WHAT ARE THE LEGAL RISKS TO A HOMEOWNER WHEN HIRING AN UNLICENSED CONTRACTOR TO WORK AT THEIR HOME? 

Hiring an unlicensed contractor in California can pose several legal risks for a homeowner. Risks to homeowners may vary from simple limited bargaining powers to serious liability for injuries sustained by the contractor and or contractor’s employees.

Liability for injuries or damages: If an unlicensed contractor or their workers get injured while working on the homeowner’s property, the homeowner may be held liable for any medical expenses or damages. Licensed contractors typically carry insurance to cover such incidents, but unlicensed contractors may not have the same coverage. When there is no insurance carried by the contractor, the homeowners’ insurance may cover those injuries which will result in an increased insurance rates for the homeowner or if there is no coverage, the homeowner may be personally responsible for those expenses.

Licensed contractors in California are required to carry worker’s compensation insurance to cover any injuries or accidents that occur on the job. This insurance provides benefits to injured workers, including medical expenses and lost wages. However, unlicensed contractors may not have worker’s compensation insurance, which means that if a worker gets injured on the homeowner’s property, the homeowner or homeowner’s insurance may be held liable for medical expenses and other costs.

Increased risk of substandard work and accidents: Unlicensed contractors may not have the same level of training, experience, and adherence to safety standards as licensed contractors. This increases the risk of accidents and injuries on the job. If a worker gets injured due to the contractor’s negligence or substandard work, the homeowner may be held liable for their injuries and associated costs.

Legal penalties and fines: In California, hiring an unlicensed contractor is against the law. Homeowners who knowingly hire unlicensed contractors can face legal penalties and fines imposed by the Contractors State License Board (CSLB). These penalties can range from monetary fines to criminal charges, depending on the severity of the violation.

Lack of legal protection: Licensed contractors are required to meet certain standards and regulations set by the state. Hiring an unlicensed contractor means that the homeowner may not have the same legal protections and recourse available in case of disputes or substandard work.

Violation of building codes and regulations: Unlicensed contractors may not be familiar with or adhere to the local building codes and regulations. This can result in substandard work that may not meet safety standards or pass inspections. The homeowner may be responsible for correcting any code violations, which can be costly and time-consuming.

Limited legal recourse: If a homeowner is dissatisfied with the work performed by an unlicensed contractor, they may have limited legal recourse. Unlicensed contractors may not be subject to the same regulatory oversight and disciplinary actions as licensed contractors, making it more difficult to seek compensation or resolution for any issues.

Difficulty in enforcing contracts: Contracts with unlicensed contractors may not hold up in court or be enforceable. This can make it challenging for homeowners to seek damages or enforce the terms of the agreement if disputes arise.

To mitigate these legal risks, homeowners in California should always hire licensed contractors who carry liability insurance and worker’s compensation insurance. This ensures that any injuries or accidents that occur on the job are covered by the contractor’s insurance, protecting the homeowner from potential liability and financial burdens.

Eduard Braun, ESQ
Law Office of Eduard Braun, P.C.
877-533-4529
www.ebraunlaw.com