Beware of Unlicensed Contractors

Last month, police in St. Petersburg, FL conducted a sting operation in an effort to clamp down on the number of unlicensed contractors working in the area.  According to a story recently reported in the Tampa Bay Times, several contractors were solicited on Craigslist to bid on projects from kitchen renovations to AC repair.  In one case, undercover investigators posing as homeowners were told by an unlicensed contractor it would take about $3,000 to fix the air conditioning, though he could knock off a couple of hundred if the homeowner didn’t want a permit.  Sadly, the only thing wrong with the air conditioning was that the batteries had been removed from the thermostat. 

The operation resulted in the arrests of at least nine suspects.  Some stated they didn’t know a license was needed to perform the services they provided.  In Florida as in most states, contractors such as roofers and plumbers are required to obtain a license.  “Unlicensed people are allowed to mow lawns and pick up trash, do some pressure washing. Other than that, most work you have done on a house or a commercial project requires a license,” said Rodney Fischer, executive director of the Pinellas County Construction Licensing Board.

The Hillsborough County Sheriff’s Office has a Construction Fraud Unit that investigated more than 100 criminal cases last year.  Unlicensed contracting is expected to become even more prevalent as the economy recovers and people are able to afford home renovations.  Unlicensed contractors are frequently guilty of felony insurance fraud, too, because they fail to obtain workers’ compensation policies. In those cases, homeowners assume massive risk: If uninsured contractors get hurt while working on houses, whoever hired them may have to pay the medical bills.

Before You Hire a Contractor

The Federal Trade Commission suggests that you check with friends, neighbors, or co-workers who’ve had improvement work done before bidding out your home improvement project.  Research online ratings and reviews for all potential contractors and get written estimates from several firms.  Keep in mind the lowest bidder may not be the best choice. Also important: know the signs of a scam.  Avoid doing business with someone who:

  • knocks on your door for business or offers you discounts for finding other customers
  • just happens to have materials left over from a previous job
  • pressures you for an immediate decision
  • only accepts cash, asks you to pay everything up-front, or suggests you borrow money from a lender the contractor knows
  • asks you to get the required building permits
  • tells you your job will be a “demonstration” or offers a lifetime warranty or long-term guarantee
  • doesn’t list a business number in the local telephone directory

Before having your roof replaced or that new water filtration system installed, take some time to thoroughly vet potential contractors, and be wary of quotes that are too good to be true.  Even the smallest project can become a large nightmare if done poorly by an unlicensed contractor.