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Finder's fees and liability for referring non-licensed individuals

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EarlVorhees

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Discussion starter · #1 ·
This is a two-part question.

I have a friend who has been working for my landscaping company for a few years doing outdoor carpentry on some landscaping projects. We have decided to go our separate ways (never hire your friends!) but he asked if I could send work his way in exchange for a finder's fee. So,

1) What would be a fair percentage to ask for a finder's fee? I may not hire another carpenter for a while so I'm not trying to recover that cost necessarily.
2) He is not licensed or insured, so I would definitely let my clients know this ahead of time so they can decide the level of risk they are comfortable with, but could I be held liable for making the referral if anything went wrong?

Thanks
 
#4 ·
I agree with hdavis and kingcarpenter1 above. You have a lot more to lose than you do to gain in this scenario. If you refer an unlicensed (where required) and uninsured contractor, then you take on a bit of risk, IMO. If you tell the homeowner you are aware of these deficiencies in advance, then you knowingly referred this contractor. It’s at best a no-win, worst case a big lose for everyone if this friend of yours messes up somehow.

Maybe after he prices out insurance he’ll want to mend fences and get back on the payroll.
 
#6 ·
In this state there's what they call a "Duty of Care" in other words if you recommend someone in your professional capacity you can be held liable.

Check your state laws.


Mike.
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#9 ·
Don’t help someone cheat the system.

Lowball scabs who don’t actually run a real business make it harder for legit businesses. And it propagates the belief that “contractors” are scummy.

When he starts to run a legit business, then you can decide if working with him is a good thing.
 
#11 ·
As a professional, I would never refer someone who lacked professional credentials.

It isn’t like there is some conspiracy to keep good guys out the trades. It’s fairly easy to get licensed, get legitimate, and get your paperwork in order.

And it provides benefits to the customer and the contractor.

The fact of the matter is, at least in my area, if someone is doing the work without the proper licensing, it’s always because they are a half assed jack leg.

Never because they are a genius craftsman being kept down by The Man.
 
#13 · (Edited)
Check your state laws.
In my state, it is illegal to give or receive compensation for a referral. A person giving referrals in exchange for compensation (in construction trades) is considered a salesperson and must be licensed as salesman for the company paying the fee. And can only be a salesman for one company.
Also, if you are not yourself licensed as a GC or carpenter, it is illegal in many states for you to hire a carpenter to work for you if he's not licensed. A landscaping license in most states does not entitle you to do carpentry work, whether it is part of a landscaping job or not.
 
#14 ·
Seven-Delta-FortyOne said:
Is being a sleazy businessman a Florida thing?
Click to expand...
Seven:

Lol. I think you're lacking context. The OP's asking about referrals for a landscape carpenter. What, a stack of railroad ties may tip over and ruin a flower bed? Of course proper licensing is a good idea when it's required, but that doesn't sound like the case here. More like a neighbor asking for a tip on a babysitter or a kid to mow grass.
 
#15 ·
Calidecks said:
In this state there's what they call a "Duty of Care" in other words if you recommend someone in your professional capacity you can be held liable.

Check your state laws.


Mike.
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Click to expand...
There's a common law cause of action in many states that's similar. You should have known there would be illegal work done, so you're negligent making the referral, even if you disclose to the HO that there may be illegal work done.

The HO gets detrimental reliance on your referral. You own at least part of any problems, and license boards may have their own view on this as well.
 
#16 ·
Kingcarpenter1 said:
Sounds like a good ol boy scratch my back deal & don’t worry I’ll be safe no problem... Any bet’s

Mike
Click to expand...
it costs nothing for a disappointed customer of unlicensed to sue OP as the referral source -- thus tying up OP s insurance carrier, and OP for countless timewasting court procedures. i'd never do it.
 
#17 ·
Kowboy said:
Seven:

Lol. I think you're lacking context. The OP's asking about referrals for a landscape carpenter. What, a stack of railroad ties may tip over and ruin a flower bed? Of course proper licensing is a good idea when it's required, but that doesn't sound like the case here. More like a neighbor asking for a tip on a babysitter or a kid to mow grass.
Click to expand...
Everyone is lacking context. What happens if he cuts through fiber optic, gas line, etc? What happens if he creates a trip hazard?

SHTF is what .
 
#18 ·
Kowboy said:
Seven:

Lol. I think you're lacking context. The OP's asking about referrals for a landscape carpenter. What, a stack of railroad ties may tip over and ruin a flower bed? Of course proper licensing is a good idea when it's required, but that doesn't sound like the case here. More like a neighbor asking for a tip on a babysitter or a kid to mow grass.
Click to expand...
It grows. First he builds flower beds, then a small fence, then a big fence, then a small gazebo, then a deck, then a porch cover, then he is attaching it to a house, then roofs it, then...

Just how it works.

Also, if your kid is next to those railroad ties and they fall over?

Sent from my SM-N975U using Tapatalk
 
#19 ·
Kowboy said:
Seven:

Lol. I think you're lacking context. The OP's asking about referrals for a landscape carpenter. What, a stack of railroad ties may tip over and ruin a flower bed? Of course proper licensing is a good idea when it's required, but that doesn't sound like the case here. More like a neighbor asking for a tip on a babysitter or a kid to mow grass.
Click to expand...
I understand that.

But if thats all it is, then why the concern not to get it in writing?

Between advising to do something borderline shady, but not get anything written down, to advising a contractor to walk on a project when he's half way done, to bailing out when you break water lines, your advice usually just makes you look a typical Florida sleaze.

No offense meant. 🤣
 
#20 ·
Recommending someone who's not duly licensed is one thing getting paid for it is even worse.

You getting paid from him makes you a partner by default.


Mike.
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