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Contract With An Unlicensed GC

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Old 09-04-2014, 02:51 PM   #21
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Re: Contract With An Unlicensed GC

My firm has a little bit of experience with this. We are a licensed (CA) electrical and security contractor. For instance, we sub for a NY security firm here in California. It has been probably over 4 years now and pretty much no hitches.

We also sub for some local security contractors (one of whom we co-own and license), and, we work with fellow contractors who do the same thing we do, but sometimes need extra help. And we also use each other employees as necessary.

Here is the deal: we only work with contractors who hold all the licenses necessary in their state. We sign legal and binding contracts. We don't deal with third parties or middlemen. You may want to keep that in mind.

I have been not paid and ripped off in the past. The offenders where: A CCTV security firm in Washington State that did business in California (no license, nothing); A GC, property management firm that didn't pay us for work on short sale homes here in CA. And finally, we got sued by a local landscape contractor who (by being an idiot) got himself sued, so he turned around and sued us to lessen his own pain.

The theme in most of these is that I needed the work and the money. The work I got, the money I didn't. Suing them was more time and money than I had to spend --- much less recover.

Here is another thing you may run into. Laws are one thing, enforcement is another. In California, you can contact the CSLB (California State Licensing Board) until you turn blue when it comes to unlicensed, uninsured, ripoff type contractors that give legitimate folks a bad name. 99.9% of the time, the CSLB doesn't give a crap. When they do one of their publicized stings, they boast about catching a guy for the 10th time, who has ripped off millions of dollars and thousands of clients...........obviously, catching the guy the other 9 times didn't do much to stop things.

Much closer to home, I have an unlicensed, uninsured, handyman/hack who lives below me, and, runs his illegal business out of his condo. No license, no business license, insurance, zip, nothing. Doesn't pay taxes on any of his work, bad mouth's and threatens other contractors, has a criminal history of violent behavior, .....and is a member of the local carpenters union (unless he got kicked out again).....he also doesn't get hired much because he is 100% illiterate...can't read, can't write, can't follow directions....and pretty much can't get much union work either.

But his wife works the the city. No one in the city, county or state really cares what he does or doesn't do. Again you can complain, but nothing happens.

So the moral of this whole rambling rant is: Regardless of random success, you are still rolling the dice with unlicensed and gray area type far as getting paid. Don't expect the government or the legal system to be sympathetic to your dilemma if you get ripped will simply be another victim in a long line of victims. Unless it's a ton of money....suing is not an option, even in California Small Claims Court (winning is one thing, collecting is another).
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Old 09-26-2014, 02:56 PM   #22
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Re: Contract With An Unlicensed GC

I am not too worry about getting paid. We keep these guys in line and bill the end user if the gc doesn't pay. That usually solves the issue, especially when you mention the word 'lien'

I did speak to an attorney and he didn't have the exact law in front of him, but he did have a case in which his client was being sued by another contractor. The attorney called the plaintiffs' attorney and said.

"I can't find copies of your Client's contractor license, bond, insurance, etc. Can you send it to me?"

Case dropped.

So, I guess I won't worry too much about these out of State guys who call me up and ask me to be their sub and perform the work for them.
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Old 09-26-2014, 04:41 PM   #23
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Re: Contract With An Unlicensed GC

Originally Posted by rtztgue View Post
I can see flirting with disaster if we were talking about $100k remodel... but this is a $250 break fix...

Example: "hey wal mart broke a door closer... here is a Credit Card, please go fix"

OR, if they pay okay, and pass a credit check, we will invoice and file a lien with the end user if this GC doesnt pay.

That is not likely to put me out of business... At the moment I make good money dealing with them as long as I make them toe the line. I do. I am simply taking it to the next level as I am starting to see contracts get a little more onerous.

And theses NSP's seem to be here to stay. I keep up with their changes, charge them good money, and wait for them to be replaced when they fail as a company.

For 15 years they have been growing and changing. Hell, I once did 3 jobs for a Macy's in one day for 3 different NSP's Made damn good money cause I was already there and each job had a billable minimum... But that takes knowing the rules and working with them, while keeping them on a short leash.

Hey don't tell our secrets on how to maximize income....

I love the minimum jobs. 25 mins and 150 in the pocket.


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