Many homeowners are simply unaware of what constitutes “contracting” as it is defined by the Arizona Registrar of Contractors who is the state licensing agency. Anything over $1000 requires that the person with whom a homeowner engages to do work is a duly licensed contractor. Having a license is not an optional way of doing business yet it may seem that way when local classified ads end with the phrase “not a licensed contractor” as if they elected not to get a license. Homeowners also group anyone who does remodeling, building or construction as contractors whether they are licensed or not. However, the Arizona Registrar of Contractors does not refer to such people as contractors as that implies they are licensed. They are referred to as “unlicensed entities”. Referring to them as contractors gives them a form of legitimacy. Just as the classified ad phrase “not a licensed contractor” claims they are a contractor, just not a licensed one. Thus you may have seen the bumper sticker issued by the Arizona Registrar of Contractors to all contractors who just obtained a new license “Licensed Contractors Build Trust”.

Despite the warnings from state agencies, consumer protection boards, Angie’s List or the Better Business Bureau homeowners continue to take risks and hire unlicensed contractors for any number of reasons.

8 Reasons Why Homeowners Do Not Hire Licensed Contractors

• Your neighbor hired them and they were pleased and recommended them;
• They shop for the best price and take a risk as to quality of construction;
• They are willing to overlook the lack of license, insurance and perhaps knowledge and skill to “save money”;
• Everybody wants a “good deal” don’t they? Why pay more if you find a bargain? That bargain may fall apart after 6 months with no way to track down your “lowest price guaranteed” contractor;
• You just need a retaining wall rebuilt to correct some erosion problems and a guy in the local classified ads says they do that kind of thing. You are enticed simply because that person says they can do what you need – to solve your landscape problem. You don’t care about insurance or anything, you just need this done right away;
• They haven’t yet been burned from hiring unlicensed workers.
• They were conned by door to door fly by night guys who took advantage of needed storm damage related work;
• They are elderly and are not as sharp as they used to be especially in areas of judgement and trust.

I am in the middle of rebuilding a waterfeature that the homeowner had built by an unlicensed contractor. In fact, he tried hiring a replacement contractor after the first guy stopped answering his phone to fix a leak. Now the second guy did such an awful job and also did not respond to multiple calls to return and fix it. He found me on a list put out by the local homeowners association which several neighbors had mentioned I was a reputable landscape professional. Yet he did not say he hired me because I was licensed but since I am, I am not going to bring it up.

9 Red Flag Warning Signs That you May be Hiring an Unlicensed Contractor:

• You call someone from your local paper and he doesn’t even have his voice mailbox set up;
• He doesn’t have a website or email;
• He doesn’t have an address on his business card or better yet, he spells shrubs as “scrubs”;
• He gives you an estimate on a hand written note pad right then and there;
• He uses a can of spray paint to “design” your backyard instead of putting it to paper or God forbid a computer;
• His cell phone number goes to someone other than himself because the minutes on his phone expired;
• He doesn’t show up when expected or only shows up to ask for money;
• He answers his phone by saying “hello” rather than using a business name or his own name;
• He says he wants to get paid in cash because you will get a better deal that way when the real reason is he has no bank account

Individuals that know they should be licensed but who choose not to be are not only doing business illegally, but who are probably avoiding paying sales tax, getting a city business license, insurance and all the other “paperwork” required to be legal and legitimate. Why support such an individual? You are certainly not contributing to the “keep it local” movement and may in fact be contributing to the flow of money across the border.

That being said, there are many good, skilled workers who are sincere about doing a quality job for their clients who for whatever reason are not licensed, cannot get licensed, but are otherwise good people. The problem is not picking one of these and ending up with a bad apple. Why take the risk? Licensed contractors build trust.

Most homeowners who live in Sedona have been around and may have previously had landscape work done working with a contractor and or designer. They may be somewhat familiar with the costs. But if you are just starting out with considering a new landscaping project, perhaps remodeling a home you just bought and moved into, here are some guidelines to consider when interviewing prospective contractors and or designers. Hereinafter, I will just use the term ‘contractor’ for ease of writing.

1. Tell the contractor what your needs and wants are and walk around the property. Part of the interviewing process is not just to give them an idea of what you want so they can come up with a price. People buy from those whom they know, like and trust. So you have to go through a bit of a process to determine those factors. For some, it may only take one meeting. For others it may be over several meetings. At the end of the first meeting, if it is not clear, ask the contractor “How do you work?”

