Going up against Unlicensed "Contractors" in CA - Contractor Talk - Professional Construction and Remodeling Forum

Andlay · 08-03-2007, 09:06 PM

New to this site so forgive me if this has already been discussed. What do you do when your competition is unlicensed "Contractors" who underbid you? This is seriously frustrating as the clients ask "but why do we need a permit?" AND more frustrating when interior designers become General Contractors!!! HELP Any advice?

Bill · 08-03-2007, 09:26 PM

here in VA I find their trade name, real name, address, phone and report them to DPOR. Sorry but if I must be licensed then they should too. If they dont like it then let them go back home

**Cole** · 08-03-2007, 09:31 PM

Quote:

Originally Posted by abp

here in VA I find their trade name, real name, address, phone and report them to DPOR. Sorry but if I must be licensed then they should too. If they dont like it then let them go back home

I do the same as well!

Amber · 08-04-2007, 01:18 AM

Licensed in California........No answer. What we usually end up doing is trying to reason with the customer and explain the risk. However, price is king for some people.

Chris Johnson · 08-04-2007, 01:48 PM

"Why Do We Need A Permit", I love it, some people are too ignorant to realize that in California when you sell full disclosure is mandatory and one of the questions are...have any renovations/remodels been completed? what was done? were permits obtained? was final inspection complete? Some people still don't get the fact we live in the most litigous state in the nation.

As for the Designer acting as the GC, they have found and are abusing the loophole in the system, they are not the GC, they are merely consulting with their client who is acting as their own GC, that is a very thin thin line, but so long as they are just consulting and advising the client and collecting 'commission' checks only, the client is signing the subs contract and paying directly the state can not charge them. I certainly hope they eventually license them under the same rules as you and I, including insurance and workers comp rules, this will help level out the playing field.

As for the un-licensed contractors, if the client is willing to take the chance of hiring someone who has no insurance, workers comp, bond, license it is a crap shoot for them as they have little or no recourse if they knowingly engage in the practice, on the flip side, the courts in California will always side with the homeowner if they do contract with an un-licensed contractor, the un-licensed can not demand any payment, even if he sues, he will loose (This has be proven over and over again).

Sounds like the Homeowner and un-licensed guys are meant for each other, let them have each other and fight it out when issues arise, you don't need the headache. You can also report it to the state, which they do take seriously and will investigate/lay charges, etc. Check out the States website, it is full of charges filed for what you have just described.

Grumpyplumber · 08-04-2007, 03:22 PM

I recently bid a remodel a few months ago.
As did 5 other plumbers.
The next day they call me and leave a message ask "How much just to do some of the work, or to NOT pull permits?", I didn't reply.

I got a call 3 weeks ago..."Can you come over soon...we need you to do the work?"

I schedule the job...when I show up the husband says "I need to talk to you about something."

Come to find they decided to do the job with the cheapest bid...guy had no license and someone called the town....the inspector showed and threatened to withdraw occupancy if permits weren't pulled by licensed individuals.

I got the job plus markup for having to demo bad work.
The other "plumber" is making payments for restitution to the homeowner...also has up and coming legal trouble for misrepresentation.

I asked the inspector how he found out after final inspection, he apparently
got an "anonymous" tip from someone about the construction debris at the house, it wasn't me...just to be clear.
He had no idea who.

BigMikeB · 08-04-2007, 03:37 PM

I heard that the state of California found lack of a license can cause cancer in adult male contractors.

Mike Finley · 08-04-2007, 05:47 PM

Quote:

Originally Posted by Andlay

What do you do when your competition is unlicensed "Contractors" who underbid you? This is seriously frustrating as the clients ask "but why do we need a permit?"

How about you sit down with a sheet of paper and write down 10 draw backs to not pulling a permit. I'm betting you can do it in less then 30 minutes. Next time you'll know the answer to your customers question and be able to answer it. The cheapest people can usually rationalize away 4 or 5 of the reasons, but even the super cheap can't rationalize all of them.

RobertCDF · 08-04-2007, 08:10 PM

Quote:

Originally Posted by BigMikeB

I heard that the state of California found lack of a license can cause cancer in adult male contractors.

I always wonder about how everything there causes cancer... I think the state of california causes cancer so everything they test there "causes cancer"

SPCarpentry · 08-05-2007, 05:35 PM

I feel your pain. I just gave a bid to build a home office in the basement of a brand new 800K home for the wifes business. After the homeowner (30 tops) looks at my bid he calls me with some questions. Everything is going good then after 10 minutes he asks " how much if we pay you cash?" I tell him if I cash his check at his bank it is cash! Then he asks do we really need a permit seeing the house is new? I tell him no permit no work! I'm not going to risk my license to save you $100 in permit fees. In the end I got the job and on my terms. Oh Ya my price was 4,300 the next guy was 12,000. Room is 15x18 no mechanicals just frame the walls hang some doors and a drop ceiling. I try to be nice and tell homeowners that in the long run it's not worth it to use unlicensed contractors.

