How do I know whether a contractor has a contractor license and is bonded?
UPDATED: February 20, 2013
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Before signing any contract, check with your local contractor licensing board. It should tell you whether the contractor’s license is valid, whether a bond is in place, and whether there have been any claims filed against the contractor that you should know about.
What Is a Contractor License Board?
The contractor licensing board is a state-run organization that approves and tracks contractors, builders, and sub-contractors. It also issues licenses to contractors in the area, typically upon passing certain state requirements. This board also has the ability to revoke licenses.
What Does It Mean That a Contractor Is Bonded?
Most states require that contractors secure a bond in their name in order to obtain a license. A bond is a large sum of money, held in a non-interest bearing account in case the contractor should make a mistake that warrants a large amount of liability. Most bonds are obtained through insurance companies and the contractor makes a regular payment to maintain their bond.
When Contractors Do Not Have a Valid Contractor License
If the contractor’s license is not valid or it has been revoked, contact the state licensing board and file a complaint. It may also be in your best interest to contact a construction law attorney as well to ensure the proper avenues are taken to protect your assets from retribution by the contractor. The attorney may also have grounds to file a criminal claim for completing construction work without a license.
Where to Find Information on a Contractor License & Bond
In most states, the licensing board posts contractors by their name and company name on a website. You may also be able to view things such as how long the contractor has been licensed in the state, whether they have any complaints filed against them, or whether they have a bond and insurance. If your state does not have a website with this information, look up the number for the department on your state’s website and call the office. The information is always free and open to the public and you can typically get an answer that same day.