Unlicensed or Underlicensed Contractors

Steps to Avoid!! Most homebuilders and home improvement contractors are skilled and responsible individuals. However, over the years, this Firm has represented clients who have been targeted by incompetent and/or unethical contractors.

The Virginia State Board of Contractors, a part of the Virginia Department of Professional and Occupational Regulations, administers a licensure system for any contractor who contracts to do work or any improvements to real estate. Therefore, any contractor, including any subcontractor, in Virginia, whether remodeling a house, landscaping a yard, or building an office building, is required to have an adequate contractor’s license issued by the Virginia State Board of Contractors. A license is required, regardless of the size of the job.

There are three types of contractor’s licenses. Each license represents a specific level of skill, competency, and financial backing. The Class A license entitles the holder to contract any improvement to real estate without limitation as to a single project’s cost. The Class B license entitles the holder to contract any single improvement to real estate up to a cost of $70,000. The Class C license limits a single project to $7,500. The foregoing requirements apply to the performance, construction, removal, repair, and/or improvements to real estate. For example, the law can not be evaded by a Class B contractor, who breaks up a home construction contract for $280,000 into four separate contracts of $70,000 each.

Some tips to remember! First call the State Board of Contractors at 804/367-8511 to make sure that your contractor currently possesses a valid and appropriate license. Require that your contract includes the following provisions: (1) that the contractor has the adequate license to perform the job; (2) that you are relying on the representation in the contract that the contractor has an adequate contractor’s license as material to your entering into the contract; and (3) require a copy of the contractor’s license be attached to the contract as an integral part of the contract documents. Such contract safeguards will provide the homeowner an opportunity to seek damages for fraud and deceit as well as breach of contract. A cause or action for fraud and deceit, if successful, can provide the homeowner with a creditor’s advantage in the event of a contractor’s bankruptcy and can be the basis for application to the State Board of Contractor’s Transaction Recovery Fund.

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