Can You Sue an Unlicensed Contractor?

Nobody wants to hire an unlicensed contractor, but what happens if a homeowner or property owner is tricked by a specifically slick contractor?

What happens if a homeowner hires someone that they didn’t realize was actually unlicensed?

In either case, there’s serious criminal consequences to performing unlicensed construction work in California and beyond – and depending on the situation, homeowners are certainly in their right to receive financial compensation for any damages caused as a result of unlicensed work.

The process is actually rather straightforward, but it is a little complicated as well, like most legal-related procedures. In this article, we’ll try to simplify what happens when an unlicensed contractor is caught doing illegal work – and what homeowners and the guilty contractors can expect from the process.

Do You Need A License To Do Construction Work?

Legally speaking, it is usually, although not always, illegal to do construction work in the United States without a license. 27 out of the 50 states in the United States outright require contractors to have licenses to do contractor work over a specific amount (usually $500), like in California.

There are 13 states that don’t require a contractor’s license – but they have additional requirements and bureaucratic land to cross. To make it even more confusing, 9 more states have their contractor’s requirements set out by each individual county or city you’re doing business in!

Legal Consequences For Unlicensed Contractors

In states that require licensed to do construction work, unlicensed contractors face stringent consequences, but the reality is that most small or first-time offenses are handled fairly by state boards who don’t want to discourage good contractors who made one mistake from being a part of the community.

The local board will usually review your individual case and make a judgment based on if the unlicensed contractor is a repeat offender or not, and the size and scope of the issue they caused – for example, if the loss of property was great, or if someone lost their life because of unlicensed work, they will most likely face criminal charges.

In less serious cases, you’re usually given a warning if you’re performing work with, say, an expired license that you forgot to renew. In this case, if you’re a first-time offender and you didn’t cause any harm, you’re usually let off with a warning as well. As we said, the goal of these regulators is to encourage good, safe behavior, not punish people for making small mistakes.

The penalties only escalate upon repeat offenses. In California, for example, you might face a Supreme Court judge and up to a year in jailtime for multiple offenses – in addition to fines of $15,000 or more. And that’s not including legal fees or punitive damages owed to the client!

Suing An Unlicensed Contractor For Damages

In many cases an unlicensed contractor will have submitted subpar, defective, dangerous or otherwise shoddy work to their client. 

In the worst cases, someone faces injury because of this work, but in many cases, it just means the homeowner has lost money – not only to the unlicensed contractor, but also the money they will have to spend to get a licensed contractor to fix it.

In these scenarios, the first step is to file a complaint with your state licensing board. In addition to criminal charges, homeowners will usually seek restitution via civil court. Most states allow you to file a Small Claims Court suit against the contractor for projects that cost under $10,000. For projects that cost more than that, the CSLB recommends you speak with an attorney.

In either case, if the contractor is already going to criminal court or facing criminal charges, the chances are you’ll easily win your civil case. All you’ll really have to do is bring proof of the money they took from you and voíla, your money back.

The Importance of Hiring or Being A Licensed Contractor

Obviously this is our opportunity to shout it from the mountaintops: HIRE A LICENSED CONTRACTOR!

Situations like this hurt contractors, homeowners, developers, governments, civil workers and, heck, it even hurts the unlicensed contractors too. This is the whole reason regulatory agencies like the CSLB exist – to protect everyone from the consequences of sketchy contractors!

And it’s no cakewalk for homeowners, either! Even though you have a direct and well-established pathway to getting your money paid back, going through the court to get restitution is a process that can take years – if you ever see the money from this unlicensed contractor, someone who has already established they cannot be trusted.

Unlicensed work harms all of us – that’s why you should always look up your contractor’s license, or to make sure that you always have your license up to date. Any slip-ups could cost months of time and thousands of dollars to fix. Do the work ahead of time and you won’t have to worry down the road!

Additional Reading

CSLB – Unlicensed Contractor Complaint Process