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How an Unlicensed Contractor Can Cost You More than What You Planned to Save

Every homeowner should know by now that hiring an unlicensed contractor is illegal and foolish. Yet many homeowners are still doing it and many of them ended with regret. Why is that?

Knowledge doesn't always translate into action.

A similarity can be drawn with DUI. Everyone knows driving under the influence of alcohol is bad. But how about just 2 drinks? How about if it’s only a short distance to drive? A human mind may try to rationalize certain action that the person knows is wrong. Some people would take the chance until they are hit with the consequences of their action.

In the case of hiring unlicensed contractor, most homeowners’ goal is to save money, which is nothing wrong at all.

Agreeably, cost efficiency is an important aspect of a project.

However, many homeowners mistaken cutting cost to equate with cutting corner, which is something that must never happen in a project. The ancient proverb of “penny wise and pound foolish” properly applies in this matter. The table below highlights several items that differentiate a licensed contractor from an unlicensed contractor. It is by no means an exhaustive list but at least it gives some ideas on the benefits of hiring a licensed contractor.

Let us take a scenario as an example to drive home the point of the potential pitfalls in hiring an unlicensed contractor.

Take the example of a multi-million dollar home with a sloping backyard. The homeowner wants to extend the flat usable backyard by building a retaining wall and backfill additional dirt into it. There is a public street below the backyard with multiple cars parking and passing-by. There are also neighboring homes below the backyard. Now this homeowner decided to hire an unlicensed contractor to save a few thousand dollars.

What could go wrong?

First of all, these are some questions the homeowner ought to ask:

  • What are the dimensions and specifications of the retaining wall?

  • What number reinforced bars?

  • How many strands of the rebars?

  • How deep will the footing be?

  • How wide is the footing?

  • Will CMUs be utilized?

  • Or straight out formworks for pour-in place concrete?

  • How thick will the retaining wall be?

  • What psi concrete will be used?

With that said, would the unlicensed contractor know the answers? (Well, if they do then they should not be unlicensed, which will bring many more questions on the reason for them being unlicensed).

Indeed, a licensed contractor would and should address all of those questions even before taking on the contract. In fact, a licensed contractor would ask for a structural design of the retaining wall.

So, many things could really go wrong.

For one, the workers may get hurt. The homeowner will be directly liable for the workers’ injuries. And it will be a nightmare that the homeowner wants to avoid if the injury is severe. Next possibility would be building a retaining wall that has insufficient strength to carry the backfill load, which could lead to spillage on to the street below. If that happens, then homeowner would be in for some unwanted lawsuit from the city, the HOA (if any) and the neighbors below.

The few thousand dollars in “savings” can quickly evaporate.

It is also possible the work may appear to be done correctly for a time being. Then cracks in the retaining wall would slowly appear. Who would warranty the work? Most likely an unlicensed contractor would not come back even if they can be found. There would be many other “what-if” scenarios that could happen by hiring an unlicensed contractor. It would be much better for the homeowner to see the long-term best value by hiring a Licensed Contractor in the first place.

Beware of contractors who advertise "too-good-to-be-true" pricing but cut corners to give you that imaginary low price.

At the end of the day, homeowner needs to realize that it is illegal and unwise to hire an unlicensed contractor. Avoid hiring mistakes. Do your research, ask the right questions, and don't take shortcuts. A properly vetted and experienced licensed contractor will bring homeowner a peace of mind.

A peace of mind is truly priceless.




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