Hiring licensed vs unlicensed contractors

[jeromedawg]

Hi all,

Just wanted to get your take on hiring unlicensed vs licensed contractors and if you are adamant about one way or the other, or if you will make a decision to hire one or the other based on amount of risk with whatever project it is.

For example, I'd imagine a lot of people use unlicensed landscaper/gardeners to perhaps maintain their yards but will consider hiring out to a licensed contractor for larger work in their yard?


In my case, for a landscaping project involving possible use of smaller heavy equipment (mini bobcat, etc), loading and working with heavy materials (like large amounts of gravel/base dirt, etc) would you guys recommend going with someone licensed or unlicensed?

I'm assuming the decision is mostly going to be based on how risky (as far as injuries/accidents are concerned) the work is that you need to have done.

[nereo]

Hi all,

Just wanted to get your take on hiring unlicensed vs licensed contractors and if you are adamant about one way or the other, or if you will make a decision to hire one or the other based on amount of risk with whatever project it is.

Personally, if I hire something out it's only to a licensed and bonded contractor.  Presumably I'm hiring out jobs that are technical enough that for some reason I am unwilling to do myself (typical reasons: risk of bodily harm, complexity/expertise, requires unique skillset and/or specialized tools to do well).  I'm not going to hire out any of those types of jobs to a person who isn't licensed and bonded - to me the risk is too high.

...but if I were to hire out something basic like mowing the lawn or painting interior walls (particularly to a highschool/college student) - then I don't care if they are licensed/bonded because the risk of them causing serious damages is very low.

[Omy]

I try to stick with licensed and insured if it's beyond what I would be comfortable doing myself. Some states (like mine) have seller disclosures that ask if upgrades were done by licensed contractors so buyers are aware. Some areas require that certain improvements such as HVAC installations be permitted, so knowing your local laws and disclosure requirements might help you decide what makes most sense for you.

[Laura33]

Licensed and bonded all the way.  Having amassed a goodly 'stache, I am a prime target for lawsuits.  The very small amount of money saved is not worth the risk.

Also, things like licenses and bonds are there for a reason:  to ensure a minimum level of knowledge and experience (making it more likely the job is properly done and less likely someone gets hurt through shoddy safety standards), and to provide some degree of protection for the consumer in the event things go wrong.  Those requirements are certainly not perfect, but a contractor who has incurred the time and expense needed to satisfy them signals to me that they are more likely to be competent and professional than one who can't be bothered to do so.

Only exemption to me is the teenagers who run around after a snowstorm to earn $20.  But you still get what you pay for -- one of them left permanent scratches on my car because he decided it would be fastest to use the metal snow shovel to clear the snow off it.

[ditheca]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

[Villanelle]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

I write a blog for a roofing contractor, and one of the things they recommend is asking that copies of all licenses and insurance be included with the signed contract. 

[Jon Bon]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

I write a blog for a roofing contractor, and one of the things they recommend is asking that copies of all licenses and insurance be included with the signed contract.

This is not a bad idea either.

As a licensed and bonded general contractor I guess such things don't really concern me when doing work. I have a group of a few tradesmen, I assume they are licensed, but I don't give a crap because they are good at their jobs!

Yes I would think hiring folks that are legit would have a stronger correlation with folks that are skilled and not stupid..... However I would also tell people to trust their gut, inspect their work as they do it, ask questions, have friends look over their work, make a call to your handyman friend to run something by them. Trades people (including me) are really good at bull-shitting answers to cover up the reasons for their work!

"Why did you have to replace the whole furnace while doing a small plumbing repair?"

"Oh yeah, there was a tiny unicorn loose in your furnace it poked a bunch of holes in it with its horn, so I needed to replace it, that will be $10,000"

[Villanelle]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

I write a blog for a roofing contractor, and one of the things they recommend is asking that copies of all licenses and insurance be included with the signed contract.

This is not a bad idea either.

As a licensed and bonded general contractor I guess such things don't really concern me when doing work. I have a group of a few tradesmen, I assume they are licensed, but I don't give a crap because they are good at their jobs!

Yes I would think hiring folks that are legit would have a stronger correlation with folks that are skilled and not stupid..... However I would also tell people to trust their gut, inspect their work as they do it, ask questions, have friends look over their work, make a call to your handyman friend to run something by them. Trades people (including me) are really good at bull-shitting answers to cover up the reasons for their work!