2. What you say and how you say it to the contractor may reveal your intentions and may or may not be in alignment with how they work. So it is better to show the contractor around and let them ask questions without being in control of the whole experience. Homeowners who march you through the project and describe it without hesitation as if they have done it several times before, tells me they have no intention of knowing anything about me and they are just going through the process to get another bid, perhaps the third of fourth. Believe me, I can tell when this is happening and these prospects are not my client.

3. A contractor who gets marched around the property and is then expected to get out his tape measure and give you a bid may stop you and state how he works and that he charges a fee to come up with a design. Most landscaping is sufficiently complex that spray painting it out on the ground and preparing an estimate on the spot is highly suspicious and should be a sign of someone who is not professional and probably not licensed.

4. If you have already talked with several contractors, know exactly what you want and have been given perhaps “free estimates” from others, you now have an indication of what your budget is. Did you pass on the contractor(s) who wanted a design fee to prepare the proposal? That was a mistake because any contractor who prepares a design and proposal is not going to spend the time nor be very thorough with the costing out process nor spend very much time on creativity.

A homeowner who is going through the process of “interviewing” several contractors and getting “free estimates” and or “bids” should not be limiting their evaluation based on the lowest bid. There are many other factors the homeowner is assessing while going through this process such as experience, credentials and references. But the question is, should the homeowner pay a fee to go through this process if the “bid” requires significant time and creativity to develop a thoughtful design upon which the costs can be accurately determined compared to an “off the cuff” ballpark estimate?

What I have learned over the years as a designer and as a contractor, what the client really wants is to experience the finished project. If the project is complex enough and requires a design to be prepared, then requiring a design fee is justified. Other simpler projects may be more straightforward and can be sketched conceptually on paper to show a visual of the design without a lot of time being spent. Again, this goes to the question of asking the contractor how do they work?

It will be up to the individual contractor to determine if they should charge a design fee to prepare a proposal. They could end up working for free, providing valuable design ideas and solutions and never get the job.

The most reasonable way to handle this is for the company to require some kind of design fee that may be credited towards the construction contract. That way, the design/free estimate is prepared with sufficient detail where assumptions are not made, materials are specified and the input of the homeowner is reflected in the design to make it truly custom.

As a design-build contractor, I emphasize the design aspects of a project which allows the homeowner to compare my creativity and value with others who may be more focused on the construction. A design fee on a project where it is justified truly shows my creative skills and allows the homeowner to get to know me as a person, not just another “bid”.

During your first meeting with a designer or contractor, they may ask you what is your budget. How to establish a budget before you are educated as to how much things costs may be difficult at first, but in my last post, How to Handle Your First Meeting with a Landscape Professional, I discussed the industry standard of offering the “free estimate” which can take the form of an actual quote, bid, proposal or simply an initial meeting where costs are discussed in ballpark figures. Most professionals who have experience with homeowners during the first meeting will want to discuss budget.

The problem is that most homeowners usually have no idea what the costs are for their desired project. One of the goals of the initial meeting is to listen to the homeowner’s wants and needs and then see if they are being realistic with a stated budget or if they are way over their head thinking they can get a Mercedes for the cost of a Kia. So the question of the budget is important so the contractor or designer can provide meaningful feedback based on your stated goals. Here are a few typical responses that most homeowners state in response to the question of budget:

1. They will state they have no idea  what things cost (they may believe that is the purpose of a free estimate – to educate them about what things cost so that they can then arrive at a budget)

2. They do have a budget in mind but do not reveal it assuming the company will spend the whole budget even though the project can be built for less.

3. They say they have no budget and will spend whatever it costs (the ideal client).

4. They will not give you a budget saying they don’t want to limit your creativity in coming up with a design.

5. They will not state a budget, but instead ask the designer/contractor to give them a ballpark cost on the spot and usually state that they will not hold you to it.

The last response is the most difficult for the company since both parties are trying to arrive at some mutual agreement about what the budget should be. If the contractor throws out a figure that turns out to be lower than a follow up written proposal, the homeowner can use that as leverage for expecting a lower number. If the contractor throws out a much higher number, they may be labeled as expensive provided the homeowner has previously talked with other companies and received lower ballpark estimates.

