Talented contractor, but not licensed/insured
 

I think I know ya'lls response, but will toss it out there anyway.

Getting ready to do a small bathroom remodel. Holy cow it's expensive, but I work from home and don't have the luxury of time to do it myself, which I normally would. This a 5x8 bath, basically a rip and replace. Re-bath wants 17-20K WTF? For middle of the road materials, including 2 new doors, I'm in for ~3K. Other estimates for labor have been between 8-13K. Staggering.

I've been referred a super nice, trustworthy and hardworking guy who does really good work, and have seen a couple examples of his work. He just got his green card, is not licensed or insured, but has been doing this for a while.

For labor, he comes in at 1/2 to 1/3 the cost of others, but am I looking at too much risk in the event of an injury or code issue?

Next call is to AAA, which carries my condo insurance, to see what they have to say.

Thoughts?

Thanks!
-Brad

no

That's terse..LOL

NO as in "don't do it" or NO, not too risky?

No, don't do it.
No, it is too risky.

run forest run

So he's a good guy, and due to no fault of his own or yours, he falls while working on your property and and gets hurt badly.
He can't work for a while, he can't support his Familia.
He is scared.
Then a non-scrupulous lawyer-type catches up to the ambulance and says "hey, I know how to solve all your problems".
Next thing ya know he get awarded a couple mil, well above what you are insured for, so you looose everything including your condo. But ya still gotta pay back the loan!

He must have his own insurance or he does not pick up a tool on your property.

Here in Fl. a home owner can act as the supervisor/contractor and hire labor. Pull appropriate permits, make sure the guy does it to code, and you are good. This works well with you working from home....

For a normal construction site, I use nobody who isn't either an employee, or a licensed & bonded subcontractor.
For a small remodel in the home, I may use an unlicensed guy if it was a friend I'd known for a long time.

For someone you've never met? Just a referral? I wouldn't take that chance.

Same as South Carolina....biggest think are codes...make sure you know what the cuty expects...

If you’ve seen his work and no he’s trustworthy as well as know the person that referred him I would not have a problem with him.

No - if he is running the job.

Yes - if you can have him help you on YOUR job.

Can you clarify?

Any thoughts on a 'hold harmless' contract?

self insure as the biz guy with lic and ins costs way tooo much

I just did my roof
roofers wanted way too much
and would NOT do the job the way I wanted WITH multi layers of ply screwed and glued
doubled and lapped steel ect
as I hate betting I am going to lose [ins] I did the job with known uninsured help
and built a cat 5 proof roof for less then the bids that did not want to go stronger then ''CODE''

as always ymlmv

Being a now retired contractor for nearly 40 years with some odd 50 years in the trades (the difference being licensed vs. unlicensed) I can tell you that not once in all that time have I been asked about a license. Did I offer the information? Yes, but never on the phone making the appointment to see the proposed work. Was my lic info in my advertising? Yes. Do people read the advertising? Not much. They see the hook or the deal and make their decision to call based on that. (I used to advertise discounts.)

Note: over 50% of my work was by referral up to the Great Recession when I pulled all advertising as it no longer pulled in any leads. From then on it was 100% referral until a month before my shoulder surgery in January when I stopped taking calls.]

The point is, a lot of contractors are plain lousy. There was a segment on the local news last night about these 'home improvement' booklets that come in the mail. The complaints against the mass advertisers that are so called contractors ran well against hiring anyone in that category.

If you find someone who is recommended and do a modicum of due diligence, you could very well be safe in working with an unlicensed. The main thing to always thing about is the fact that many in the trades who are good at what they do did not take accounting in college. They aren't always very good business persons.

Don't pay up front. Period. A 10% or $1000 deposit (whichever is less) is the CA Contractors State License Board law. That means if you sign up for a $100,000 job, you put down a grand and no more. The draw for payment must remain at 95% of completed work at any given time (more law).

Guys that come in and ask for material money up front meed to be scrutinized. Sure, the small fry doesn't want to use his rent money for your materials and that's understandable. Go to the supply house, lumber yard, home box store, whatever, with your "contractor" and buy the stuff yourself if necessary.

Me, I used my money from beginning to end on every job. Never, ever took a deposit more than allowed and most of the time I was out of pocket thousands before I saw a check. That right there builds a hell of a lot of confidence.