"Why did you have to replace the whole furnace while doing a small plumbing repair?"

"Oh yeah, there was a tiny unicorn loose in your furnace it poked a bunch of holes in it with its horn, so I needed to replace it, that will be $10,000"

To me, the bigger concern isn't skill, it's liability if they are hurt, or if they accidentally burn my house down while trying to catch that troublesome unicorn.

[Jon Bon]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

I write a blog for a roofing contractor, and one of the things they recommend is asking that copies of all licenses and insurance be included with the signed contract.

This is not a bad idea either.

As a licensed and bonded general contractor I guess such things don't really concern me when doing work. I have a group of a few tradesmen, I assume they are licensed, but I don't give a crap because they are good at their jobs!

Yes I would think hiring folks that are legit would have a stronger correlation with folks that are skilled and not stupid..... However I would also tell people to trust their gut, inspect their work as they do it, ask questions, have friends look over their work, make a call to your handyman friend to run something by them. Trades people (including me) are really good at bull-shitting answers to cover up the reasons for their work!

"Why did you have to replace the whole furnace while doing a small plumbing repair?"

"Oh yeah, there was a tiny unicorn loose in your furnace it poked a bunch of holes in it with its horn, so I needed to replace it, that will be $10,000"

To me, the bigger concern isn't skill, it's liability if they are hurt, or if they accidentally burn my house down while trying to catch that troublesome unicorn.

A fair concern, but I believe that is what homeowners insurance is for right?

[jeromedawg]

How do you know a contractor is licensed and bonded? I hired a plumber who was beyond incompetent. He cut the water main and flooded my house.

Turns out his competent/licensed partner who started the business quit a few months before the incident. Contractor was not insured, and ghosted me when I started asking about reimbursement. I think he actually believed he was still bonded until he started making phone calls... I'm not sure how I could have protected myself, as all appearances suggested the business was legitimate.

I tried looking up a list of licensed plumbers in Utah, but the best I could on .gov sites was an enormous list of firstname/lastname with no unique identifiers or business affiliations.

I write a blog for a roofing contractor, and one of the things they recommend is asking that copies of all licenses and insurance be included with the signed contract.

This is not a bad idea either.

As a licensed and bonded general contractor I guess such things don't really concern me when doing work. I have a group of a few tradesmen, I assume they are licensed, but I don't give a crap because they are good at their jobs!

Yes I would think hiring folks that are legit would have a stronger correlation with folks that are skilled and not stupid..... However I would also tell people to trust their gut, inspect their work as they do it, ask questions, have friends look over their work, make a call to your handyman friend to run something by them. Trades people (including me) are really good at bull-shitting answers to cover up the reasons for their work!

"Why did you have to replace the whole furnace while doing a small plumbing repair?"

"Oh yeah, there was a tiny unicorn loose in your furnace it poked a bunch of holes in it with its horn, so I needed to replace it, that will be $10,000"

To me, the bigger concern isn't skill, it's liability if they are hurt, or if they accidentally burn my house down while trying to catch that troublesome unicorn.

A fair concern, but I believe that is what homeowners insurance is for right?

Does homeowners address liability in case of an injury though? I think that's the bigger concern - you get some unlicensed guy to do some yard work or whatever and a couple months later you get a letter in the mail about how they are filing a lawsuit because they injured their back working at your property. I think I heard people will buy umbrella insurance though to protect against that kind of stuff...

[nereo]

Read your homeowners policy. Ours protects us provided they are licensed professionals (at least for trades). We know because we are undergoing a home addition and have already gone down this rabbit hole.

[YttriumNitrate]

So a while back my parents and their friends were both having the interior of their houses repainted. My parents decided to go with a license & bonded contractor while their friends went with guy who worked for $15/hr (cash) and was a questionable immigration status, but came highly recommended from other people in the area. Supposedly the guy hired by my parents friends works 10+ hours a day for nearly two weeks straight, and he did an amazing job. In contrast, the company hired by my parents was terrible and took nearly three months to finish their sub-par work.

Obviously this is just one data point, but I think the moral of the story is that if you want to hire an unlicensed contractor make sure they are an undocumented immigrant with stellar reviews from previous customers.

