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Unlicensed contractors face severe penalties!
Case Studies

Unlicensed Contracting in Disaster Areas Brings Heightened - Enforcement of Contractor Licenses

CONTRACTORS AND NATURAL DISASTERS

Unlicensed contractors are risking their livelihood. Civil and criminal penalties, including jail time, may be ordered against the unlicensed contractor. Without a valid license, the contractor has no course of action against a delinquent consumer who has not paid and may have to return any monies paid for the unlicensed work. Some states, such as California, have enacted especially severe penalties against unlicensed contractors who do repairing following a natural disaster or state of emergency, including fines up to $10,000 and imprisonment up to three years1.

STATES ENFORCING CONTRACTOR LICENSING

Some states have ramped up efforts to enforce contractor licenses and increa se public awareness following reports of unlicensed contractors targeting

regions in the aftermath of recent natural disasters2.

Places like Joplin, Missouri, a city that was devastated after being hit by a tornado in May, 2011, have become a target for unlicensed and inexperienced “contractors” seeking to exploit the damaged community and tap into insurance money3. Rebuilding can be a long, expensive process. Residents are often focused on finding the fastest and most cost effective solutions to damaged homes and infrastructure. Legitimate contractors should be aware that State officials warn consumers to be diligent in checking contractor credentials and for contractors to obtain proper licensing.

Many states are increasing public awareness of the risks of hiring unlicensed contractors and warning residents to do their due diligence. Public bulletins offer tips to citizens such as asking to see the contractor’s license before hiring them, checking references, getting a written contract, and getting multiple bids before choosing a contractor4.

Other states have tried to solve the problem by expediting the licensing process for out of state contractors. After a torrential flood in Minot, North Dakota, state officials sought to prevent unlicensed contractors from taking advantage of their citizens by setting up temporary field offices that would license out of state contractors on the spot5.


1 Public Announcement by the California Contractors State License Board, Contractors Board Warns Consumers. About Unlicensed Contractors After Disasters. Retrieved from www.cslb.ca.gov.
2 Leamy, Elisabeth, (2006, Nov. 3). Unlicensed Contractors Will Rip You Off, ABC News/ Money.
3 Public Announcement by the City of Joplin (2011, May 31.) Residents Should Be Aware of Contractor Licensure, Bonding, and Insurance Requirements. Retrieved from www.joplinmo.org.
4 Id.
5 Colclasure, Retha (2011, July 13). Minot Begins Licensing Out-of-State Contractors, KMOT-TV News Stories.

 
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