Maybe you’re someone who’s always been good with your hands and dabbled in minor projects around your home and helped family members with small issues in their homes… Well, with taking on such small projects, it’s time you consider getting licensed as a contractor in the contractor area of your choice.
True enough, as easy as it was to fix those minor issues in your own home and for friends and family, it can be pretty tempting to cash in on your talents and start taking on projects on your own and accept payments for the work you’re doing… As tempting as that may be, don’t do it; there are dire consequences you’ll face if you get caught.
But people hire an unlicensed contractor all the time. It’s very common, mainly because an unlicensed contractor performs the work of licensed contractors but at a much lower rate.
Because they do not possess the license to charge higher prices. But if you’re going to work on difficult projects, wouldn’t you want to receive full payment for the work you’re performing?
At the end of the day, there are just too many risks involved in working without a license for you and anyone who hires you.
Why Is Working As An Unlicensed Contractor Bad?
According to the Department of Defense, in 2018, over 15 million contracts with contractors ended up getting indicted for contracting fraud; Those contracts totaled over $334 billion (about $1,000 per person in the US). You don’t want any parts of that.
Obtaining your license isn’t as hard as you might think, either. For example, if you want to obtain your Georgia contractor’s license, passing a single exam is required if you want to go into plumbing or air conditioning; For general contracting, an additional exam is required. Indianapolis Plumbing Pipe Repair Contractors – Plumbing Tips
The point is that getting your license isn’t an impossible feat. Once you get your license, you can start taking on big projects, overseeing them, and ensuring your construction team is safe. But if you still choose to operate “under the table,” here are the consequences you’ll potentially be facing if you get caught.
Consequences of Performing Contracting Work Without a License
Here’s a list of everything you can expect from working without a license. Check these out:
Criminal Sanctions
Every state has a different criminal sanction for contracting without a license, but it is typically very similar in the overall realm of it all. If you’re caught working without a license, you can get a misdemeanor charge upwards of $1000 and jail time or probation for a year.
If you’re charged with a felony, you can get charged upwards of $5,000 or more and jail time or probation for up to five years.
Administrative Sanctions
When working without a license, you can expect to receive administrative sanctions in addition to criminal sanctions.
These sanctions also vary from state to state, but depending on where you live, you can be charged as much as $10,000 if you receive an administrative sanction in Florida.
Clients Can Sue You
If you trick a client into thinking you’re a licensed contractor and something goes wrong, and they decide to sue you, they can file claims against you for unfair and deceptive practices and restitution, among other damages.
These charges and sanctions can be avoided if you simply get your contractor’s license. So don’t even risk your life or talents unnecessarily; Legitimate your skills and talents so that you can legally profit from them.
You May be Looking at Contract Disputes
When you work as an unlicensed contractor, you are more likely to be in disputes with your clients. This is because they may have issues with the work that you do. Some clients may even refuse to pay you after learning that you are working without a contract.
Enforcing contracts with such clients becomes much harder, too.
Trouble With Insurance
Several insurance policies require licenses and contractors to be legitimate. When you go in as an unlicensed contractor, you are more likely to be turned down for accident coverage. This is potentially risky due to the liability that will fall on your shoulders should there be project damage.
Penalties And Fines
These two are some of the most obvious and least scary outcomes of working as an unlicensed contractor. The fines may be substantial, and you may even get penalties, but these vary as per the local laws and the nature of the work you do.
Damage to Your Reputation
An unlicensed contractor can only work for as long as people are recommending them or finding their work to be good. It all goes away if a client finds out you work without a license, and they share that information with others. This badly harms your reputation in the industry. You are less likely to get more clients, solely due to their lack of trust.
Most people would prefer paying more than your rate because they will be licensed and if anything goes wrong with their work, they can be legally supported.
Missing Opportunities
With the lack of a license, you are more likely to miss out on huge contracts. Especially government contractors that prefer contractors with a license. Missing out on large contracts such as these can result in poor job satisfaction.
Employment Issues
Working under an unlicensed contractor can mean that you may face financial or legal issues. In addition, you may also find yourself in a difficult position if there are legal disputes such as during a workplace accident.
And it’s a Wrap!
Thus, if you are an unlicensed contractor or work under someone who is, you must be careful about the consequences. Those enlisted here are not exhaustive as there may even be other trouble that you may invite if anything goes wrong while you are providing service.
It’s best to ensure you have proper licensing as it will save you a lot of trouble in the future. Your skills should come with a license as it will make you even more trustworthy. Contact your local regulatory authorities to find out more.
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