What Happens If a Contractor Loses His License?
Ask any contractor what the most important piece of equipment they have and they’ll all tell you the same thing. It’s not a screwdriver or a laptop or a backhoe.
No, the most important piece of equipment any contractor can have is a little number in a database: their contractor’s license.
Not only is a contractor’s license a testament to their skills, credibility, and adherence to industry standards in the U.S., but in most states, it’s a legal requirement carrying serious punishments for violation.
But what happens if a contractor loses his license? We don’t mean that literally – even if you lose the contractor’s license card you’re given by your state’s contractor’s licensing board, you can just order another one. It’s not like you’re suddenly an unlicensed contractor.
No, we’re talking about situations where a contractor has lost their license – either through poor or illegal behavior on a jobsite, working on jobs outside of your classification or simply allowing your license to expire in your state. This is truly losing your license and the ramifications are staggering for any contractor.
So let’s say – hypothetically, of course – that you’ve lost your contractor’s license in some way. What happens now? What should you do if you lose your contractor’s license?
Read on to find out.
I Lost My Contractor License (Card or Certificate) – What Now?
Lost your contractor’s license? As in, the physical card that you carry around?
Maybe you always keep it on hand to show to clients, or you just keep it on hand in case you need it (in which case, we salute you!).
If you’re missing the physical card or certificate of your contractor’s license, there’s no need for a meltdown; you are literally only missing a piece of paper or plastic.
Visit your state’s contractors licensing board website – like the CSLB in our home state – and they will surely be able to quickly and efficiently get another one out to you.
The Immediate Aftermath Of Losing Your LIcense
When you’ve realized you’ve lost your license, it’s critical that you immediately stop working ASAP.
The first thing you need to do is get your contractor’s license again. Every minute your job site is up, you not only risk further damage to your reputation, butyou could face criminal penalties as well.
It may be tempting to try to find some loopholes to do contracting-related work while your construction sites are on hold, but don’t even think about it. You basically cannot do anything construction related.
Here’s some of the things you can’t do without a valid license:
- You cannot legally bid on or accept new projects.
- You cannot work on existing projects
- You cannot sell yourself as a licensed contractor
- You cannot hire or outsource any of your existing work directly
The Coming Storm
The immediate impacts of losing current jobs and not being able to take on new jobs are obviously cataclysmic for any contractor.
Sadly, the immediate woes of losing your contractor license are just the beginning. In most cases, you will have done work illegally after finding out your license has expired or otherwise been suspended.
Here’s a few issues that are right around the corner when you lose your license. Ultimately, losing your license hits you where it really hurts: your wallet.
- Financial Loss: Clients don’t care if you’ve lost your license – they just want the job done. In most cases, your project is now over and it’s someone else’s project now. And not just this job – but any job is out of your reach until you get your license back.
- Legal Liability: In most U.S. states, doing any contract work without a license results in serious penalties for the contractor who did that work. You could be looking at months of legal work (and all the insane costs associated with that)
- Reputation Hit: Once you’re known as a sketchy contractor who does work without a license, you may always be tainted by that brush. Clients have dozens of people to do every job – so any black mark on your record is just another reason for them to pick someone else.
Reinstating Your Contractors License (And Beyond)
So you lost your license – is it the end of the world?
The good news is no, losing your license is not the end of your career as a contractor. In fact, people letting their licenses expire is a rather common phenomenon, and most contractors licensing boards have simple paths to getting reinstated, especially if it’s an honest mistake and it’s your first offense.
That’s not to say the path is not without its obstacles. In many cases, you’re dealing with months of legal and bureaucratic nonsense that requires you to provide a bunch of paperwork and spend lots of time begging your state’s contractor governing body to forgive your transgressions.
It already takes 3-6 MONTHS to get a contractor’s license – and that’s with a clean record! Having to deal with the legal and bureaucratic load of reinstating your license can add weeks or months to the process. We don’t have to explain the financial cost involved here.
In any case, you’re looking at a severe hit to your business if your contractor’s license expires – it will simply cost you a ton of time, effort and money to get your contracting business back up and running.
That’s not to say it’s impossible; however, as there is always a way back to the top for any honest contractor willing to put in the hard hours to clear their name and rebuild their reputation as a certified contractor that can be trusted to do their job.
Our simple word of advice: do not let your contractor license expire. PERIOD! It’s not worth the cost!