Beware of Unlicensed Contractors

Oftentimes, clients will come to me saying that they’ve had problems with a contractor whom they hired for a remodel or other construction work on their home. Frequently many of the problems result from their use of an unlicensed contractor. Many people are unaware that a simple online search to see if a contractor is licensed or not is available and could save them many headaches.

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When a person uses an unlicensed contractor as opposed to a licensed contractor, their options to resolve construction defects or the contractor’s breach are severely limited. However, multiple avenues of remedies are available to resolve the construction dispute with a licensed contractor and potentially to make the homeowner whole.

Arizona law requires all construction contractors doing work over $1,000 to be licensed with the Arizona Registrar of Contractors. Contractors violating this law are subject to criminal prosecution. A homeowner could also sue an unlicensed contractor for shoddy work, although the homeowner may find recovering money from an unlicensed contractor an impossible task. Further, a homeowner could report the unlicensed contractor to the Arizona Registrar of Contracts for criminal prosecution for contracting without a license, but that doesn’t put money in the homeowner’s pocket.

Hiring an unlicensed contractor usually means that a homeowner allowed “unpermitted” construction work to be performed as well. Because the necessary permits were not obtained, the homeowner may be unable to sell their home. Home sellers are required to provide the buyer with a Seller’s Property Disclosure Statement listing all known work and issues with the home; they incur a risk if they do not provide all the details of that unpermitted work and are responsible for all the costs to rectify any related defects before they can complete the sale.

In contrast to hiring an unlicensed contract, if a homeowner hires a licensed contractor who does sub-par work or breaches a contract, a homeowner has at least three potential remedies:

Recovery for breach of the two-year warranty Arizona law requires, which gives the Arizona Registrar of Contractors jurisdiction to force them to fix problems or risk having their licensed sanctioned or revoked.

Recovery of up to $30,000 from the contractor recovery fund administered by the Registrar of Contractors for defective construction work performed by a licensed contractor.

Third, the homeowner can also file a civil lawsuit against the Contractor.

Arizona law further protects homeowners by requiring a licensed contractor to have a written contract with the homeowner spelling out the terms of their agreement. Not only can the licensed contractor be sanctioned by the Arizona Registrar of Contractors for failure to provide that contract, the contractor will be prohibited from recording a mechanic’s lien against the home if the home is occupied by the owner.

Our firm has years of experience in representing homeowners who experience problems with contractors, licensed or unlicensed. Remember, at Hymson Goldstein Pantiliat & Lohr, PLLC, Our Business is Your Peace of Mind®.

Remember at Hymson Goldstein Pantiliat & Lohr, PLLC, Our Business is Your Peace of Mind®.

Written by Attorney John Lohr, Jr.,

The information contained herein is general information not legal advice. E-mailing attorneys from this website does NOT establish an attorney/client relationship. A formal attorney/client relationship begins after a conflicts check and engagement agreement are signed.

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