Hiring Unlicensed Contractor Like Inviting Devil Into Your Parlor

You might think you’re saving a buck by going with their advertised cheap services, but they’re bidding without insurance, worker’s compensation, or training. MSNBC’s new investigative series “Home Wreckers” tapes a police sting operation aimed at snatching up sketchy contractors. One of the guys is accused by several homeowners of low-balling bids, which then end shoot up in price over the course of the project. He also takes customer’s money and then never finishes the repairs. The police search his car and find ecstasy hidden in it. The police show off pictures of other contractors who were found to be convicted child molesters, on probation for attempted murder, registered sex offenders, on a state’s 10 most wanted list, and on Megan’s List. They advise to only hire licensed and bonded contractors, as they have to go through background checks and drug tests. You wouldn’t want to let some ex-con in your house, or around your kids.

Home Wreckers [MSNBC] (Thanks to Jordan!)

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  1. King of the Wild Frontier says:

    “Meghann’s List”? I think that you mean “Megan’s List”, or more properly, the registry created by Megan’s Law. Unless Meghann has her own list…

    Yeah, letting unlicensed contractors in your home is tantamount to recruiting a couple random teenagers from the neighborhood and giving them the key to your front door, your ATM card and pin, and a couple of sledgehammers. It’s hard enough staying on top of licensed contractors.

  2. gorckat says:

    I love the show Holmes on Homes- Mike Holmes goes in behind bad ‘contractors’ and fixes their scam-jobs.

  3. SuffolkHouse says:

    I don’t know what I think about this. These people, the labor anyway, doesn’t tend to get paid well. Think of roofers and movers. Should we deny ex-cons the ability to work for a living. Hey, here’s a thought. How about they go back to prison and we pay their way for the next 40 or 50 years?

  4. eblack says:

    I feel like I should interject this.

    Yes letting an unlicensed contractor into your house isn’t the best idea, but my dad happens to be one. It wasn’t really intentional, he just sort of went from working for other people to dealing with clients himself, and didn’t want to do the paperwork required to get licensed and bonded.

    He typically bids considerably higher rates than other people in his area, and people are happy to pay it because he has an incredible reputation.

    So not everyone who’s unlicensed is a sleezebag. Sometimes they’re just an old guy who doesn’t like paperwork.

  5. ElizabethD says:

    Why are they all sitting on the toilet?

  6. …on a state’s 10 most wanted list…
    As in currently wanted by the police and hasn’t been caught yet?!?!

    @eblack: Does paperwork = fees?

  7. Sudonum says:

    Licensed contractors are not required to be drug tested. As an employee I can perform random drug testing of my employees, if I so choose. It is not required by my insurance except in the event of an accident.

  8. I worked for a woman once with the worst experience EVER. She hired a contractor to fix up her house, and he vanished after making big gaping holes in her house. She hired a second contractor (and yes, checked all his paperwork), and he made more holes in her house and then left. When she filed a complaint with the state board, it came to light that he had shown her his SON’S license and insurance, who happens to have the same name. She hired me to serve the son, but it turned out she didn’t really need to. The son was TOTALLY willing to testify against his father by the end of this.

  9. zibby says:

    Hey, I think I bought my copy of The Orange Box from one of these guys…

  10. JKinNYC says:

    Aren’t their homeowner’s insurance ramifications for using unlicensed contractors?

  11. swalve says:

    @ElizabethD: Because that makes them look silliest on tv and guiltiest in court. Duh.

  12. junkmail says:

    @eblack: I’m sure he’s a great guy and all, but that doesn’t make it okay. It’s still illegal.

  13. JiminyChristmas says:

    @eblack: While your parent may or may not be a sleazebag what he is doing is unethical.

    Licensed contractors are typically required to carry liability insurance and post a surety bond. Even if your father does good work and has a decent reputation, accidents happen.

    Likewise, what if for some reason he isn’t able to complete work he was paid to do, e.g.: if he becomes ill or is otherwise unable to work? With no bond to compensate the homeowner, they would be screwed.

    Also, many homeowners policies stipulate that if work on the insured property isn’t done according to local codes then the coverage may be fully or partially voided. If dear old dad is working without a license, insurance or bonding it wouldn’t surprise me if he were foregoing building permits and inspections as well.

