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  • Writer's pictureTeam Quartz Homes

The Risk of Using Unlicensed Contractors

Updated: Jun 3

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How It Can Damage Your Property Value

When it comes to home improvement projects, hiring a reliable contractor is crucial. While it might be tempting to save a few bucks by hiring an unlicensed contractor or handyman, doing so can lead to costly consequences, including loss of property value. This article will discuss the various risks associated with using unlicensed contractors and how they can result in damage to your property value, as well as the benefits of hiring a licensed contractor for your projects.

​The Dangers of Hiring Unlicensed Contractors

Pinching pennies on contract labor for your remodeling projects can actually cost you more than it’s worth, and carries real monetary and legal risks.

1. Lack of Professional Expertise and Training

Unlicensed contractors often lack the proper expertise and training to complete a construction project to the required standard. This can lead to subpar workmanship, which in turn can result in damage to your property value. A licensed contractor, on the other hand, has undergone rigorous training and testing to ensure they possess the necessary skills and knowledge to complete the job correctly.

2. Liability for Worker Injuries

When hiring a licensed contractor, you can be assured that they carry the necessary insurance policies, including worker's compensation insurance, which covers employee injuries on the job. However, when hiring an unlicensed contractor, you risk being held accountable for any accidents or injuries that occur during the construction project. This can not only lead to costly medical bills but also damage to your property value due to the stigma associated with such incidents.

​3. Difficulty Obtaining Building Permits

Licensed contractors are well-versed in obtaining the required building permits for construction projects. Unlicensed contractors, on the other hand, may not be able to legally obtain these permits, resulting in potential fines and legal trouble. This can further contribute to the loss of property value, as potential buyers may be deterred by unpermitted work.

4. No Warranty or Guarantee on Work

Unlicensed contractors often cannot provide warranties or guarantees on the work they complete. This means that if something goes wrong after the project is completed, you may have to foot the bill for repairs or even hire another contractor to fix the issue. This can lead to further damage to your property value, as potential buyers may be hesitant to purchase a home with a history of shoddy workmanship.

5. Risk of Fraud and Financial Loss

Hiring an unlicensed contractor can increase the risk of becoming a victim of fraud or financial loss. Unlicensed contractors may take advantage of homeowners by overcharging for materials or labor, failing to complete the project as agreed, or even disappearing with your money entirely. These incidents can lead to significant financial loss and damage to your property value, as potential buyers may be wary of purchasing a home with a history of contractor issues.

Handyman vs Licensed Contractor: Which One Should You Choose?

 While a handyman may seem like a more affordable option for serious home improvement projects, it's essential to weigh the potential risks and benefits before making a decision. In Georgia and North Carolina there are no state regulated licenses for a handyman and anyone can call themselves a “handyman.” There are a number of jobs that a responsible handyman can perform without major risks, however there are many that should only be done by a licensed contractor.  Here are some factors to consider when choosing between a handyman and a licensed contractor:

1. Scope of Work

If the project involves simple repairs or maintenance tasks, a skilled handyman may be sufficient. However, for more complex projects that require specialized skills or permits, a licensed contractor is the safer choice.

2. Insurance and Liability

A licensed contractor carries the necessary insurance policies to protect both themselves and the homeowner from potential accidents and injuries. A handyman may not have the same level of coverage, leaving the homeowner liable for any accidents that occur during the project.

3. Quality of Work

A licensed contractor has undergone rigorous training and testing to ensure they can complete the job to a high standard and within a predefined budget. While a handyman may have some experience in various areas of home improvement, they may not possess the same level of expertise as a licensed contractor.

4. Peace of Mind

Hiring a licensed contractor provides peace of mind that the work will be completed correctly and to code. In contrast, hiring a handyman may leave you questioning the quality of the work and whether it will stand the test of time.

How to Protect Your Property Value When Hiring a Contractor

To prevent damage to your property value due to unlicensed contractors, it's essential to take some precautionary steps when hiring a contractor for your home improvement projects:

1. Verify the Contractor's License and Insurance

Always ask to see proof of a contractor's license and insurance policies before hiring them. You can also verify their licensure through your state's licensing board website.

2. Obtain Multiple Quotes

Request quotes from multiple contractors to ensure you're getting a fair price for the work. This can also help you identify potential red flags, such as significantly lower bids from unlicensed contractors.

3. Check References and Reviews

Ask for references from previous clients and check online reviews to gain insight into a contractor's work quality and professionalism.

4. Get Everything in Writing

Ensure all aspects of the project, including the scope of work, timeline, and payment terms, are clearly outlined in a written contract. This can help protect you in the event of a dispute or if the contractor fails to complete the work as agreed.

5. Monitor the Project

Stay involved and monitor the progress of the project to ensure it's being completed according to the agreed-upon timeline and specifications.

​By taking these steps and hiring a licensed contractor for your home improvement projects, you can protect your property value and ensure your investment is worthwhile. Don't fall victim to the risks associated with unlicensed contractors – choose a reliable, licensed professional for a higher quality result and long-term peace of mind.

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