Work with an unlicensed contractor
June 27, 2014 3:26 PM   Subscribe

I've taken some estimates for work on my large deck that will involve mostly painting, some replacing trim, and replacing some rotten joists and boards. A contractor who comes well recommend from similar work by neighbors gave a quote, but he is not licensed and bonded. A contractor who we have worked with in the past and has done good work for us, who is licensed and bonded, gave us a quote for twice as much. It's a significant amount of money.

I'm tempted to go with the cheaper quote, but I am worried about the lack of licensing. What are the risks? If someone is injured on our property while performing the work, would our insurance company cover liability and costs? Would it be possible for us to purchase a short-term extra policy to cover liability while the work is being done? Are there ways we could reduce the risk to us?
posted by anonymous to Home & Garden (11 answers total) 2 users marked this as a favorite
How much is "twice"? Is it the difference between 100k and 50k or 1,000 and 500?

This makes a huge difference since your risk with an unlicensed contractor should be used to offset potential savings.
posted by hal_c_on at 3:28 PM on June 27, 2014 [1 favorite]

Does your neighbor know how do make a deck? I ask because a deck built badly might take years to rot/fail and unless you know what you are doing and can inspect the work, your recommendation would only be for the customer service part and the aesthetics and not for the actual quality of the work. How well do you know the neighbor? Have you seen the deck this person built?

Keep in mind that part of the increase in expenses is for the license and probably paying to be bonded. I would also get a few more quotes from licensed contractors.

If your area expects you to get a permit for the deck, then they would probably expect to have a licensed contractor.

Having personally hired contractors at various price ranges, I would *never* hire the lowest-by-far bid ever again. In that sense, you do get what you pay for. But I also don't like paying a ton for home improvements. We usually have the contractor do the tedious/finicky parts and then finish up the easy parts ourselves. So in this case, I'd probably paint the deck ourselves. To me, it's worth it to do it ourselves, have it done well, or not do it at all.
posted by ethidda at 3:33 PM on June 27, 2014 [3 favorites]

It's a pretty big risk to go unlicensed and unbonded. Can you check the person's previous work and clients? My first house I had a fence built by a guy that offered a great deal and was recommended by a friend. I think he was licensed but I'm not sure he was bonded. The way the price was kept low was because he took a long time to finish the project, probably about 4-6 weeks just to build a fence.

When I moved into a new house, I used a more professional company that charged more but they built a very high quality fence in a matter of days.
posted by mathowie at 3:34 PM on June 27, 2014

If your homeowner's insurance doesn't cover worker's comp (you have to figure this out), and your area doesn't have an exemption for short-term laborers/contractors, you can get a rider, get separate worker's comp insurance or get umbrella insurance.

You can't really reduce your risk with a contract or a sign or anything.

I'd suggest to go with the known quantity.
posted by michaelh at 3:36 PM on June 27, 2014 [1 favorite]

I personally would be very unlikely to hire an unlicensed contractor, but ethidda's point is the really crucial one to me:

I would *never* hire the lowest-by-far bid ever again

I've been through a lot of home projects, and going with people who drastically underbid everyone else has burned me literally every time I've done it (until I finally learned my lesson and stopped).
posted by primethyme at 3:47 PM on June 27, 2014 [8 favorites]

An unlicensed contractor can not pull a permit to work on your house. YOU can pull a permit and hire them to do the work, but then you are liable...

I mention this because if you get work done without a permit, it will likely void any insurance claim you have on your house, including one involving an injury to the contractor themselves.

Something to think about. And going with the lowest bidder for these kind of things is often a route to misery.

(A disclaimer-the above is true in Oregon, and may be different in different states-or countries).
posted by bartonlong at 4:22 PM on June 27, 2014 [1 favorite]

Get some more estimates, because right now you only have two and they seem very far apart. You can ask the person with the higher bid why it's high; what he says will let you know what's lacking in the cheaper guy's estimate. You can also ask higher priced carpenters if there's some way to save money. I'm not saying you should try to have them do the same work for less, but maybe they're wanting to do things the best way and all you need is the "good enough" way.
posted by wryly at 4:37 PM on June 27, 2014

My landlady works almost exclusively with unlicensed, unbonded contracters (sometimes literally guys she finds on the street). Without going into details it does not result in long-term solutions and an attractive, well-maintained home. It works for her since it's a rental property, it works for me because I don't care, but if I owned the place myself and was living in it I sure wouldn't go that route. I think she's had at least three or four guys work on the roof by now and it still has the same problems it did in the first place, and a few of them actually made it worse.
posted by schroedinger at 6:21 PM on June 27, 2014

I have owned many homes. There are DIY projects that don't have ramifications if you screw it up. (Sponge painting the bathroom line green). A mess up in your deck can be fatal, especially if it's not at ground level.

I'll tell you, what I used to tell my customers: "no one ever regretted buying the best."
posted by Ruthless Bunny at 7:26 PM on June 27, 2014

Well. I have been burned by a terrible contractor who was licensed. So I have a weird perspective on this. The one thing I'll say is that this doesn't sound like a huge project. In California, if the cost is under $500 (labor + materials) and you don't need a permit, then you don't even need to have someone licensed do the job. All else being equal, I'd go for someone licensed, but I don't think the presence / absence of a license is a complete indication of what someone brings to the job.
posted by slidell at 9:03 PM on June 27, 2014 [2 favorites]

- If someone's not bonded or licensed, there's a reason for that.
- If someone is far cheaper than others, there's a reason for that.

A licensed contractor certainly doesn't guarantee you'll like the work. However, it gives you more assurance that they'll follow building standards and have appropriate insurance.

Get 2 more bids from licensed contractors and you'll have a better idea of what the job should cost. If the job isn't urgent, then wait until you can comfortably afford a licensed contractor. Any time I've gone cheap, it cost me far more in the end.
posted by 26.2 at 2:17 PM on June 28, 2014

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