And Why Lower Prices Do Not Always Equal Better Deals
By Victoria Figueiredo
Allow me to paint a picture for you, if you will. You’ve been saving towards a kitchen remodel for the last three years, pinching pennies everywhere you could. The time has finally come to get started, and you’re looking for a contractor to do the work (yay!). You get a few bids from the licensed companies your friends referred you to, but you decide to get a couple more just to have as many options as possible. Very prudent. You come across an unlicensed company who totally low-balls the job cost. Their quote comes in way under all the other companies you vetted, and you think to yourself “This is too good a deal to pass up! If I go with this guy, I can spend a third of what I saved up, keep the rest, and go on a great vacation!” So, you go for it, sign a contract with the lowest bidder, and let him tear into the heart of your home.
Depending on how lucky you are, this story can have a couple different endings. Scenario A: you make out like a fricken BANDIT. The work is great, you’re so happy with the results, you take yourself on that vacation you were imagining. You come back to your fancy new kitchen with an amazing tan and some tacky souvenirs. Sorry to break it to you, but this is a pretty rare outcome. Possible, but rare.
Come along with me to Scenario B: you pay your deposit, the contractor starts work on your kitchen, and he asks you to buy the materials for him, since that wasn’t included in his asking price. Fine, no problem. You go to your local hardware store, realize you have no idea what you need, spend a week researching, end up buying too much of the wrong material, and start the process over again. You finally get what your contractor needed after losing a chunk of change and a bigger chunk of your project timeline, and you’re getting a little antsy. You reach out to your contractor, but there’s no answer. You try again the next day, nothing. Your contractor just ghosted you. You try to file a claim with your insurance to recoup your losses, but since the company was unlicensed, you voided your homeowner’s policy. You’re now out god knows how much money, and you’re left with a gutted kitchen and a stack of materials you don’t know how to work with. Again, sorry to break it to you, but this is a pretty common outcome. Horrible, but common.
Now, you may be asking yourself “Vicky, why did you make me read all that just to say that some contractors are more reputable than others?” You miss the point, my friend. This is not a choose-your-own-adventure story where you overlooked some vague clues hinting that the path you chose would end in heartbreak. There are obvious signs and red flags all over the place when it comes to dealing with sketchy contractors. Let’s get down to the nitty gritty on why the license and insurance really matters:
- Trust Levels
Trade licenses are crazy expensive to obtain and maintain. Our unlimited electrical contractor went to school for years, worked as an apprentice to learn practical skills throughout those school years, sat through a ridiculously difficult test that he had to pay hundred of dollars for, and then, when he finally passed that test, he had to pay for a license that would allow him (and the rest of us) to do electrical work in the state of Florida. An unlicensed electrician owns a pair of wire strippers and maybe (MAYBE) a pick-up truck. You tell me, which one of them has more to lose? A licensed contractor has too much on the line to do sub-par work or scam you. Not only are they risking losing their license, they’re risking their livelihood and all the time they invested into their career. The unlicensed guy has much less to lose, so really, you’re taking a gamble on a stranger’s morality. Doesn’t sound like a fun game to me.
- Skill Level
It is entirely possible that the unlicensed contractor you hired is a MENSA type who didn’t need school to be the best in his trade. That’s a wonderful thing to believe in your heart. Chances are, though, the unlicensed contractor you hired either didn’t care enough or didn’t have the resources to go through the schooling, testing, and licensing costs that the licensed contractor went through. That means your guy doesn’t have the formal training and practical knowledge necessary to complete your project so it’s up to code and ready to pass an inspection. Their work might end up being passable, but it also might end up burning your house down in a few months. Refer to the photo we’re using as a title card for this article. That huge book contains all the code, laws, and by-laws that a licensed and insured contractor is aware of before ever starting to work in their trade. All it takes to find out whether the contractor you’re courting is licensed is a quick visit to your state’s licensing website. Spend two minutes online to save yourself a huge headache later, please and thank you.
- Rear-End Coverage
Unlicensed contractors legally and physically cannot pull the permits they need to do the work you’re after. Cities, counties, towns, and entire states will not let any unlicensed workers obtain any kind of permit. That means if you go with the unlicensed guy and do everything under the table, you’re risking at the very least some hefty fines, and at the very most a pretty wild lawsuit/jail time. Beyond that, the licensed contractor should also be INSURED. Ask for proof of worker’s compensation and liability insurance and then double-check that everything is up to date and paid for. This alone might save you everything you own if one of your contractor’s employees ends up getting hurt while they work on your home, or if someone busts a pipe open when drilling a hole for that sconce you really wanted by your kitchen sink. Hiring someone unlicensed and uninsured usually voids your homeowner’s insurance, any legal recourse you may have been able to take, any contract written up by the contractor, AND product warranties. I doubt you want to get yourself into that kind of mess.
That’s just the short list on why you should never even entertain offers from an unlicensed and/or uninsured tradesman. In real life, the hazards abound. If you’re taking on a big project, or even a small repair, you absolutely need to do your homework, thoroughly research each contractor you’re considering, and then double check that they have all the paperwork that protects you AND them from financial ruin and legal repercussions. To paraphrase modern philosopher and athletic legend Mr. Stone Cold Steve Austin: that’s the bottom line, because Stone Cold (or in this case, Florida law) said so.
P.S. Straight from section 2.13 of the Florida Contractors Manual, “Any person who falsely holds himself out to be a licensed contractor or who engages in contracting without first obtaining a license is guilty of a first degree misdemeanor, and a second offense is a third degree felony.” Just so you know that we know, and we know that you know.
Questions? Comments? Concerns? Drop them in the comments section! We’re here to hear out your contractor horror stories and your home-improvement successes.