The Importance of Hiring a Licensed Contractor

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What are the Differences Between Licensed and Unlicensed Contractors?

It is a privilege, in the state of Florida, to be a licensed contractor. There are many requirements one is required to meet in order to obtain and keep a contracting license in Florida, not to mention the expense. To become licensed, a person must have the required education, experience, insurance and qualifications. They are also required to pass a competency examination before practicing. Licensed individuals are screened for prior criminal history. The department can discipline and even revoke a license if the person doesn’t live up to the professional standards imposed. This is not a total safeguard, however it is a strong incentive for a licensee to meet a certain standard of acceptable work. You may also be able to sue a licensee in civil court for problems related to the work performed.

In contrast, an unlicensed person may have poor qualifications. They typically do not have the education, experience, insurance or qualifications required of a licensed contractor. This may end up leading to poor quality of craftsmanship or an unfinished project, leaving the homeowner on the hook to repair or finish the job. Unlicensed individuals are not subject to criminal background checks, which could open a homeowner up to hiring someone with a history of: fraud, theft, violent or sexual criminal offenses and substance abuse. Homeowners also have limited resources when it comes to disputes with an unlicensed contractor. The homeowner could end up being financially and personally liable to others if someone is injured or there is damage to property. Unlicensed individuals are not subject to discipline by the department and civil suits are expensive and generally futile.

There are several other factors homeowners should be aware of before hiring someone for home improvement work. Most homeowner policies require that work be performed by a licensed contractor and provide no coverage for work that is not. Non compliance with building codes is another issue that can arise when you use an unlicensed contractor. Most projects require permits and inspections that unlicensed contractors may be unfamiliar with or completely ignore. Work that is not permitted or doesn’t comply to building codes, may be subject to required removal or repair at the homeowner’s expense, as well as imposed fines by local government. The homeowner may also be subject to property liens by subcontractors or suppliers.

Choosing a Licensed Contractor

Before hiring a contractor, always ask to see a DBPR issued license. This is the license issued by the Florida Department of Business and Professional Regulation. Always ask to see multiple forms of identification, such as a driver’s license, to verify the names are consistent on both licenses. Keep copies of them for your own file. Verify all potential contractors’ licenses are current and active by calling 850-487-1395 or visiting A legitimate contractor will be happy to provide with references, so make sure you ask for them from recent customers.

It is important for the homeowner to get a written estimate for the work that is to be done. This should include the work that the contractor will do, cost of materials involved, completion date and total cost. Get a payment schedule in writing. Many contractors ask for a 10% down payment and then periodic payments throughout the project. Document what must be accomplished before further payments are made and conditions that must be met before any final payment is made. A contractor that receives more that 10% down must apply for necessary permits within 30 days after the date payment is made and start work within 90 days after the date all necessary permits are issued. It is a criminal offense when a contractor does not follow this law.

Beware of contractors who claim to be the fastest or cheapest! You usually get what you pay for, which could mean poor work, inferior materials and an unfinished job.

Red Flags to Watch Out For!

  • No license number on the business card, vehicle or advertisement. Department licensed contractors are required to display the license number on the vehicle.
  • Invoice that lists only a name and phone number. Legitimate businesses will have contractor name, address (not PO BOX), phone number and license number.
  • Being asked to pay upfront or only in cash. Avoid paying cash and always require an estimate and payment schedule.
  • Avoid writing checks for “cash” or to an individual, when a company is contracted to do the work. Always note on check or money order what payment is for.
  • Avoid contractors who ask you to pull the permit. Licensed contractors are required to pull the permit themselves.
  • Unsolicited calls or visits, this is generally a practice of unlicensed individuals. Avoid those who offer bargain prices, because, “they are doing work in the neighborhood and have leftover materials.”
  • Don’t be pushed into hiring anyone, even if it’s an emergency. Dishonest contractors will prey on your misfortune.

Report unlicensed activity to DBPR to help protect yourself and fellow homeowners from falling prey to this dishonest practice.

Source: “Why Hire a Licensed Person?” Web blog post. Consumer Tips. Florida Department of Business & Professional Regulation.

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