurred as part of a contract for work that requires a license, in which a customer did not hold up their end of the deal California business and professions code 7031. In addition, any person who hires an illegal contractor to perform work that requires a license can bring a suit against the contractor for all payments made and the unlicensed contractor will have no legal recourse. In layman terms, no contract between an unlicensed contractor and a customer involving work that requires a license is legally enforceable from the perspective of the contractor, however, the customer retains the right to sue the contractor for any and all payments made EVEN if all work was performed according to contract.

There are a lot of ways that unlicensed contractors will try to convince you that they can do the job legally. For example, they may say that you can pay them hourly and buy the material. Just trust me when I say that this will not work. I know because my son, a licensed landscape contractor, was caught in a sting operation by the Contractor’s State License Board and this was the line he gave the customer. (At the time he really believed that this was a legitimate work around but found out soon enuf that it wasn’t. ) The sting operation forced him to get his license.
I am also a licensed General Contractor (since 1988) and am fairly well acquainted with contract law. My license is currently inactive and I’m not giving this information to solicit business. Its more like a public service announcement. I figure a lot of people out there know this stuff and a lot of people don’t. 
If you want to check a Contractor’s License just go the California Contractors State License Board website http://www.cslb.ca.gov/ and right there on the front page they have place to put in the license number and check it – to see if its active.

Comments (7)

Michele Connors
The Overton Group, LLC Pitt & Carteret County - Greenville, NC
Your Eastern North Carolina Realtor

you had me at "unlicensed" ---Red Flag ! 

Good post ! 

Jun 01, 2015 08:19 AM
Paul Peck
Peck Drywall and Painting serving Brevard County, Florida - Melbourne, FL
Licensed Drywall and Painting Contractor

I agree 100% Randy "Lazarus" McAtee! Also any manufacture warranties ( Roofs, Air Conditioners and Water Heaters )are voided if installed by an unlicensed contractor too.

You wouldn't believe all the hoops I have to jump through to be a licensed drywall contractor and painting contractor here in Florida. As a matter of fact I just finished up my 14 hours of continued education yesterday.

Hire Licensed Contractors!


Jun 01, 2015 08:49 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

There may be a place for "Good Old Boys", but not when it comes to major work like roofing, drywall, electric wiring, etc. 

   Check their license and their insurance!

Jun 01, 2015 10:17 AM
Chris and Dick Dovorany
Homes for Sale in Naples, Bonita Springs and Estero, Florida - Naples, FL
Broker/Associate at Premiere Plus Realty

There is valid reason to hire a licensed contractor.  We recently did a total kitchen overhaul.  Had problems with the electrician so we used a friends electrician (unlicensed) to finish the job.  He was only $40 an hour whoopie!!!!!  Not worth it.

Jun 01, 2015 10:46 AM
Shelly Roberson

The High Price to the Low Bid - The worst part about unlicensed activity is the parade of horribles that can follow if someone is injured on the job. In most cases the homeowner becomes the "statutory employer" and is liable for worker's compensation for the uninsured injured worker. It gets worse - read my article right here - http://bit.ly/1sz9WRH

Shelly Roberson
APR Realtors, Palo Alto, CA

Jun 02, 2015 02:26 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Well, it depends on a person. My Dad seems can do anything and do trust him, but.......Usually I would not recommend anyone to hire an unlicensed contractor ( unless, you know that person very well or saw his/her work). 

Jun 27, 2015 03:28 PM
jack rabbit

It really depends on the state you are in. Here in NC you only need a contractors license for major work such as Plumbing, Electrical, and any work thats over $30k.  Many homeowners choose to hire handymen to do small repairs but i won't do that unless that person has references and as a property manager i would reqire that that person have liability insurance. One problem I've personally run into with licensed contractors is that they will subcontract the work to non-licensed individuals. So if your planning to hire someone for a big job make sure its clear that the contractor is going to be the one doing the work and all subcontractos will provide proof of licenses or at the very least insurance.

May 05, 2021 05:45 AM