Fall Real Estate 2006

Publication Date: Friday, October 13, 2006

Choosing a contractor
How and why to check whether your contractor has a license

by Julie Park

In 1990, Palo Altan Janet Medlin thought a little remodeling would be a straightforward project. She trusted her husband's friend to purchase and install new kitchen cabinets because he said he was a licensed contractor. But it turned into a nightmare when the kitchen cabinets never arrived and the $3,000 she gave him to buy cabinetry never resurfaced. Medlin called the cabinetry company only to find out that the contractor -- who was actually unlicensed -- had never even ordered cabinets. When she called the contractor, he avoided her calls, and when she finally did speak to him, he said he would pay her back.

It was an empty promise. Sixteen years later, she is still trying to track down the contractor and find a way to remedy the situation, because, she said, "It just pains me that this guy could be in the community, doing this to other people."

Medlin's experience shows how people get ripped off even when they think they're hiring a licensed contractor. It turned out later that her contractor's wife was a licensed contractor while he was not, and the name on the license ambiguously used initials instead of spelling out the full name.

In California, a contractor is required by law to be licensed by the Contractors State License Board (CSLB). It is a misdemeanor to work as a contractor without a valid license. The CSLB Web site allows consumers to check the status of a specific license. But sometimes people unintentionally hire a contractor who has an outdated or suspended license.

What are the pitfalls of using an unlicensed contractor?

Most unlicensed contractors do not have bonding or workers' compensation insurance; in the event that the contractor is injured or causes property damage, the homeowner could be held responsible and face serious financial repercussions. The CSLB won't be able to offer you much help, as it cannot order an unlicensed contractor to repair faulty work or pay restitution.

Using a licensed contractor has its own problems. If the contracted work is not completed according to code or quality standards, you can complain to the state licensing board, but you must go through the civil courts to seek recourse at your own expense. Medlin, a lawyer, said, "civil courts are a huge pain."

Her friend hired a contractor who took a month to complete a job he said he would finish in one week. Then the contractor demanded more money, and when he didn't receive it, he physically threatened the homeowners. Medlin said that even if her friend had gotten a harassment order issued and filed a complaint to the CSLB, the complaint would not have appeared on the CSLB Web site.

The reason? Complaints about contractors are made public only if they involve a problem with workmanship or following code, or if the civil courts issue a judgment against a contractor. If the penalized contractor pays off the judgment, his or her record will once again appear to be clean on the Web site of the CSLB. In the end Medlin's friend paid off the contractor. But a consumer who wants to check a contractor's record could potentially look in public records for any prior suspicious activity.

Although consumers can file a civil law suit to seek reparations, it doesn't make sense for many people to go through the civil courts if a contractor does not fulfill his or her end of the bargain. Attorney fees may be more than the amount lost in the first place; and if the accused contractor does not have financial resources, then there won't be money to reclaim.

The CSLB Web site offers 10 recommendations for checking a contractor. The board recommends that you hire a contractor who holds a license in the specialty of the work he or she is contracted for. The full name on the contractor's license should be the same name of the contractor who shows up to work. The licensed contractor should have worker's compensation and be bonded. You can ask a contractor for references of previous work and inquire about the reference's relationship with the contractor.

Janet Medlin is still on the lookout for the contractor who ripped her off, and she thinks she may have tracked him down, finally, in Palo Alto. But Medlin is not optimistic about the contractor ever getting penalized, saying that such "white-collar crimes" aren't a high priority for the District Attorney's office. At this point, it's not about the money she lost. She said, "I just don't want this to happen to other people."

Editorial intern Julia Park can be e-mailed at jpark@paweekly.com.


10 Tips for making sure your contractor measures up:

1. Hire only licensed contractors.

2. Check contractor's license number at www.cslb.ca.gov or call 1 (800) 321-CSLB

3. Get three references, review past work.

4. Get at least three bids.

5. Get a written contract and don't sign anything until you completely understand the terms.

6. Pay 10 percent down, or $1,000, whichever is less.

7. Don't let payments get ahead of work. Keep records of payments.

8. Don't make final payment until you're satisfied with the job.

9. Don't pay cash.

10. Keep a job file of all papers relating to your project.

(Source: California Contractor's State License Board)