In another case of “buyer beware,” in April 2022, Virginia legislature passed a bill 
declaring that contracting work valued at less than $25,000 can be performed by a person without requiring a contractor’s license. Their language: “exemption from licensure.” This new law can subject homeowners to a number of potential dangers and liabilities when hiring an unlicensed contractor, as we’ll look at in this post.
VA SB121 New Exemptions on Contractor Licensing Requirements
Taken directly from the Virginia Legislative Information System, VA SB121 states that the “Department of Professional and Occupational Regulation (DPOR), Board for Contractors, exempted from the ‘licensure requirements for contractors’ any work undertaken by a person providing construction, remodeling, repair, improvement, removal, or demolition valued at $25,000 or less per project on behalf of a properly licensed contractor. Current law provides this exemption to such work valued at $5,000 or less per project.”
The Dangers of Hiring an Unlicensed Contractor
Lack of Experience
There are potential risks involved should you choose to engage an unlicensed contractor. They may lack the necessary training, experience and expertise to complete the project to industry codes and standards. This could lead to subpar workmanship, faulty installations or incomplete or abandoned projects, resulting in additional expenses for repairs.
An unlicensed contractor may not abide by industry codes and regulations, or be held accountable to regulatory bodies that oversee practices and compliance. You may not be able to hold the contractor liable for compensation or resolution through the legal system.
Financial Liability
An unlicensed contractor could expose you to legal and financial liabilities. Licensed contractors usually carry liability insurance, which protects homeowners in case of accidents, injuries or property damage during the project. Without this insurance, you may be vulnerable to covering these costs.
Permits
Additionally, an unlicensed contractor may not be well versed in the permitting requirements, and without proper permits, your project could be subject to fines, forced removals or difficulties selling the property in the future.
How to Check if a Contractor is Licensed in Virginia
To check if a contractor is licensed in Virginia, utilize the online resources provided by DPOR. It maintains a user-friendly online database. Navigate to the “License Lookup” or “License Verification” section to enter the contractor’s name, business name or license number.
The database will provide details about the contractor’s licensure status, including their name, business name, expiration date, and any applicable classifications or endorsements. It may also offer information about any disciplinary actions, complaints or violations. You may also contact DPOR by phone for specific inquiries or concerns.
Contractor’s Licensing Requirements in Virginia
Prior to passing of VA SB121, individuals in Virginia legally allowed to perform building or remodeling contracting work for projects less than $5,000 were commonly referred to as “handymen.”
DPOR differentiates between projects that require a license, and those that do not. Handymen typically engage in small-scale, minor repairs, maintenance and tasks that don’t substantially alter the structure of systems of a building. These projects fall below a certain threshold in terms of complexity and value. While handymen can perform smaller tasks without a contractor’s license, it is advisable to choose individuals with relevant experience, skills and a solid track record of successful projects.
For more substantial projects, alterations to structural components or major electrical, plumbing or HVAC work, DPOR may require a contractor’s license.
There are different levels of licensing based on the complexity and scope of projects. These classifications ensure that contractors are appropriately matched to projects that align with their expertise and capabilities. Additionally, specialty license can be issues for specific trades or services, such as electrical, plumbing or HVAC work.
- Class A License – the highest level, required for contractors whose projects exceed a certain value threshold, including commercial and residential work. Class A contractors can undertake projects of any size and complexity.
- Class B License – typically covers medium-sized projects in construction and remodeling work up to a certain threshold value.
- Class C License – intended for contractors handling smaller construction and remodeling projects, both residential and commercial.
How Can Homeowners Protect Themselves?
Protecting yourself against building or remodeling contractors requires proactive steps and strategies to mitigate potential risks.
Background Research
Before entering into an agreement, check the contractor’s background and work history. Request references from previous clients and contact them.
Written Contract
Insist on a written contract outlining all project details, including scope of work, timeline, materials, and costs. It should specify that the contractor is responsible for obtaining necessary permits.
Insurance
Ask for proof of liability insurance and verify its validity.
Payments
It is advisable to avoid paying for the full project up front. A reputable contractor, licensed or not, typically follows a payment scheduled tied to project milestones. This incentivizes the contractor to complete the work to your satisfaction before final payments are made.
Hire a Consultant
Consider hiring a third-party inspector or consultant, like Först Consulting Group. They can oversee the project’s progress and quality to ensure the work is done to industry standards. Key advantages of hiring a consult include their expertise and experience in construction and remodeling practices, ability to provide an objective evaluation, and assistance in communication and negotiation with contractors.
If needed, consultants have access to a network of professionals including engineers, architects and legal experts who can provide specialized assistance.
Be Vigilant
Be vigilant and attentive, and regularly inspect work as it progresses. Address any concerns promptly and seek resolution in a professional manner. If disputes arise, a consultant like Först can help negotiate settlements or represent you, as the homeowner, in a legal case as an expert witness.
Contact Först Consulting Group
For assistance with hiring, monitoring or managing an unlicensed contractor, contact Matthew Furlong at Först Consulting Group.
