Are Unlicensed Contractors Stealing Your Business? Here’s What to Do

It’s so hard to do the right thing when you’re surrounded by people who don’t. You go to the effort of studying and taking the time to get your license so you can operate honorably. Then you see unlicensed contractors driving through neighborhoods and business districts, offering services to people who might be your customers. California does allow unlicensed contractors to do certain types of projects, but there are strict limitations. Here’s a few tips to make sure that you’re not losing work to people who shouldn’t be taking those projects in the first place.

Know the Rules for the Project
The rules for projects that may or may not need a licensed contractor depend on the state. In the state of California, anyone who wants to do a project that costs $500 or more for labor and materials needs a contractor’s license. This limits the legal work that unlicensed contractors can do, since $500 for the full project doesn’t go very far. Keep in mind that state licensing requirements don’t usually transfer unless the state has a reciprocity agreement. This means that someone who has an active license in Nevada may be able to do work in California, but someone licensed in Illinois might not.

Understand the Risks of Unlicensed Contract Work
If you ever felt inclined to ignore this problem in your area, you should know there’s several reasons to pay attention. It’s not just that unlicensed contractors might be taking your clients with promises of lower costs or quicker turnarounds. They often do work of lower quality, especially if they don’t have the same amount of experience that a licensed contractor does. They’re less likely to follow building conventions, like obtaining the right permits for the job. They may even scam property owners with fake offers of work for an advance payment. This can turn into an expensive headache for you, when property owners call you in to fix a mess.

Gather Information About Unlicensed Contractors
Doing work as an unlicensed contractor outside the legal limits is a criminal act punishable by fines and/or prison time. As with any other criminal case, the state needs evidence to prosecute and hope to get a conviction. Most unlicensed contractors know this, so they’ll try to avoid putting too much in writing. Your job is to gather everything that they leave behind, like estimates, receipts for payment, or advertising materials falsely claiming that they have a license.

Report Violations
Once you have some information on unlicensed contractors in your area, you need to report them. Doing this consistently may not feel like a triumph, but you should keep in mind that you’re saving a lot of people trouble by doing it. The Contractors State Licensing Board (CSLB) has two ways you can report violations. You can fill out a form to file a complaint that someone is advertising illegally. You can also submit a lead referral to the Statewide Investigative Fraud Team (SWIFT). The more information you can provide, the better the state organizations can follow up on the report.

Make Showing Your License a Part of the Process
It’s unfortunate but true that most property owners learn about this the hard way. Too many people say that they didn’t think to ask for or verify a license because they assumed the contractor had it covered. You can do your part to cut down on the problem by making it a point to show your license in every consultation with a prospective client. When they see you take this step, they’ll come to expect it from everyone they consult. This erodes the market for unlicensed contractors, making it a less-profitable way to earn a living.

Unlicensed contract work is a serious problem in California, and the state needs licensed contractors to help root it out. To discover more benefits of earning your contractor’s license, contact CSLS today!

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About CSLS

Contractors State License Service (CSLS) is the largest school in California devoted to the Construction professional. For over 23 years, CSLS has helped its students pass the exam to become licensed contractors in the State of California, licensing more students than any other school. From our main offices in Southern California, CSLS operates over 25 locations with full-service support and classrooms. We have grown to this extent by providing quality, professional services. In comparison, this provides 7 times the number of convenient locations than the second largest contractor school. Contractors State License Services is one of the only contractor schools in the state that is run by educators, not lawyers or people mostly interested in the bonding and insurance business. Contractors State License Services formerly operated under the oversight of the State of California's Bureau for Private Post Secondary and Vocational Education. As of January 1 2010, the new Bureau for Private Postsecondary Education (BPPE) came into existence replacing the BPPVE. CSLS now operates under the provisions of the California Private Postsecondary Education Act of 2009 (CPPEA), Article 4 Section 94874(f). Our Mission is simple; We can help you pass your California Contractors License Exam. Celebrating our 25th year, CSLS has helped over 120,000 students pass the California contractor licensing exam to become licensed contractors in the State of California. Additionally, we offer complete home study and online contractor’s license programs to help you pass your California contractors license exam. CSLS offers licensing classes for all types of contractor licenses, including General Engineering Contractor, General Building Contractor, Specialty Contractor, Insulation and Acoustical Contractor, Framing and Rough Carpentry Contractor, Cabinet, Millwork and Finish Carpentry Contractor, Concrete Contractor, Drywall Contractor, Electrical Contractor, Elevator Contractor, Landscaping Contractor, Warm-Air Heating, Ventilating and Air-Conditioning Contractor, and many others. For a complete list of contractor licenses, visit and tuned for more informative posts.