If the designer or contractor does not get a very clear direction as to a budget from the homeowner, the contractor may feel they are being used for the purpose of establishing a budget. This is evident when the homeowner states they are getting several “bids”. This is a red flag for a contractor who senses that the homeowner may just be interested in the lowest price for what was desired. But if the stated wants and needs are not detailed in some kind of plan, how can the “bid” be accurate? A contractor who draws up a plan for free during the “bid” process is simply preparing a design based on what they think the homeowner wants and what they are willing to spend.

Again, why should the contractor draw up a plan with costs without a clear budget? A wise contractor may consider an unwillingness to provide a budget as a way of qualifying the prospect. A wise contractor who does not get a straight answer on the budget question will have ways to ask the question indirectly. Do not let a designer or contractor go back to their office without some kind of budget. At least agree to a range so you are not wasting each others time.

The type of landscape professional you need depends on the kind of project you have.  Many will offer a “free estimate”. How you handle this first meeting will allow you to leverage what they have to offer and whether you are comparing apples to apples between competing professionals.

Below are the various services that the landscape industry possesses to serve the various needs of any particular client or job:

• Yard maintenance – mow lawns, trim trees, control weeds, etc.
• Specialty contractor – install a specific project such as a fireplace a patio or a sprinkler system. These tradesmen have specific skill sets such as masonry, concrete, plumbing, tile, etc.
• Full service landscape contractor – handles multiple skills and trades including irrigation, fireplaces, bbqs, patios, plantings, fences, walls and most of the typical elements one would need to construct in a new landscape installation.
• Landscape Designer – May be educated or not. There is no licensing requirement to label one’s self a Landscape Designer. Designers typically do not get involved in the contracting part of a project, but some do if they have construction knowledge.
• Landscape Architect – Is a professional certification granted by the state through licensing. Must have a degree in Landscape Architecture. Typically focuses on commercial projects and higher end residential to justify their higher design fees.
• Design-Build Contractor – A contractor who is a landscape contractor and has design expertise. This type of contractor is capable of providing a client with a design that includes all the multiple elements of a landscape and who can then build it.  This contrasts with a contractor who requires others to prepare a design or plan and they simply perform the construction according to plans.

As you can see from this list, the type of project you have will dictate which professional you contact. The home improvement industry is largely comprised of tradesmen who do the actual work on an hourly basis or in the form of a contract. Thus, most states have contracting licensing laws regulating this industry.

The landscape related arena is referred to as the “Green Industry” and is typically divided into three main categories: Design, Build and Maintain. For the average homeowner, consideration of these three categories will help you to identify the type of professional you need to contact regarding your project.

Most of the home improvement industry advertises their services and offers the proverbial “free estimates” also referred to as a “bid”. This is a way for homeowners to ask various tradesmen to come out to their property, sized up what is needed and give them a free quote for the work involved. Note that actual design work may or may not be involved.

Simple physical work that is based on specific material choices and coverage is straightforward to provide a free estimate. However, when multiple spaces are involved with many different materials and construction work, the design itself can be complex and will require “design time”.

This is where competition enters the picture since many landscape contractors and pool companies will not charge for designs in the hope of winning the construction contract. The problem for the homeowner using the offer of the free estimate to engage several companies to provide “bids” that involves different designs is not comparing apples to apples.

A homeowner who says they want to remodel their front yard and does not give the company specific criteria, but rather, says “let’s see what you come up with, I don’t want to limit your creativity” is actually asking for free design ideas. The company on the other hand is in a tough position. Should they ask for a design fee to justify this added expense at the risk of losing the opportunity altogether?

The best way to handle your first meeting with a landscape professional is to be upfront and ask them how they operate, what is their process. Do they charge for designs which are needed to provide a quote?  These issues should be discussed either over the phone or at the initial meeting to discuss the expectations of the homeowner and to find out how the company works with this kind of scenario.

Design and Budget Must Be Realistic

So if you are working with a designer, don’t be put off if you feel they are overly concerned about knowing your “budget”.  It makes the design process much easier and saves a lot of “pie in the sky” scenarios that will never get built.

If you are paying a landscape designer for their time and want to explore different scenarios, that’s fine, but always have an idea of the cost to build each of the scenarios. Working with a designer who knows construction costs is a very valuable asset.