CL Common Sense Contractor Licensing And Selection
Contractor licensing is an issue that seems to come up year after year. Most years even our local paper writes a strong editorial in support of this scheme. After all, we reason, if we license barbers, why not contractors who often control much more money?
The call for licensing has come about because of a handful of fraudulent contractors. Ultimately the problem is not always fraud, but an inability to figure the job correctly. The contractor bids the job, gets the job, then when he is in the middle of it he realizes that his bid did not cover some significant things. Usually he has written his contract so that these things can be covered. Sometimes he has not. At that point a serious conflict may result with the homeowner.
Homeowners who are concerned about doing a job without any serious hitch need first to spend more time in choosing a contractor. Most people get into trouble because they have very outdated or unrealistic ideas about what jobs actually cost. So, they are going to put an addition on their house. The bids come in at 35,000, 33,000, 36,000 and 15,500.
Now, which do they choose? Only a fool would go for the rip-off of the higher prices so they pick the one for $15,500. The other prices could represent a rip-off. Then on the other hand, the lower price may not reflect the actual cost of doing the job. It is best to get the contractor to explain why the low price. There is a risk here also as he may not be aware of the market and when faced with this question add a few more things here and there to cover himself. Or, it may be that he runs a very trim ship, his family helps him and he can deliver at that price. But, the homeowner needs to be sure the job can be done as stated. (We once did a repair on a house for 5,500 and made a couple thousand in profit. The homeowner told me that the next higher bid was 15,000. So there are rip-offs. Usually, however, that is just where the market is. Don't naturally assume that a higher price represents a rip-off. If you do not like the price find someone cheaper.)
The second thing that gets people into serious trouble is paying for the work before it is done. Few things require a payment before work is completed. That is usually things like cabinets. Sometimes a contractor will require a deposit simply because, believe it or not, contractors are defrauded more often than are homeowners.
But it is wise to be very careful about paying before the work is completed. Some have offered to pay me before being billed. Some have even written the check. But it is my practice to hold the check and only deposit it after the work is completed. This protects the customer in case something should happen.
Still, we license barbers, so it shouldn't hurt to license contractors. Well, why don't we ask the question as to why we license barbers? Is it not just to protect those barbers in business? I once had a barber tell me it was a tough business as anyone with a pair of scissors and a chair can be a barber.
Think of it this way. If a barber does a bad job how long does it take to rectify the job? Just a couple of days, until your hair grows out, and you will then know to not go back to that barber. So, there can be no justification at all for licensing barbers.
There are lots of very important professions that affect lots of people that are not licensed. Think about those who pass the laws in this state. They do not have to take any classes, pass any test, post any bond in order to be a legislator. Their only requirement is that they have to be approved by the people. We all accept that. Then, why can't we accept the fact that a contract to build something only need to be between the contractor and the homeowner; there is just no justification for the government to be involved. There is plenty of evidence to the effect that states with contractor licensing do no better than those without it. The effect of the licensing, however, makes building more expensive, and protects the larger builders. It also makes it very difficult for anyone who may be new to enter the building market.
There are at least sixteen states that do not license builders. I wrote to a friend who is in the legislature in Missouri and asked for some pro and con statements about building contracting. What I got back was mainly about electrical (it seems they do not even discuss general contractors). Some were in favor, but the ones who were against the measure were simply against it because they represented larger cities, they already had contractor licensing, and they would lose the money they get from the licensing program. So, it is more about money than it is about safety.
If you are concerned about having a satisfying experience with a builder then go to someone you can trust who has had building done and ask for some recommendations. Then carefully define the project so that he knows exactly what is and is not expected. (In my contract I specify every board and item that goes into the job.) Then recognize the fact that unforeseen things come up and allow yourself a ten percent margin, so that you can add things later that you did not think about. If your contractor is reputable he will work with you, and even take a loss if it is clearly his fault, but that does not build a satisfying relationship. Get to know your contractor, ask about his family, spend time becoming his friend and all your building projects will go smoother. If you need suggestions give me a call, or talk to the webmaster of this web site.
Jim Hollingsworth