Why you should make sure your contractor is licensed
After hiring a contractor her neighbor recommended to do some electrical and remodeling work in her Indianapolis home, Patricia Toland discovered the contractor was not properly licensed by the city.
As Toland quickly learned, homeowners in Indianapolis who allow work to take place without verifying a contractor’s licensure status are ultimately responsible for the work done and must correct the violations. The contractor did not pull permits for any of Toland’s remodeling work so she had to pay $700 to secure the proper permits mid-project and hire another contractor to finish the work. Only the homeowner or a contractor who is licensed, bonded and insured can pull permits. Consider it a red flag if your contractor asks you to pull permits on his or her behalf.
“The financial impact was enormous to me, (as was) the emotional impact,” said Toland, who has since moved to Boston after successfully suing the contractor in small claims court.
Toland’s case highlights the importance of determining if your contractor is licensed before you hire. Plumbing is the only trade licensed at the state level in Indiana; all other trades are licensed at the local level. In consolidated Indianapolis, general contractors, electricians, heating, ventilation and cooling technicians and wrecking services must be licensed through the Indianapolis Department of Code Enforcement (DCE) or risk being fined.
To earn a license in Indianapolis, tradespeople must meet certain minimum industry requirements to prove they are capable to do adequate work, including passing tests and appearing before a board of appointed peers. The DCE uses its record of who has earned a license a regulatory tool to police the behaviors of contractors.
The City can fine contractors for working without a valid license and can seek a permanent injunction against them in court if they incur multiple offenses within a 12-month period. Angie’s List partnered with the DCE, local police and other authorities in September on a sting operation that netted five contractors operating without a license, each of whom were fined.
“If we suspect their behavior is outside of what is acceptable — that could be workmanship, dealings with customers, defrauding, violating codes, putting people’s lives at risk — they can be brought before the board and their listing taken from them,” said DCE director Rick Powers.
Every municipality that licenses trades people requires a licensing fee, but the requirement to earn the license, or listing, varies widely. Contractors in Fishers, for example, only have to provide proof of liability insurance and pay $100 annually to be registered in the town.
Ensuring a contractor is licensed can be tasking to a homeowner, especially one who is trying to save money by cutting corners, but not doing so can cost a homeowner so much more. If you are considering home improvement that involves remodeling, electricity, plumbing or natural gas, first determine which local agency regulates trade licensing, what is required for your project and who is credentialed to do it.
As Toland found out, allowing work to be done without the proper permits can have serious financial implications. It can also cause your homeowners insurance policy to be voided, should a claim arise as a result of that work. But those could be the least of your concerns.
“Electricity kills. Gas explodes. You could die or be injured,” Powers said. “I never apologize for saving lives. It’s about is protecting the consumer.”
Editor’s note: This article was originally published in October 29, 2011.