Unlicensed Contractors - What You Need To Know
By Ian Kravitz / August, September, October 2012
We all like to save a buck where we can. Hiring an unlicensed contractor to save a buck can bring great risks to you and your family home. While embarking on a home improvement project can be an exhilarating endeavor, doing so requires you to place your trust, future happiness, and well-being in the hands of strangers. That is why it is essential you choose a contractor carefully, without cutting corners. Potentially saving a dollar in the short run can cost you dearly in the long run.
Unlicensed contractors tend to be unreliable. They perform work in a shoddy fashion with inferior materials, and in violation of building codes. An unlicensed contractor is unlikely to follow the required construction standards adhered to by licensed contractors, leading to inferior and substandard workmanship that can end up costing you significantly more than if you had hired a licensed contractor at the outset.
An unlicensed contractor is unlikely to possess liability insurance. That means, if your neighbor is injured or his/her home becomes damaged as a result of your contractor, you can be held personally liable for any such damages or injuries. Since your homeowners' insurance policy likely excludes claims arising from unlicensed construction practices, you face the risk of financial ruin to satisfy such liability.
Even if it is your own home that is damaged and damaged as a result of a later casualty, your insurer may deny your claim, if it can be shown that unlicensed work was performed on your home. As unfair as it sounds, you may also be responsible for the medical bills, lost wages, and other damages sustained by your unlicensed contractor, if he or she is injured while working unlawfully on your home.
Besides these severe financial consequences, there are other risks to you, as well. For instance, since your unlicensed contractor is unable to obtain permits for the work being performed on your home, the local permitting authority will not be inspecting such work for compliance with applicable codes, and to ensure that the minimum standards for construction have been followed.
You can also be found in violation of your community governing documents for having performed unpermitted work. If that happens, you will be unable to obtain another permit to perform any work on your home, you will likely face stiff financial fines, and you will be unable to sell or refinance your home until such problems are rectified. Your insurance and mortgage companies can find you in default of your mortgage and insurance policies, and you can find yourself uninsured. Then you could be required by your mortgage company to satisfy your mortgage in full or face foreclosure. You are also at risk for prosecution for aiding and abetting of unlicensed contracting. Along with the potential of such a conviction, you can face additional civil penalties of up to $5,000 for each violation.
Be careful to protect yourself before signing a contract. Confirm that your contractor possesses liability and worker's compensation insurance, and the requisite licensure from the state (www.myfloridalicense.com) and county (https://dpep.-broward.org/BCS/default.aspx in Broward County) where the work will be performed. Make sure that your contractor has been in business for a significant period of time and authorized to do business in Florida (www.sunbiz.org).
Finally, you should always obtain counsel from experienced construction law attorneys to review any proposal or contract before you sign, so they can help steer you clear of potential pitfalls that may arise during a construction project. Being prepared from the outset is often the difference between having an exhilarating home improvement experience or a nightmare.
Ian Kravitz is an owner and partner in Malka & Kravitz, P.A. (Your Construction Law Firmô) in Fort Lauderdale. He is board-certified by the Florida Bar as an expert in construction law, and is AV-rated by Martindale Hubbell as possessing the highest possible ratings in both legal ability and ethical standards. A Parkland resident since 1978, he lives with his wife and their two children.
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