How To Deal With Unlicensed Contractors Operating In Your Area

Unlicensed contractors have an unfair advantage in the construction market. They don’t follow the rules that are designed to protect everyone in the process long-term – just so they can make more money in the short term.

It’s in everyone’s best interest to protect their communities from illegal contracting services. Here’s the easy way to make sure your area is safe from dangerous contracting practices.

When do you need a license?

Almost all construction jobs in California require a contractor’s license. 

Any project that costs more than $500 for labor and materials requires a California contractor’s license, so realistically – that’s any project at all. 

Are contractor’s licenses from other states valid in California?

It depends. State licensing requirements don’t transfer unless both states have something called a “reciprocity agreement”. 

These agreements allow contractors licensed in other states to legally work in California without having to obtain a California contractor’s license. 

What states does California have reciprocity agreements with? 

California has contracting reciprocity agreements with only three states: Arizona, Louisiana, and Nevada. If someone is licensed in any state except Arizona, Louisiana or Nevada  – like Kentucky or Indiana – they are unlicensed in California. Any work they perform in California over $500 is illegal. 

Why should you do something about unlicensed contractors?

Contractors who operate without a license cause harm to everyone involved.

Unlicensed contractors have no incentive to deliver a high-quality product that is up to code. They often deliver a poor, shoddy or even dangerous final product in order to make a quick buck. Many times they may promise something they have no intention of delivering.

Licensed contractors lose work to unlicensed contractors. They also lose hard-earned trust from their customers who think all contractors are to be viewed with suspicion – even licensed ones. 

And when licensed contractors are brought in to fix an unlicensed contractor’s work, the poor work quality of unlicensed contractors is often a giant hassle to fix.

So how do you report an unlicensed contractor in California?

Gather Information

The first step in dealing with an unlicensed contractor is to gather information that they are performing work without a valid California contractor’s license. Anything and everything you may be able to find as evidence – estimates, payment receipts, advertising materials, etc. – will build a case for the proper authorities to take action.

Report It

Once you have enough information to prove that there are unlicensed contractors performing construction jobs in your area, you’ll need to contact the Contractors State License Board (CSLB) and report them. 

They have two ways of doing this. You can file a complaint about illegal contractor advertising. Or you can submit a lead referral to the Statewide Investigative Fraud Team (SWIFT). Provide as much information as you possibly can, and they will take the necessary actions.

Show Your California Contractor’s License On Every Job

One thing you can do to be proactive in stopping unlicensed contractors from performing work is to make showing your CSLB-issued contractor’s license to every consultation with a prospective client an established part of your process.

By showing your license to every lead, it establishes a standard for people that legitimate contractors always show their license. 

This can combat illegal contractors as people looking for contractors are more likely to ask for a license early on – destroying the incentive for unlicensed contractors to try to cut corners and protecting the public.

A contractor’s license helps protect everyone in the process, from contractor to end client. Learn more about how a contractor’s license is not only necessary but beneficial to any construction project by contacting CSLS today!