POOLMANinCT · 08-05-2007, 05:45 PM

I'm a bit puzzled, was 4300 a typo did you mean 43k?????
as next bid was 12k...

ray

jensenconstruction · 08-05-2007, 08:16 PM

Quote:

Originally Posted by abp

here in VA I find their trade name, real name, address, phone and report them to DPOR. Sorry but if I must be licensed then they should too. If they dont like it then let them go back home

I do the same here in California. The CSLB has a for on their website for this purpose.

Grumpyplumber · 08-05-2007, 09:33 PM

Quote:

Originally Posted by SPCarpentry

I feel your pain. I just gave a bid to build a home office in the basement of a brand new 800K home for the wifes business. After the homeowner (30 tops) looks at my bid he calls me with some questions. Everything is going good then after 10 minutes he asks " how much if we pay you cash?" I tell him if I cash his check at his bank it is cash! Then he asks do we really need a permit seeing the house is new? I tell him no permit no work! I'm not going to risk my license to save you $100 in permit fees. In the end I got the job and on my terms. Oh Ya my price was 4,300 the next guy was 12,000. Room is 15x18 no mechanicals just frame the walls hang some doors and a drop ceiling. I try to be nice and tell homeowners that in the long run it's not worth it to use unlicensed contractors.

Just noticed your location...the story I told about the unlicensed work was not a half hour from you.

tinner666 · 08-06-2007, 06:55 AM

Quote:

Originally Posted by abp

here in VA I find their trade name, real name, address, phone and report them to DPOR. Sorry but if I must be licensed then they should too. If they dont like it then let them go back home

Same here! Hey there, I'm in the process of moving into Green Bay. We might even run into each other sometime.

SPCarpentry · 08-06-2007, 03:52 PM

Quote:

Originally Posted by POOLMANinCT

I'm a bit puzzled, was 4300 a typo did you mean 43k?????
as next bid was 12k...

ray

My price is $4,300.00 the other guy was $12,000.00!

All I'm doing is framing a 15'x18' office in the basement of a new home. 2"x4"x7' walls. Insulate, sheet rock & tape. Hang 2 pre-hung doors and a 2'x2' suspended ceiling. My price does not include. electric, heat/ac, paint, carpet etc.

I probably could have gotten some more $$ BUT no way could I have bid 12.000.00 for the job. I think the other contractor looked at the new 800k house and the owners cars and figured they would pay it.

tinner666 · 08-07-2007, 08:37 AM

Maybe his was 'All-Inclusive' with subs for each task, plus his cut from each one. Hard to tell at times.

Mike Finley · 08-07-2007, 08:55 AM

Quote:

Originally Posted by SPCarpentry

My price is $4,300.00 the other guy was $12,000.00!

All I'm doing is framing a 15'x18' office in the basement of a new home. 2"x4"x7' walls. Insulate, sheet rock & tape. Hang 2 pre-hung doors and a 2'x2' suspended ceiling. My price does not include. electric, heat/ac, paint, carpet etc.

I probably could have gotten some more $$ BUT no way could I have bid 12.000.00 for the job. I think the other contractor looked at the new 800k house and the owners cars and figured they would pay it.

Lord, I don't think I would unload a tool for $4,300 to do what you are describing. Payroll, insurance, marketing costs, tools, vehicles, a little thing called profit... etc... $4300 sounds like about break even, especially with a customer like the one you are describing. What chances are the other guy realized what it will be like working for this guy and had correctly calculated his charges with inclusion of the standard PITA charges.

kevjob · 08-07-2007, 08:59 AM

[quote=Andlay;271746] This is seriously frustrating as the clients ask "but why do we need a permit?"

Mr Homeowner two reasons, first your insurance will not cover you if the job requires permits and you do not get the required permits.

2. The city or county requires permits for your protection without them how do you know everything is done to code?

Grumpyplumber · 08-07-2007, 10:07 AM

Quote:

Originally Posted by kevjob

2. The city or county requires permits for your protection without them how do you know everything is done to code?

Thats easy...you can usually tell by the sloping floors, drooping ceilings and cracked drywall seams five years later.

MEL · 08-07-2007, 12:44 PM

You need to be prepared to eliminate your competition. The best way to do that is to get some sales training. Phil Rea is the best sales trainer that I know of in the home improvement industry.

You might be able to find some of his training videos & audio CD’s on eBay.