Why are some contractors more expensive than others?

The answer to this is often simple. If you receive an estimate that is way below that of the other competing contractors there is usually good reason for it. Legitimate contractors incur a lot of expenses to be in business and it is difficult not to incorporate those expenses into an estimate. Contractors who try to buck the system pay less to stay in business and thus can charge less and still enjoy the income of a legitimate contractor.

What does it hurt to hire contractors who don’t fulfill their licensing requirements?

It’s cheaper – right? So what’s the big deal? Actually, it hurts quite a few people. First of all it hurts the contractors who fulfill all their licensing requirements by taking business away from them. Secondly, it hurts the taxpayer. The state relies on licensing revenue to provide services to the taxpayer. Without that revenue, we the taxpayers get inferior service or none at all if the state falls short. Lastly, it hurts the homeowner. If a contractor has no problem ripping off the state and the taxpayer, they will more than likely not think twice about ripping you off.  Oftentimes, homeowners have no recourse if a unlicensed contractor skips town with the deposit they paid to start work. The homeowner also has little to no recourse if a contractor does poor quality work. Lastly, the homeowner who hires the unlicensed contractor has little recourse if the contractor does damage to their property.

What are the licensing requirements of a contractors and what are the purpose of them?

There are quite a few licensing requirements. The first is to obtain a bond. A bond is basically a line of credit that a contractor pays to keep every year in the event that their work is found to be unsatisfactory. If the contractor is unwilling or unable to remedy the situation the homeowner may seek those funds ($12,000  in Washington, $20,ooo in Oregon) to hire another contractor to complete the work correctly. A smart contractor will attempt to remedy the situation themselves, because a bond is not insurance. The contractor must pay back every cent that the bonding company pays out. More than likely that bonding company will not continue issue a bond once there has been a claim against that contractor. The second requirement is to carry liability insurance.  This protects the homeowner against accidental damage to their property by the contractor. We have seen homes burnt to the ground by workers, and if there is no insurance to cover it, the homeowner can be left with nothing. A homeowner may attempt to make a claim with the company who provides their homeowner’s insurance, but more than likely the claim will be denied. Thirdly, a contractor is required to have workman’s compensation insurance for their employees. This protects the employees if they get injured on the job. Without this many workers can be left destitute by overwhelming medical costs and loss of income. It also protects the homeowner. If a employee is denied compensation by their employer they could go after the homeowner in the form of a lawsuit. Lastly, some states require that a contractor pass an exam to obtain an initial license  and complete continuing education to be eligible to renew their licenses. This is the case in Oregon, but not Washington.

Is there benefit to hiring a contractors licensed in multiple states?

For Washington residents the answer to this question is yes. Oregon has much stricter licensing requirements and has much higher penalties for licensing infractions. A contractor licensed in Oregon has more education and a greater fear of breaking the rules than a contractor who is licensed in Washington. We are licensed in both Washington AND Oregon. Our licensing status is always available to view at the bottom of our home page of our website!

 

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