The 'Unlicensed' Contractor

As we stated last week in our column, the current economic conditions confronting the construction industry are quite simply the most dire since the Great Depression. It is imperative to be vigilant when hiring a contractor. It is your responsibility to do your due diligence and that is where YCCA comes in. Many internet referral sources and marketing companies do not verify license status, they leave it up to the consumer to verify the legitimate issues before hiring or doing business with the contractor. YCCA walks you through this verification and we will assist you. You can trust our reviews.

This week we will address the “unlicensed” contractor. Licensing is not necessarily a measure of competence; however it certainly states a certain degree of professionalism and commitment to the industry. In these economic times, there are many individuals who try to hold themselves out as licensed contractors performing out of their scope of work.

The State of Arizona, through the Registrar of Contractors promotes quality construction through a licensing and regulatory system designed to protect the health, safety and welfare of the public. Not all licensed contractors are wonderful, honest and have the best reputation, so let’s clear the air right now – having a license does not make a good contractor. However, having a license does offer a source of protection to the homeowner and gives a higher level of confidence. It is important to protect yourself by avoiding unlicensed contractors and YCCA is committed to protecting our citizens against unlicensed contractor activities and scams.

It is important to be aware of what can happen if you hire an unlicensed contractor. If the work is not done to code or workmanship standards there is no recourse against the unlicensed contractor, other than through civil courts.


The early warning signs of an unlicensed contractor are the following:
1) A large down payment is requested before the work begins
2) You, as the homeowner are asked to obtain the permit
3) Verbal contract only, the person is not willing to put all terms in writing
4) The contractor does not have proof of insurance
5) You are asked to make checks payable to an individual
6) You are asked to make payments with cash
7) The contractor does not state “not a unlicensed contractor” on his paper work or business cards. (This is a requirement in Arizona)
8) Has an ROC number on their business cards and contract that does not match the company name.
9) License numbers are not on company vehicle, business cards, advertising, etc.

You, the homeowner can also ASK THESE QUESTIONS:
1) Ask what type of license they have
2) Ask to see a copy of their license
3) Ask for a copy of their workers comp insurance and liability insurance certificates

An unlicensed contractor is someone who does repairs or makes improvements to your home without the appropriate license. Typically, unlicensed contractors work for less than licensed contractors because they avoid all insurance and licensing requirements.

While an unlicensed contractor may provide you with a low price, there are many risks involved in dealing with one:
1) Unlicensed contractors cannot obtain building permits so their work is not inspected and more than likely will not be up to code.
2) If an unlicensed contractor improperly installs an appliance, such as a water heater that explodes, your insurance will not cover the loss.
3) Product warranties may be void if installed by an unlicensed contractor.

Problems may occur during construction, this happens with licensed contractors as well, however, in the State of Arizona, your contract is not enforceable through the ROC and you do not have any protection when using an unlicensed contractor. The average experience in dealing with an unlicensed contractor can be devastating. Most of the consumers that call me for help complain that the unlicensed contractor did shoddy work and other call to report that the contactor ran off with their money, or started the job and never finished. We have in our community right now a painter operating his company without a license and passing himself off as being licensed. Yes, his bids are coming in lower than other companies, more than likely he does not have insurance. Another case that happened last week, a contractor demanded payment in full, the contractor made inspections around the home, made a list of materials needed, said he would leave to purchase the supplies, never to return! The phone number and address were phony! The couple from Prescott Valley lost $8,000. A 75 year old woman just called. She hired a landscaper to do several thousand dollars of landscaping. The company is licensed, for concrete work only and not landscaping of any sort. They are advertising as a qualified landscaper. She now has a yard full of deal plants, weeds growing and drainage issues.
Had these families called YCCA, we could have informed them of the issues and not to use these companies.

As we have shared with our readers on many occasions, it is essential and vitally important to verify the credentials of any contractor you are considering to hire. You can easily do this by calling YCCA and we are happy to confirm if the contractor is licensed and in good standing, the license issuance date, expiration date and complaint history on their record for the last 5 years. We can also confirm if the license has been suspended for any reason during the time period of the license being active.

YCCA is here for the protection and education of the citizens. It is all about protection and operating within the guidelines of the law. As a citizen hiring a contractor, you have more protection when you use a licensed contractor vs. a handyman or an unlicensed individual.

Phone: (928) 778-0040

810 E. Sheldon Street, Prescott, AZ 86301

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