Doesn't exist in the world of contracting.

https://www.inman.com/2015/03/11/unlicensed-contractors-are-a-hidden-risk-for-california-homeowners/

That's what we did on our addition we are doing. I hired a carpenter not a contractor.

Sam, that article is wrong in only one minor fact, otherwise a very good article. That is unless the law has changed since I took the test to become a general contractor. The article states, " A contractor with one license cannot use that license for an activity that requires a different license."

Not true. A contractor with a C or D specialty license cannot advertise or pursue any activity directly outside of the license issued. However, if additional work outside of the particular license becomes "incidental and/or supplemental" to complete the job, the licensee may do so.

For instance, a plumber has a re-pipe job and has to open up walls, some interior and some exterior. He may do the patching and painting if he wants. Otherwise, 3 additional contractors would be required.

But, a swimming pool contractor can't build a required fence because that is considered not part of swimming pool construction. Swimming pool contractors normally use specialty contractors making them a sort of limited general contractor, e.g., licensed electricians and concrete contractors to name a couple.

It's damn confusing and I'm afraid a few specialty ("C") contractors tread on thin ice.

Now let's look at the bathroom the OP is considering. If a general takes the job, he can do almost the whole thing in-house. Or he could hire all the subs required from framing to flooring. That would make that job either very high in cost or not profitable. Something has to give somewhere.

Since a plumber could ostensibly do the drywall, he couldn't do the tile. So, he cheats and does more that the strict law would allow. This is why unlicensed multi talented persons are in demand. Or licensed folks who will work outside the box. It's not always because so called 'handymen' are to be considered jack leg incompetents.

Jobs like this fall into a blackhole in the world of contracting.

There is also the statement, "But an employee may not be covered for workers’ compensation because they have not worked a certain minimum number of hours..."

I question that. AFAIK, there is no minimum amount of hours worked, covered or not, that are required for WC benefits. Not my area of expertise.

There is so much to the CA contractor's license that most only are aware of the tip of the iceberg and that includes licensee's. I mean there is a statute that says licensed contractors may not "associate" with unlicensed workers not in employ. WTF? I can't go to lunch and talk shop with unlicensed Joe the Handyman? Or does it mean I can't do any kind of transaction with Joe involving work requiring a license? (Likely the intent of the law.)

I can tell you I have had "Joe" come out and haul away siht a lot. The law says "Joe" needs a D-63.

Yeah, right. I'll get right on that.

Thank you all for your feedback. Honesty, I am less concerned about license, but much more so insurance and liability, but seems they go hand in hand

Insurance is overrated if you ask me. If a claim is filed the response will likely make your head swim. And stop your job for months. What are your concerns? If your worker, or whatever you want to classify him starts a fire, what insurance will cover that? His, yours? If you are really concerned, pay the 20K that you were quoted. That was the price because that's the reality of the situation. As I said, this is not a profitable job for a contractor with ALL his ducks in a row. He has too much overhead to be bothered.

This is where the problem lies: each sub has his own liability and WC to pay for. For a small time contractor in CA, this is probably about $1000 to 1500 a month. You have, well let's see, demo, rough plumbing, some electrical, carpentry (new doors, vanity, ect.), drywall and/or plastering, tile or tub surround, floor, painting, maybe a mirror involving a glass company. Pick and choose amongst that list and add or subtract.

You don't have everything right down to the fan upgrade on site so each contractor might have to shop and supply. Times all that by a rate that will cover expenses and overhead and you'e looking at anywhere from 80 bucks an hour to double that for an employee in a company truck. Add in the cost of materials and the picture starts to develop.

AFA materials are concerned, I don't like anything that the HD sells unless it's a box of nails and even they aren't all that good, and your typical lumber yard has the same crappy nails these days. Let's take plumbing fixtures for instance, Kohler sells a fine line of fixtures, but their spec stuff for the big box store is not the same as you will find at the plumbing supply. Plus, I can buy at a better price at the PS for a better product for less. But it takes time. So I sell it to you at retail, which is more than the BB price. Then you think I'm boning you.

And on and on. Truth be known, I'm sick of the remodeling business that I've loved for nearly all my adult life. As Chuck Berry said, "Too much monkey business."

