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.