[jeromedawg]

So a while back my parents and their friends were both having the interior of their houses repainted. My parents decided to go with a license & bonded contractor while their friends went with guy who worked for $15/hr (cash) and was a questionable immigration status, but came highly recommended from other people in the area. Supposedly the guy hired by my parents friends works 10+ hours a day for nearly two weeks straight, and he did an amazing job. In contrast, the company hired by my parents was terrible and took nearly three months to finish their sub-par work.

Obviously this is just one data point, but I think the moral of the story is that if you want to hire an unlicensed contractor make sure they are an undocumented immigrant with stellar reviews from previous customers.

I was just wondering about this - if they are undocumented, there's not really a way for them to come after you (well, at least per the legal system and filing lawsuits or workers comp claims, etc), is there?

We had a painter who we used a few times to help with drywall and paint at our condo. Our real estate investor friend recommended him. I'm not 100% sure as far as his immigration status but he did an amazing job. I was considering having him come paint the interior of our new place but I think his rates have increased quite a bit or it was just sticker shock (since we're in a bigger place now). We're not in a rush to repaint either but if we do I'll probably still reach out to him just because I know he does quality work.

Of course, in my limited experience, there doesn't seem like there's that much that can really go wrong with painting interiors where there are no ladders/stairs/second floors involved either. I hear you on licensed/bonded contractors who don't always do the best job - you would think being licensed/bonded equates to having good and honest work ethic but that doesn't seem to always be the case.

I may just hit up our nextdoor neighbors who have been having the same gardener come by to do their yard work as well as whoever they had come out to build their bbq grill island area. I figure there's a pretty good chance that whoever they had do that can probably help with what we're asking for... 

[YttriumNitrate]

I was just wondering about this - if they are undocumented, there's not really a way for them to come after you (well, at least per the legal system and filing lawsuits or workers comp claims, etc), is there?

Well, I don't think their immigration status would matter much if they ended up as a quadriplegic from something that happened on your property, but it does seem like it would reduce the changes of a lawsuit for a minor injury.

[snic]

My favorite kind of contractor is the guy who does the work himself, maybe with one or two assistants if he needs them. That way you're not paying all the costs of administering a larger business and selling to multiple customers. These guys aren't always licensed, but sometimes come highly recommended by friends and neighbors. I've taken the risk of hiring unlicensed guys like this when I know that they have extensive experience. It's worked out fine so far.

[Sibley]

My favorite kind of contractor is the guy who does the work himself, maybe with one or two assistants if he needs them. That way you're not paying all the costs of administering a larger business and selling to multiple customers. These guys aren't always licensed, but sometimes come highly recommended by friends and neighbors. I've taken the risk of hiring unlicensed guys like this when I know that they have extensive experience. It's worked out fine so far.

I've had the really good luck with these folks. Couple issues: if they flake, you've got problems; some projects are just too big for them; and scheduling can be tough. However, in my experience, the good ones often do have their license and insurance, they're just small.

At some point, I will have big projects which will need the big company though. Different set of concerns there.

[jeromedawg]

My favorite kind of contractor is the guy who does the work himself, maybe with one or two assistants if he needs them. That way you're not paying all the costs of administering a larger business and selling to multiple customers. These guys aren't always licensed, but sometimes come highly recommended by friends and neighbors. I've taken the risk of hiring unlicensed guys like this when I know that they have extensive experience. It's worked out fine so far.

I think that's what I'm looking for. The honest unlicensed guy came recommended to me by way of the guy at the material yard when I was calling for a quote on materials. So far the quote he has given me is really good (basically just under $2200 to excavate to 6" depth, grade and then backfill with [but not compact] road base). It may go up if he has to haul more dirt away but I'm trying to figure out ways around having to do that.

In contrast, his buddy (licensed/bonded/insured) who he referred me to wants to charge $3000 just to excavate and another $2800 to fill and compact with road-base and started going off-topic telling me how I should have him build a bbq station and pour all concrete in the backyard :T He was basically shooting down all the ideas I had and started taking the role of landscape designer. One thing he did advise was to run a french drain in place of the drains that I just had redone to better absorb and carry away the water for after it rains, which maybe was sound advice? Maybe I need to do more research on that but he sure liked to talk a lot about the ideas he had for my yard haha.