I ran a $300,000 renovation job at the end of 2017 and into '18. It's documented here on Pelican. I had trouble with half of all the subs that showed up. Part of that was because the owner stepped in with someone he found at a 'better' price now and then and he ended up paying for that, I can assure you. My people were much better and more reliable. They weren't always the best deal on the table.

Pay the money to the best fully insured and equipped general contractor and walk away if you have any doubts. If he doesn't perform, hold back payment and make him do it right. He will if he's credible (if he needs to in the first place).

Or save money and put your skin in the game.

Thanks Milt, I am concerned about medical insurance work the workers and getting sued should someone get injured, fall down the stairs, etc. Or does that not fall under the typical umbrella of "licensed and insured"? There are a lot of slimeballs in the business and it's nearly impossible to find someone good. And Angies list, etc.....give me a break. You should be glad you are out :--)

Back in the olden days when I built my garage myself I was at the stage to roof it and was not excited about doing it myself because I get dizzy standing on a silver dollar.

I come home from work and lo and behold somebody stapled their roofer’s business card to the building. Called the number and a couple days later two young guys shingled that roof in about 1/2 a day with no money up front, nothing in writing and they did a fine job.

Fast forward to this week and the roof is wore out. I had trouble finding roofers to even give me an estimate. One outfit charged $150 just for the privilege of having a looksee.

Anyway, the first thing out of every one of their mouths was that they were bonded and insured and some even emailed copies of their policies.

Nowadays, I let nobody step on my property who isn’t insured.

Licensed and Insured can mean lic + liability. As a sole owner and a one man company I didn't carry WC ins. That's because in CA the owner can't insure himself for WC unless incorporated and on salary. Which is not a bad way to go, but as I said, it costs lots of money in CA to carry WC. Many trades are above 15% for WC meaning for a $200/day worker I send in 30 (or more) bucks every day. It adds up fast.

As a lic contractor you could have hired me without that overhead but the question remains, what if I got hurt. Supposedly it was always on me. But if something about your house caused the injury then what. Actually IDK because it never came up and clients didn't ask ahead of time just like they didn't ask about the lic or the liability, if you want to know the truth.

I'll say it one more time in case someone didn't read all of this, a contractor with all the proper licensing, liability including vehicles, and WC PLUS local business licenses, has to come in the door with a minimum to make any money. With all that going on, I wouldn't touch a job for less than 10 grand that I thought I could do in 2-3 weeks by myself depending on the cost of materials.

On the flip side, a landlord friend of mine just finished a complete reno on a 2 bedroom apt with easy access (a big factor) including new appliances, counters, new kit and bath floors, new windows, complete bath and the whole place painted for 15K. He had to buy the appliances and the carpet over the 15K and that's it. One middle aged dude did the entire job except laying the carpet. I can assure you the guy had nothing AFA overhead. His truck didn't even have reverse gear. But it turned out good enough.

Physically I couldn't have done that — but maybe 10 years ago. Besides the point.

I wrote before I thought.

Considering I insure contractors all day long, this may be important.

1) Your guy needs workers comp. You are correct.
2) Your guy only needs liability insurance if you need the ability to collect on it. Your call...

I am with Milt on the licensing. Friends help friends all the time. It is within the scope of home ownership.

When on the job injuries happen or others are injured or a long term leak? You need to be the judge. You don't need insurance until you do. Then it can be too late.

(Milt, I see claims paid almost every day. Currently working on a fatality. Not pretty)

Don’t do it.
Especially if you already *know* he isn’t licensed AND insured.
Really really do not do it.

Brad, you should be Ok with this guy if you like him but there are risks like many mentioned about. Remember this, most lic contractors were once unlicensed until they can stand on their own feet. I was one of them during my early college years. Within a couple of years, I decided to get my lic and all the other stuff that come with the responsibility of running a business.

Check with your insurance agent. Maybe there’s a work around with you getting WC, etc. I don’t recall it being that much when I built my house.

In SC, if you hire a contractor and then find out he’s not licensed, you don’t have to pay him.

Supposedly that's the case in CA too. IDK if I'd want to test it.

It's just a bathroom. I'd be more worried about references and experience.
Roof. No way.
I just went through both.

Yep - run away: fast.