By Murray Wennerlund published 9-4-2022 updated 11-18-2024
Make a contribution
Print,
License
LA
Fact Check
962 views
Your state and local municipality advise you to protect yourself and hire only licensed contractors to work on your home. Some municipalities will not provide you with permits unless you have a state-licensed contractor to sign or pull the permit. Your state and local agencies may give you the impression that they are the agents tasked to enforce state statutes, civil and criminal laws related to the licensing requirements. You might even be under the impression you will be protected by your state agency responsible for the punishment of any violation of state statutes related to contractor fraud and misrepresentation.
Let's call out a few of the classic issues homeowners have with contractors and how the licensing board might classify the issue:
From LSLBC Compliance, Enforcement Division, Louisiana State Licensing Board for Contractors.
"This Board does not involve itself in or dispute civil and/or criminal matters. We only have jurisdiction regarding licensing."
What this means for homeowners is that the Louisiana Licensing Board for Contractors will tell you via text, website, email, or phone if the person that has identified themselves as being a contractor is actually licensed to be a contractor. That's all they will do, don't expect anything else. It's on the homeowner to make sure Residential Codes are being followed, proper health and safety protocols are adhered to, and industry standards in building techniques are maintained.
If you require a permit, you can file for a homeowner contractor waiver and pull the permit yourself so your subcontractors who aren't licensed don't get audited. It's a common and well-known practice for licensed contractors to hire independent contractors, who are classified as unlicensed contractors according to the revised statutes regarding licensing. The state says anything over $7,500 in labor and material costs requires a licensed contractor. But your licensed contractor who outsources all the work to do your home doesn't ask for licenses from the subcontractors because there is no enforcement once a permit is pulled by someone who is legally allowed to pull it which would have been the contractor acting as a labor broker using labor that is not employed by the contractor but hired as private individuals and independent contractors.
Basically, you are paying a middleman unless the workers are actually W-2 employees, which is rare in the industry.
If a person claiming to be a licensed contractor doesn't present proof and does not pull a permit with your city or parish, the state licensing board for contractors will never receive notice to review if the contractor has proper insurance and an active license. The state licensing board will only review licenses when the contractor's name is placed on the actual permit and submitted to the state by your local permitting office. If you are not required to have a permit, then according to the checks and balances, you are not required to have a licensed contractor. The best way to proceed with the least number of bureaucratic issues is to request a permit in the homeowner's name, secure the proper insurance for any injury claims or material theft, and then hire whoever you want to work on your home as long as it's not outside the skillset of the person you hire.
The State of Louisiana Licensing Board for Contractors collects a license fee and will fine a company for not having a license but will not assist a homeowner or make sure your health and welfare are protected.
The state does not provide proof to you that the contractor is actually in the trade business; that's up to you to research and collect references. You actually have to ask the contractor if they will be at your job site every day using tools and materials. That's when you find out if your contractor is simply doing a side hustle by arranging for others to do the work.
If you are under the impression that your state licensing board will assist you with disputes, you are seriously mistaken. In fact, it's a good idea to get this in your checklist of things to learn right away. If you give a deposit and the contractor never returns, you will have to go after the person in civil court. If you report them to the police and then to the state, you will have to wait for the police to make their arrest and the state to file its penalties and collect their money. Then you can take that information into civil court and try to recover from your ignorance and blind trust. But let me share one thing with you: even a licensed contractor can have financial issues and ask for money upfront and not complete the work. They could drag their feet for 45 days before you would have the right to file against them. That's if they presented you with a valid contract and you hired an attorney to represent you. Once this issue becomes a legal issue, you're going to find you are on your own. The state and your local municipality will not assist you in your civil filings.
Most homeowners simply cut their losses, file an insurance claim, and learn from the experience, trying never to repeat the blind trust mistake again. Money as a down payment is for staging and should have a security bond or at least a certificate of liability insurance naming you as the certificate holder. But no matter what you read, your excitement will get the best of you, and you will place a deposit. So do your best to make sure your deposit is money you can afford to lose, expecting nothing in return. You are to pay for progress as defined in your contract. If you have to prepay for materials and supplies, you should be given an invoice itemizing the items with their related costs. Never pay in advance for labor more than a full day's work. It's important to establish a baseline with your workers so they don't expect to get paid on a Monday for work that will be done on Friday. It's not how the world turns, and it shouldn't be something you do. Keep this in mind: you are not their Payday Advance or Payday Loan service. Try it yourself; when you go into work on Monday, ask for Friday's check.
Do not cut a check until the following is in your hands:
(it's difficult because you are asking someone to do what is law.)
So why would you go out of your way to hire a licensed contractor?
A barber has more licensing requirements than a builder to be granted an occupational license. Barbers complete 1,500 hours of training, whereas a contractor only has to have proof of insurance and the ability to take an open-book exam with no training. This is why sales professionals, bread bakers, insurance agents, investment brokers, job placement agencies, lawyers, realtors, and labor brokers make up many of your construction license holders. No industry experience is needed to remodel a home. This is why homeowners need to treat contractors that do not actually work on-site as labor brokers and labor providers. You must oversee your project on a daily basis and document everything with time and date stamped pictures and notes, including text messages and emails. The licensed contractor that you hired who's actually a Hammond Bread Baker or the night club manager and the print shop owner with a contractor's license isn't going to be much help to you when construction issues surface. One thing I would suggest is asking to see their workers' training schedule and their copy of the IRC code book your local municipality wants you to follow. You might find you see your contractor only on paydays and nothing more.
For most home improvement jobs, it may be better for the homeowner to act as their own contractor and hire labor directly from the same labor pool pickup areas as your labor brokers do. If you plan everything, stage your project, and have detailed plans with instructions, just about any trade skill experience level should work as long as you do not relax on literacy standards for your job site and watch carefully.
Some professional trades are regulated by your state and local municipality. Be sure you understand if you are required to pull a permit for any work that covers any of the four categories listed below. Keep in mind that many municipalities only require licensed professionals for new construction and not for service, repair, or installation. Sometimes you'll find someone skilled and insured who can do the repairs just fine. Keeping in mind that insurance claims would be a civil issue, so it's best to have all work reviewed so as not to be forced into any legal action to get your home improvements completed.
In the categories below, it's always best to hire skilled tradesmen that have special training and certifications:
No matter who you hire for your carpentry work, you should verify that the specialty trades are licensed and provide their license and insurance with your name on it before they start work. Otherwise, you'll never be able to place any type of civil action on them for shoddy work if it's discovered they did not do the work to at least match residential code and industry standards.
Keep in mind you are the project owner and main contractor, not them. They are the trade professionals you hire and pay. You even judge the quality of their work. Even if you are a layperson, it's still your final word that determines a completed project. Savvy homeowners offer the best referrals if you ask me.
It might be a good idea to research your options. Extra insurance coverage that covers material losses as well as injuries may actually cost you less than having a builder offer insurance for workers classified as independent contractors. I've been told by builders to get builder's risk insurance as first coverage, which is a discussion in itself regarding where or who this arrangement assists. If you are hiring your workers as a homeowner contractor, it's a good idea to identify with the worker any expectations of coverage.
Post your projects and ask for public reviews. Sharing pictures and plans with the world often leads to better oversight when you learn what to look for. From creating a draw schedule and progress report to a quality control audit, it's your home, it's your project—you are hiring a person to do work that either you can't do or you expect them to do better than you could.
Research Resources: