ASK THE BUSINESS LICENSE GURU

By David Yount

Question:

“In the aftermath of Hurricane Sandy, what licensing requirements should contractors and consumers be aware of?”

Answer:

In the months following Hurricane Sandy many victims have reported dishonest and fraudulent conduct from the individuals that were supposed to help them – contractors. As they tried to repair and rebuild their homes, many were subject to scams and lost even more money. We have seen story after story of consumers entering an agreement with a contractor, paying for their services, and receiving either shoddy or unfinished work. When consumers tried to contact the contractor to finish the project, they would often not be able to get in touch with the contractor. We have provided some tips and information for contractors so they can avoid accusation of such scams and for consumers to avoid victimization of such scams. Contractors: Ensure your credibility and reputation by following these guidelines:

  • Obtain the proper contractor licenses before entering any contracts or starting work in a jurisdiction.
  • Make sure you have any local licenses that may be required including building permits and basic business licenses.
  • Have your general liability and workers compensation insurance certificates in order and accessible.
  • Provide potential customers with references to verify your past work

Consumers: To avoid scams, we urge all consumers to do their due diligence when hiring a contractor. Below are some guidelines for hiring contractors:

  • Verify that the contractor is licensed. See below for an overview of the specific licensing requirements for contractors in the areas affected by Hurricane Sandy.
  • Look up a contractor and their company online to see if they have a record of complaints or negative reviews.
  • Make sure that the contractor has general liability insurance. The contractor should be able to show you a copy of the certificate of insurance.
  • Establish a payment schedule with the contractor and do not pay the full price of the contract upfront.

The New York City Department of Consumer Affairs also warns consumers that they should beware of any contractor claiming to be associated with or licensed by FEMA. FEMA does not endorse, certify or approve any home improvement contractor.

All parties should be aware of state Home Improvement Contractor License Requirements. See an overview below:

Connecticut: Under the Connecticut Home Improvement Act, no person may undertake, offer to undertake, or agree to perform any home improvement in the State without first registering as a Home Improvement Contractor with the Department of Consumer Protection. Unregistered contractors may be subject to various penalties. To obtain a certificate of registration, a contractor must submit an application, supporting documentation, and a $220 fee.

Maryland: Under the Maryland Home Improvement Act, no person may offer or perform any home improvements in the State without first obtaining a Contractor License from the Department of Labor, Licensing and Regulation’s Home Improvement Commission. Unlicensed contractors may be subject to fines up to $5,000 or even imprisonment. To become properly licensed, a contractor must submit an application, supporting documentation, and a $370 fee.

Massachusetts: Under Massachusetts General Law, no person may solicit, bid on, or perform residential contracting in the State without first registering as a Home Improvement Contractor with the Office of Consumer Affairs and Business Regulation. Unregistered contractors may be subject to various penalties. To become properly registered, a contractor must submit an application, supporting documentation, and a fee ranging from $250 to $650 (dependent upon number of employees).

New Jersey: Under the New Jersey Contractors’ Registration Act, no person may engage in the business of making or selling home improvements in the State without first registering as a Home Improvement Contractor with the Attorney General’s Division of Consumer Affairs. Unregistered contractors may be subject to civil penalties up to $20,000 and/or even criminal charges. To become properly registered, a contractor must submit an application, supporting documentation, and a $90 fee.

New York: New York City and its surrounding counties each require its own Home Improvement Contractor License for any person providing home improvement services with its jurisdiction. As there is no statewide license, a contractor operating in multiple counties must obtain multiple licenses. Each County’s licensing process, generally handled by its Department of Consumer Protection, requires its own application, supporting documentation, and fees. To legally provide services in the counties of Suffolk, Nassau, and Westchester, you must apply for and obtain three separate licenses. Unlicensed contractors may be subject to various penalties.

Pennsylvania: Under the Pennsylvania Home Improvement Consumer Protection Act, no person may hold himself out as a home improvement contractor or perform any home improvement without first registering as a Home Improvement Contractor with the Attorney General’s Bureau of Consumer Protection. Unregistered contractors may be subject to various penalties. To become properly registered, a contractor must submit an application, supporting documentation, and a $50 fee.

Virginia: Under Virginia Law, no person shall engage in, or offer to engage in, contracting work in the Commonwealth without first becoming licensed with the Department of Professional and Occupational Regulation’s Board for Contractors. To become properly licensed, a contractor must submit an application, supporting documentation, and a fee ranging from $385 to $235 (dependent upon license classification). In addition, any locality in the Commonwealth has the authority to require any person engaging in the specific business of home improvement to obtain an additional license. Contractors that are not fully licensed may be subject to various penalties, both by the Commonwealth and the local government where services are being performed.

West Virginia: Under West Virginia Law, no person shall undertake or offer to undertake to provide home improvement services without first becoming licensed with the Division of Labor’s Contractor Licensing Board. Unlicensed contractors may be subject to various penalties. To become properly licensed, a contractor must submit an application, supporting documentation, and a $90 fee.

Please note that LicenseLogix handles all types of contractor licenses, in addition to home improvement contractor licenses. LicenseLogix can also verify any license. Check with us first before hiring your next contractor. For additional help you can fill in the form on the right or call us at 800.292.0909 any time.