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Using Licensed Contractors

Stop Unlicensed Contractors


Using Licensed Contractors



There are 44 different types of contractor licenses, including general and specialty contractors. General building contractors usually oversee projects and coordinate the specific subcontractors for a job. Specialty or subcontractors usually are hired to perform a single job.

If the work you are considering is valued at $500 or more, a valid California Contractorís License is required for the license category in which the contractor is to work. If you contract with someone who does not have a license, the Contractors Board may not be able to assist you with a resolution to a complaint. A remedy against an unlicensed contractor may only be available in civil court. It is illegal for one contractor to use another contractorís license.


Home improvement and repair projects have provided scam artists opportunities to make money from other peopleís loss and suffering. Donít rush into the repairs, no matter how badly they are needed. Donít hire the first contractor who comes along.

Donít be victimized by someone making a door-to-door presentation, offering to do repair jobs or home improvement on-the-spot, and requiring a cash deposit. An enterprising contractor may take the door-to-door sales approach; however, even on the smallest job, you must get proof that the person you are dealing with has a contractorís license in the trade for which you expect to have the work done.

Ask to see the contractorís ďpocket licenseĒ or Home Improvement Sales (HIS) registration. All contractors are issued pocket licenses which show the type of trade for which they are licensed and the expiration date of the license. Ask to see some additional form of identification so you know who you are dealing with. If the persons says he or she is representing a contractor, but canít show you a contractorís license or HIS registration, then call the contractor and find out if the person you are dealing with is authorized to act on behalf of the contractor.


Get at least 3 bids and ask for references of work the contractor has completed in the local area. Contact the people provided as references by the bidding contractor and ask questions that will help you decide whether the contractor you are considering hiring will satisfy your needs. This takes time, but saves money and aggravation in the long run. Skilled contractors are proud to take credit for their work. When speaking to the contractorís customers, ask such questions as:

  • Were you pleased with the work and how it was done?
  • Did the contractor keep to the schedule and contract terms?
  • Did the contractor listen to you if/when you had a problem and seemed concerned about resolving it?

In addition to talking with customer references, obtain references from material suppliers, subcontractors, if pssible, to determine whether the contractor is financially responsible.

Make sure all bids are based on the same set of specifications. Discuss the bid in detail with each contractor, and make sure you understand the reasons for any variations in price. Beware of any bid substantially lower than the others as it could indicate the contractor made a mistake or is not including all the work quoted by his/her competitors.


Require a written contract with the contractorís license number on it and donít sign until you fully understand the terms. Remember, if itís in the contract, you can expect to have it done. If itís not there, even with a verbal promise, you may not get what you think you are paying for.

Under state law, when undertaking a home improvement or repair job, contractors cannot ask for a deposit of more than 10% of the total cost of the job or $1,000, whichever is less unless the contractor provides a bond, approved bond equivalent, or approved joint control ensuring completion of your contract. Any such bond is in addition to the bond required of all contractors for licensure.

Make sure your contract specifies all materials to be used, quantity, color, brand name, etc. It should also specify complete cleanup and removal of deris and materials.

Never sign a blank or partially blank contract. Get a copy of the contract as soon as you sign it. You and the contractor are both bound by everything set down in the contract, so read it carefully before you sign it.

Donít pay cash, donít let the payments get ahead of the work completed and donít pay the full cost of the job up-front.


Ask the contractor if the company is insured against claims covering workersí compensation, property damage, and personal liability in case of an accident. This is important to you as a homeowner. If a worker is injured working on your property and the contractor does not have insurance, you are the one who will have to pick up the bill for medical treatment and rehabilitation if required. Ask for a copy of the certificate of insurance from the contractor.

Unlicensed contractors are a danger to your financial affairs because they expose you to significant financial harm in the event of injury or property damage. Few unlicensed contractors have bonding or insurance.

Although an unlicensed contractor may give you a low bid, the risks of possible financialand legal consequences you may face outweigh any benefits a lower bid may offer.

Helpful CSLB Publications Available

What You Should Know Before You Hire a Contractor
The 51 Most Commonly Asked Questions About Getting a California Contractors License
A Consumers Guide to Filing Construction Complaints
A Consumer Guide to Asbestos


At first, it sounds like a great deal: a contractor offers to build your construction project for half of what others charge. But when the work is done you discover faulty construction, mediocre materials, and shoddy workmanship. You discover that youíre responsible for fixing them and you contractor I nowhere to be found. Then, too late, you discover why: you hired an unlicensed contractor.

Hiring an unlicensed contractor can bring your project far more risks than savings. You can be held liable for on-the-job injuries, taxes or insurance. You can be held responsible for complying with city and county codes or correcting problems with workmanship and warranties. You can even be held liable for an unlicensed contractorís illegal acts.

How can you protect yourself? Hire a contractor whoís on the level: a licensed contractor. Licensed contractors are subject to laws designed to protect both you and your investment against empty promises and careless construction.

  1. Plan Your Project Carefully. Accurate plans or drawings will enable contractors to correctly determine the scope of the work and costs. Determine what type of contractor you will need.
  2. Shop Around. Get at least three (3) written bids from licensed contractors. Be sure each bid includes the contractorís license number. Beware of a bid substantially lower than the others; it may indicate that a contractor has made a mistake or is not including all of the work quoted by the competitors.
  3. Check The Contractorís License. Ask contractors for their pocket card, license number and trade classifications. Then check their standing with the SNBE or Contractors State License Board before you sign a contract or allow work to begin.
  4. Check The Contractorís References. Ask a prospective contractor for references in writing. Call previous customers and ask if they were satisfied with the work, or visit references and examine work the contractor has completed.
  5. Hire A Licensed Contractor. Licensed contractors are subject to laws designed to protect both you and your project, and the Contractors State License Board can assist you with most difficulties involving licensed contractors.
  6. Get Everything in Writing. No work or materials should be performed or furnished without your prior written authorization. Make all changes in writing, signed by you and the contractor, and retain one signed copy.
  7. Understand The Contract. Everything you and your contractor have agreed to must be included in your contract. Anything you sign may become a contract, so donít sign any document until you completely understand what you are signing and agree to all the terms. Don Ďt let anyone rush you.
  8. Inspect The Work. Make frequent inspections of your project, including a final walk-through.
  9. Pay Directly and Correctly. Pay by check, directly to the contractor only Ė never pay employees or salespersons.
  10. Know Your Warranty. Many contracts provide warranty language that state when the warranty period begins, the length of the warranty period, the warranty coverage, and the exclusions under the warranty. Ask your contractor if he or she has a warranty policy. If so, ask for a copy in writing and make sure that you clearly understand the warranty language.


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The SNBE can assist homeowners, businesses, managers and property owners with their construction needs. Whether you need a design professional, a general building contractor, a specialty subcontractor, or a material supplier,
call the SNBE: 707-255-2515.

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