This article was posted 03/19/2013 and is most likely outdated.

Mike Holt - Pitfalls of Hiring an Unlicensed Contractor
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Pitfalls of Hiring an UnlicensedContractor

image1The Pitfalls of Hiring an Unlicensed Contractor

“Hi Mike,
I am a small contractor - myself and 1 or 2 other men.  I live in a farming community.  In many cases my customers are from word of mouth in our area. How can I educate my potential customers of the benefits of using a licensed contractor who will follow the Code; and let them understand the pitfalls and dangers of using unlicensed tradesmen? Thanks,
Dennis”

Dennis’s problem is quite common. In today’s environment, where work is scarce, there are many licensed contractors fighting to get jobs because unlicensed guys underbid all the time.

Elisabeth Leamy wrote an article for ABC News in 2006 that is just as relevant today. It is entitled “Unlicensed Contractors Will Rip You Off  and highlights pitfalls of hiring unlicensed tradesmen.  It is directed at the consumer, but this article will give you the talking points you need to educate your customers, write a flyer, or adapt for your marketing.

Unlicensed Contractors Will Rip You Off
By ELISABETH LEAMY (@elisabethleamy)
Nov. 3, 2006
Did you know you could be arrested for using an unlicensed contractor? It's true. In states that require licensing, hiring an unlicensed contractor is illegal. And if that's not bad enough, did you know an unlicensed contractor who gets hurt on your property could sue you -- and win? Unlicensed contractors are unlikely to carry proper insurance, so it has happened.

Click here to continue reading the article posted on ABC News.

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Comments
  • As a licensed electrical contractor for 28 years and an electrical instructor for 30 years, There is nothing but sheer joy for being a licensed electrical contractor. I can wire anything legally, I take pride in my experience, knowledge and understanding of the national electric code.

    A lot of my work consist of going in after commercial electricians have attempted to wire up a building. I cannot express the importance of knowing the local ordinances of each city you work in.

    As far as on licensed electrical work in this area, we have a lot of it. If I want to buy a hot water heater for my home or a central air conditioner/furnace, I am not allowed to purchase this equipment nor am I qualified to put it in as a homeowner. Anyone can go buy a three phase 400 amp panel box. This is where I see the problem; the electrical supplies are not regulated as well as HVAC. So now we have people wiring buildings that should not be.

    Do the paperwork, do your homework, file for the permits, get the inspections and be done. Has anyone ever seen a electric range wired with 12 gauge copper Romex? I have seen it in rental property.

    I had a customer with a brand-new $ 150,000 machine. It was used to make plastic yard signs. This gentleman wanted me to tap into the main line side disconnect and installed some lights and limit switches. He did not want me to run a separate 120 volt circuit from 50 feet away, he just wanted me to tap into the "B" phase of the primary supply. This is a perfect example of when I just walked away, I gave the job to another electrician. I did not want to do it his way, let alone drill holes on a brand-new machine and void the warranty. So having an electrical license also allows you to be selective in your work.

    Michael D. Hockenberry  April 2 2013, 11:38 am EDT
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  • I am not licensed, yet. I have failed the State test 2 times in a row. I have been doing electrical work for 20 years this year. I have done "side work" I consider myself a professional, quality craftsman who enjoys his trade. I had a license in OH 12 years ago. Let it lapse where I am now as I am with a big firm. I still do "side work". High quality, that will pass inspection. I see every day licensed work being passed that is shoddy, against Code and down right slack. Because the licensing is so convoluted to keep the professional like myself at bay, I am at a disadvantage. A license does not guarantee quality, safe work.

    D Fansler  March 20 2013, 6:18 pm EDT
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  • I am not licensed, yet. I have failed the State test 2 times in a row. I have been doing electrical work for 20 years this year. I have done "side work" I consider myself a professional, quality craftsman who enjoys his trade. I had a license in OH 12 years ago. Let it lapse where I am now as I am with a big firm. I still do "side work". High quality, that will pass inspection. I see every day licensed work being passed that is shoddy, against Code and down right slack. Because the licensing is so convoluted to keep the professional like myself at bay, I am at a disadvantage. A license does not guarantee quality, safe work.

    D Fansler  March 20 2013, 6:18 pm EDT
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  • I think it should also be noted that a license contractor still can do a losey job. It all depends on the person their skill level. Are they current with the NEC or local codes you would think so if they pull a permit.I myself knew a guy who had a electricial license but did not do much electricial work. My point is check out who you are hiring. Someone commented on here about inspections. I have seen inspectors who should loose their jobs.

    Rich  March 20 2013, 11:35 am EDT
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  • Very good advice. But can even happen using licensed contractors: I send an RFP to a PV contractor in MD to install a grid-tied system for us. Proposal and contract came back: used misleading ROI data, failed to address voltage drop issues I had (150' PV to main panel), would not tell us what kind of equipment they would install until after contract signed, would ot link payments to inspections, wanted full payment at installation completion before final inspection and grid-tie, would not tell us expected power at the grid connection point, did not agree to use 2011 NEC, did not provide license info nor insurance or workman's comp data. Result - contract was rejected.

    ib  March 20 2013, 1:18 am EDT
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  • I just hope they stop selling, How to do electrical books in these home improvement stores and start promoting hiring a licensed contractor is the right thing to do! It all starts at the electrical supply house and home improvement stores to help the licensed contractor that bring real revenue to their stores.

    Darrell Coleman  March 19 2013, 11:48 pm EDT
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  • I think the article fails to mention Inspections by the AHJ (the local building dept). Pay a small deposit to get a permit, than pay a second payment for material. Next payment when rough in work gets inspected and passed inspection. Next payment when work is completted. Final payment when work has passed FINAL inspection and you get a certificate from the town/ City etc. This way the homeowner protects himself at all times. If the contractor is ligit he should have no problem with this arrangment.

    Steve  March 19 2013, 10:42 pm EDT
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