Hiring a contractor for your home or business is a major investment, and choosing the wrong one can have serious consequences. If you’ve hired an unlicensed contractor—whether unknowingly or by taking a gamble—you could be facing financial, legal, and safety risks.
Before you make any decisions, here are five crucial things you need to know about unlicensed contractors in California.
1. It’s Illegal for Unlicensed Contractors to Charge Over $500
In California, any contractor performing construction work for more than $500 in labor and materials must be licensed by the Contractors State License Board (CSLB). If they aren’t, they are breaking the law—and you could be left with no legal protection if something goes wrong.
2. Unlicensed Contractors Don’t Have Insurance—You’re Liable
Licensed contractors are required to carry liability insurance and worker’s compensation to protect you and their employees. Unlicensed contractors do not.
If a worker gets injured on your property, you could be responsible for:
- Medical expenses
- Lost wages
- Potential lawsuits
This risk alone makes hiring an unlicensed contractor a dangerous decision.
3. Unlicensed Contractors Cut Corners
Because unlicensed contractors operate outside the law, they often cut corners to save money and time. This includes:
- Skipping permits, leading to potential fines or unsafe work
- Ignoring building codes, which can cause structural issues
- Using low-quality materials, resulting in work that doesn’t last
More often than not, you’ll end up paying twice—once for the bad job and again to fix it.
4. Lack of Licensing Means Lack of Training
Licensed contractors must go through testing, training, and background checks to ensure they meet industry standards. Unlicensed contractors don’t, which often means:
- Less experience and oversight
- Improper techniques and knowledge gaps
- Inferior quality work that may cost more in the long run
When it comes to your home or business, you deserve a contractor who knows what they’re doing.
5. You Might Be Entitled to a Full Refund
California protects consumers from unlicensed contractors. If an unlicensed contractor has performed work for you, you may be entitled to disgorgement—meaning you could recover all the money you paid for the job, no matter the quality of the work.
It doesn’t matter whether you knew they were unlicensed or not—the law is designed to protect you.
Hired an Unlicensed Contractor? We Can Help.
At Etehad Law, we have firsthand experience holding unlicensed contractors accountable, including our work in the landmark case, Ahdout v. Hekmatjah (2013). The court ruled that an unlicensed contractor was not entitled to recover any compensation for work performed, regardless of the quality or completion of the project. Even if work is completed, unlicensed contractors cannot legally collect compensation, and homeowners may have the right to recover their money.
If you’ve been misled or taken advantage of by an unlicensed contractor, you have legal options. Etehad Law is here to help you recover your money, hold them accountable, and protect your rights.
Contact us today for a consultation and let us fight for you.
