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After the Storm: Beware of Unlicensed Contractors!

Following the destruction of Hurricane Matthew, many Florida homeowners are in need of home repairs.  Before you hire someone to do those repairs, however, keep in mind that unlicensed contractors can leave you with an even bigger mess to deal with.  Here are some good tips from the Florida Department of Business and Professional Regulation (“DBPR”) to help you avoid falling victim to an unlicensed contractor.

Why Hire a Licensed Contractor?

  • A licensed contractor has the required education, experience, insurance and qualifications to obtain a license.  They must pass a competency examination before conducting business.
  • Licensed individuals are screened for prior criminal history.
  • The DBPR can discipline and even revoke a license if the contractor does not live up to professional standards.  This is a not a total safeguard, but is a strong incentive for the licensee to do good work.
  • You may be able to sue the licensee in civil court for problems related to the work done.

 Dangers of Hiring an Unlicensed Contractor:

  • Poor qualifications.  Unlicensed contractors typically do not have the education, insurance, or qualification required of a licensee.
  • Poor quality work.  Unlicensed contractors typically do poor quality work or do not finish the project, leaving the homeowner on the hook to repair or finish the project.
  • Possible criminal background.  Unlicensed persons often have criminal backgrounds that may include fraud, theft, violent crime, sexual offenses, and substance abuse.
  • Likelihood of being the victim of a scam.  Unlicensed persons often disappear after taking your money, and the DBPR cannot discipline an unlicensed person, help get your money back, or require the person to finish or improve the work done.  Scams in the construction industry, especially home improvement, are sadly widespread.  Con artists pose as contractors and often target vulnerable people and take advantage of homeowner’s need for urgent post-hurricane property damage.
  • Limited resources for broken contracts.  When you have a dispute with a licensed contractor, you call the DBPR, which has the authority to discipline and even revoke the license.  This gives the licensee more incentive to play fair.  However, this type of action is not available against unlicensed contractors and homeowners often find the only answer is an expensive, and generally futile, civil suit.
  • No insurance and liability for injuries to others:  You may end up being liable for personal or financial injuries to others.  An unlicensed contractor typically is uninsured and will have no way to pay you back for any property damage.
  • No coverage under homeowner’s policy.  Most homeowner policies require that work must be done by a licensed contractor and provide no coverage for work that is not.
  • Noncompliance with building codes.  Most projects, even small ones, require permits and inspections that unlicensed contractors ignore or are unfamiliar with.  If your project isn’t permitted or doesn’t comply with the building code, you may have to remove or repair the work at your own expense and be subject to fines by local government.

 Red flags that you may be dealing with an unlicensed contractor:

  • No license number in advertisement or posting.  Licensed contractors are required to list their license number in all advertisements. Rule of thumb: Do not do hire anyone that does not have a license listed in their advertisement, which can be verified on DBPR’s website.
  • Advertisement or invoice lists only a name and telephone numberA legitimate business provides sufficient contact and licensure information on an invoice.
  • A claim to be “licensed and insured” but cannot produce a DBPR issued license.  This type of claim often merely means that the person has a driver’s license and automobile insurance.
  • Want all or most of the money up front or will only accept cash.  Never pay cash for your home repairs or improvements.
  • Want check written to them individually or to “cash.  Be cautious of writing checks payable to individuals when a company has contracted to do the work.   Include a note on check or money order about what the payment is for.
  • Unmarked vehicle and/or out-of-state license plate.  Contractors licensed by the DBPR are required to display their license number on the vehicle.
  • Blank or generic invoice.  Contractors licensed by the department are required to display their license number on an invoice.
  • Oral agreement only.  The best business practice is to put everything in writing, including a detailed description of the work to be completed, an anticipated completion date and the total cost.
  • Ask you to pull the permitPulling an Owner-Builder permit is risky business. Licensed contractors must pull the permit themselves.
  • Unsolicited phone calls or visits.  Some reputable contractors do business this way, but it is generally a tactic of the unlicensed.  Be very wary of anyone who offers a bargain price, saying they are doing a job in the neighborhood and have leftover materials.
  • High pressure sales pitches or scare tactics.  Don’t be pushed into hiring anyone, even during a state of emergency!  Dishonest people will prey on your fears.

Choosing a Licensed Contractor:

  • Before you hire a contractor, ask to see a DBPR issued license.
  • Ask to see multiple forms of identification, such as a driver’s license, all contact information and keep copies for your own file.
  • Ask for references. A legitimate contractor will be happy to provide you with the names and contact information of recent customers.
  • Get a written estimate from several licensed contractors. Make sure the estimate includes the work the contractor will do, the materials involved, the completion date, and total cost.
  • Beware of contractors who claim to be the fastest or the cheapest. Hiring them could result in poor workmanship, inferior materials or unfinished jobs.
  • Get a payment schedule in writing.  Many contractors ask for a 10% down payment and then periodic payments during the project.  Document what must be accomplished before further payments are made and conditions that must be met before any final payment.  A contractor that receives more than 10% down must apply for needed permits necessary within 30 days after the date payment is made and start work within 90 days after the date all necessary permits are issued, unless you agree to another arrangement in writing.  It is a criminal offense for a contractor when a contractor does not follow this law.
  • Check with your local building department about any permit requirements.
  • Contact your insurance agent first to verify your insurance covers the repairs before you sign a contract and the process for filing a claim if needed.  You do not have to tell the contractor how much your insurance company will pay for repairs, but if you do, get the contractor’s estimate first.


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