    I work in the construction industry myself. There’s an old adage about codes, licenses, and other ‘paperwork’, it goes something like this: They don’t matter one bit…except for the one time your life absolutely depends on it. That’s another way of saying that codes and so forth may be a pain in the ass, but once your house is on fire you’re glad some minimal standards were adhered to.

  14. DrGirlfriend says:

    @ElizabethD: Because they’re all so scared that they’re crapping their pants!

  15. jitter says:

    Not all states require licensure to operate. As far as I am aware, Texas only requires specialty contractors to be licensed (i.e. electricians, HVAC, etc…). This makes the checking of references and bonding that much more important.

  16. JiminyChristmas says:

    They advise to only hire licensed and bonded contractors, as they have to go through background checks and drug tests.

    This requires a ‘your mileage may vary’ disclaimer. Laws covering building codes and construction trades are typically administered at the State level. Many jurisdictions may require a criminal background check, but whether or not you’re disqualified from getting a license really depends on the nature of the offense. Also, if the offense were more than 10 years ago it may not even have to be reported.

    As for drug testing, my state doesn’t require it. Any testing that’s done is completely voluntary and at the discretion of the contractor.

  17. jodles says:

    isnt megan’s list the list of registered sex offenders in a state?

  18. finite_elephant says:

    Illinois is another state that doesn’t have licensing for General Contractors, but does for certain specialty contractors (roofing, electrical, plumbing, as I recall). Bonding and insurance are key requirements for any GC. In addition to your insurer, your lender and local government may have requirements for contractors.

    And have somebody (lawyer, architect, engineer) look over the contract before you sign. Make sure that it holds the contractor responsible for things like safety and temporary utilities and that it spells out how and when they are to be paid, and the procedure for closing out the project and final payment.

  19. Trai_Dep says:

    Meghann’s List is a collection of Manhattanite hotties, arranged 1-10, on speed dial. Sure they SUCK at fixing things, but they’re great at hammering!

    (I’ll slink off in embarrasment now)

  20. Double edged sword, really: all sorts of people who are otherwise unemployable, but all sorts of people you never, ever want to let into your house.

  21. Darren W. says:

    Sorry, I’m going to have to go with EBLACK on this one. Just because something is illegal, doesn’t instantly make it “wrong” or “unethical.” Think prohibition, or hell, look up http://www.dumblaws.com I understand your arguments about the liability insurance, but really the insurance is protecting the contractor, not the homeowner. If he screws up and isn’t insured, the homeowner will sue him, and he will pay for it out of pocket. The same goes for injury, or code violations. Nothing unethical about choosing to pay damages out of his own pocket. And to say that working without a license is bad just because most people who do it without a permit, is like saying that driving is bad because most people break the speed limit. They are independent occurrences.

  22. StevenF says:

    @Darren W.:

    The problem though, is that the contractor’s insurance does help protect the homeowner. You can be held personally liable for damage or injury on your property, even if it is the contractor’s fault.

    According to the FTC:
    “Avoid doing business with contractors who don’t carry the appropriate insurance. Otherwise, you’ll be held liable for any injuries and damages that occur during the project.”

  23. scarletvirtue says:

    @JKinNYC: Yep, there are.
    Carriers require proof of General Liability insurance for the contractor (and sometimes the subs). It’s mainly a CYA move for all involved. And if the person is doing major remodeling and/or rebuilding their house, they need an entirely new policy because the home is considered vacant.

    It’s really involved and kind of messy … so I’ll just leave it there!

  24. Sudonum says:

    If you have a contractor working on an existing home you own, you want to get a certificate of liability insurance for him and each of his subs naming you and your mortgage holder as additional insured.

  25. Sudonum says:

    That should read “…certificate of insurance FROM him…”

  26. JiminyChristmas says:

    @Darren W.: You have it precisely backwards. The insurance and/or bond is there to protect the homeowner. If a contractor is so broke or negligent as to not carry insurance he will “pay damages out of his own pocket” with what money?

    Here’s a sadly common scenario for you: Uninsured or unbonded contractor screws something up to the tune of, say, $20,000. He has neither the insurance, bond, or cash needed to rectify the situation. Homeowner successfully sues and wins a judgment against the contractor. Contractor declares bankruptcy. Homeowner gets nothing.

  27. rg says:

    It’s hard to believe that anyone would hire a contractor without thoroughly checking them out. Forget Angie’s list or whoevers’ list, you can get all the info you need online for free. People that hire unlicensed contractors get what they deserve and homeowners insurance companies should not give them a dime.