[trollwithamustache]

is your unlicensed guy insured in some way?

 I actually think it's fine to use an unlicensed guy as long as you understand what's going on. Handy man without a license to paint a room is fine.  Electrical work where someone (you) has to pull a building permit, ha! no way. 

The light dig and road base is not something that would require a building permit in a sane county.

[Sibley]

is your unlicensed guy insured in some way?

 I actually think it's fine to use an unlicensed guy as long as you understand what's going on. Handy man without a license to paint a room is fine.  Electrical work where someone (you) has to pull a building permit, ha! no way. 

The light dig and road base is not something that would require a building permit in a sane county.

As long as you do your due diligence on what's buried, I agree. Please don't hit the gas line.

[GilesMM]

It is illegal to hire unlicensed contractors in California unless you as General Contractor are following all state regulations related to health, safety, workers comp, etc.  You risk law suit and lien from the contractor and fines from the state.  Check your policy. Someone making up their own rules on drainage and other stuff which may be subject to local or state codes puts you further at risk now and into the future.

[CatamaranSailor]

25 years ago, I had a grizzled old builder give me the following advice: Never hire a contractor that doesn't have kids in school.

That advice has proven to be helpful over the years.

I've also hired young guys (journeyman) that are employed with a shop but are open to side work. I've always had them sign waivers (which probably wouldn't have stood up in court), purchased and stored the materials for them. That's worked out fine. Knock on wood.

The only unlicensed guy I've ever hire was a handyman who installed a front door for us. But he was well known, local, and...had kids in school.

In your situation I absolutely see both sides.

Personally, I'd start asking around all your peeps and find someone who's an excavator professionally who wants some extra $$$ for a weekend type gig. In the end, it comes down to screening the right person and IMHO the best way is word pf mouth.

[jeromedawg]

25 years ago, I had a grizzled old builder give me the following advice: Never hire a contractor that doesn't have kids in school.

That advice has proven to be helpful over the years.

I've also hired young guys (journeyman) that are employed with a shop but are open to side work. I've always had them sign waivers (which probably wouldn't have stood up in court), purchased and stored the materials for them. That's worked out fine. Knock on wood.

The only unlicensed guy I've ever hire was a handyman who installed a front door for us. But he was well known, local, and...had kids in school.

In your situation I absolutely see both sides.

Personally, I'd start asking around all your peeps and find someone who's an excavator professionally who wants some extra $$$ for a weekend type gig. In the end, it comes down to screening the right person and IMHO the best way is word pf mouth.

The unlicensed guy actually had another guy meet him there as far as the grading is concerned, and it looked like his buddy was employed by someone else but perhaps does this as a side-gig with this guy.

Otherwise, I've contacted probably a dozen excavators/haulers...none of them want to do any of this as a "weekend gig" - not many really want the small jobs - if they do they're charging premiums. One guy told me if I'm not going to have him haul anything away, he wouldn't do any of the work I was asking for (at that time it was lawn removal).  If anything, the last guy I contacted who is unlicensed is the one who would fit this category (of wanting a weekend gig). I mean, I'm *assuming* he's got a good track record if the material yard was recommending him.

I get the point on kids - they don't want to be a liability for their family and are self-incentivized to not screw-up or injure themselves. Trying to figure out creative ways to find out if they have kids, without straight up asking them: "So, do you have kids?" without sounding creepy, is the trickier part I would think lol

[nereo]

25 years ago, I had a grizzled old builder give me the following advice: Never hire a contractor that doesn't have kids in school.

Oof… that just made me cringe.

[trollwithamustache]

is your unlicensed guy insured in some way?

 I actually think it's fine to use an unlicensed guy as long as you understand what's going on. Handy man without a license to paint a room is fine.  Electrical work where someone (you) has to pull a building permit, ha! no way. 

The light dig and road base is not something that would require a building permit in a sane county.

As long as you do your due diligence on what's buried, I agree. Please don't hit the gas line.

The owner can call USA dig and get everything marked. Many a licensed contractor will make you do this for them. 

FWIW, I've done a couple industrial pipeline repair projects after a licensed contractor dug up the line and damaged it. Despited the pipeline being marked with permanent marker signs.