Residential construction is booming, with spending on construction peaking at more than $750 billion in 2021. While millions of these projects are being led by licensed general contractors, plenty of residential and commercial construction jobs are being completed by workers doing construction without a license.
Skilled home DIY builders, tradesmen with licenses in other areas, retired construction managers, handymen, and entrepreneurs just getting started may have a solid grasp of building and renovations without the official piece of paper. The question is, how much work can you do without a contractor license?
About 37% of homeowners did a DIY remodel project last year instead of hiring a professional. Homeowners with some extra time and strong building skills may be able to tackle several different renovation projects in their houses. They may choose the DIY route if they enjoy doing handiwork or if hiring a general contractor is too expensive.
Costs for remodeling projects have gone up in recent months due to rising expenses for materials and worker shortages across all industries. The shortage may also have some construction teams stretched thin and putting more responsibilities on workers who aren’t licensed.
Disclaimer: This article is not legal advice. You should consult your local building regulations and a qualified attorney for legal advice.
Projects That Don’t Require a License
Besides working on your own home, there are other jobs that professional subcontractors or handymen can take on without an official contractor license. While each state or local jurisdiction makes its regulations regarding contractor licensing, here are some common tasks that may not require a general contractor’s license to complete:
- Demolition – Homeowners or commercial property owners who need assistance with demoing their property for a big remodel may be able to hire an unlicensed contractor to knock down walls or pull out cabinets and flooring.
- Window Treatments – Installing blinds, shades, and window treatments can be challenging and time-consuming for the average homeowner. These jobs may also not require a license.
- Carpet – Pulling out old carpet and installing new carpet may also not require a license, depending on the location’s regulations.
- Wall-Mounted Televisions – Mounting HD televisions to drywall is another task that lots of homeowners and commercial property owners may not want to take on themselves. Contractors and handymen without a license may be able to complete this job.
- Trash Cleanup – Residential and commercial customers can also hire any type of crew, even those without a license, to assist in junk hauling and trash cleanup.
- Smaller Jobs – Some states limit remodeling work for those without a license based on the job’s cost. For example, jobs that are less than $5,000 or some other dollar amount may be available to workers without a license.
How Much Work Can You Do Without a Contractor License?
Many subcontractors without a license find success in specializing in one of the jobs above. It’s common to see subs that only paint or install carpet. However, if you are seeking to be more of a generalist who does a variety of jobs, that is certainly doable as well.
Handymen, laborers, contractors, and construction business entrepreneurs can focus on smaller jobs that may not require a license to build up a body of work. Taking on a larger volume of these smaller jobs may make sense, at least for short-term success.
With a hot real estate market and lots of people aiming to buy or sell their homes, there may be a high demand for skilled contractors, even those doing construction without a license. Sellers looking to take advantage of market conditions and put their property on the market quickly may be ready to hire skilled workers who are unlicensed to help with smaller jobs.
Recommended: Do I Need a Contractor License to Build My Own Home?
Recent buyers may also want to make some small adjustments to a new property right after moving in. These new homeowners may need a handyman to help them tackle their long list of tasks on their to-do list while they are busy decorating and setting up the house. Additionally, homeowners in existing homes that have no plans to sell or move may also need assistance with short-term projects that an unlicensed contractor can complete.
Given the many types of projects an unlicensed contractor or handyman can usually do, there is plenty of work to go around. Exactly how much you can do may depend more on local market conditions and regulations.
Problems With Doing Work Without a License
Contractors who only focus on handyman services or DIY construction enthusiasts who do work on their own properties may be able to stay busy, but for those who want to branch out, there may be some problems. Many states restrict work for someone who is an unlicensed contractor.
How much work can you do without a contractor license might not be the right question to ask, however. Instead, what are the problems with doing work without a license?
Doing remodeling work on a residence or business without a license may carry different penalties depending on the location of the job.
- In many cases, doing construction without a license is illegal.
- Some states will charge the contractor with a criminal misdemeanor. Additionally, there may be fines assessed, from $500 to several thousand dollars, depending on the location.
- Contractors should always check their state’s regulations before booking a job for a residential or commercial customer.
State Licensing Requirements
Most of the states require general contractors to be licensed in some capacity at the state level. Part of the country doesn’t require state-specific licenses, but individual counties or cities may have regulations governing general contractor licensing.
States and locations that require a general contracting license may also mandate contractors acquire commercial insurance before performing work. Licensing requirements may also detail how much work you can do without a contractor license before being subject to regulations.
For example, Connecticut doesn’t require a state-issued general contracting license, but construction professionals must register with their Department of Consumer Protection before doing work for customers. In Idaho, pros must register with the state contracting board, and Iowa requires workers who perform more than $2,000 worth of work a year to register with the Division of Labor.
There may also be a requirement that a construction business provides proof of workman’s compensation insurance. For an unlicensed contractor, this may be a lot of extra paperwork and cost.
Contractor License Essentials
Contractors who decide to go for a general contractor’s license have to abide by their location’s rules when submitting an application. In many cases, contractors have to pass one or more exams before getting their license. These exams may test knowledge about safety, trade, business practices, and the laws related to home improvement and consumer protection.
A contractor may then also have to show proof of experience working in the industry. Some states mandate two or more years of professional experience in construction before issuing a general contractor’s license. There may also be a requirement of holding a four-year degree or having equivalent experience.
General contractors trying to get a license may also have to submit financial details to the licensing board for consideration. The board may want to see income, cash flow, expenses, and other details from the business side of a contractor’s work before allowing the license to be issued.
Why Get a General Contractor License?
If you work in the construction field, you have to follow the rules for how much work you can do without a contractor license. The alternative to limiting your work and risking potential penalties if you inadvertently break the rules is to get a general contractor license.
Some contractors struggle with meeting the strict licensing requirements, especially if they are just starting out in their careers. Contractors relatively new to the industry may have to start with smaller jobs for an unlicensed contractor for a few years until they get more experience.
Getting that license can help contractors avoid making any professional missteps. A valid license may also help a professional contractor avoid paying hefty fines or being charged criminally for doing construction without a license. Such legal actions against a budding entrepreneur or a seasoned handyman veteran may cause serious setbacks for a construction or remodeling business.
Get More Work
Contractors with a valid license have the opportunity to book more and bigger jobs instead of limiting themselves to small tasks. Numerous regions dictate limits on the cost of jobs a contractor can do without a license.
Licensed contractors have a lot more flexibility with the jobs they can take on. With the demand increasing for skilled contractors, a general contractor can provide more services to residential and commercial customers. General contractors are ideal for big renovation jobs that need a supervisor and additional workers or subcontractors to complete the daily tasks.
General contractors must also be well-versed in pulling permits and completing work to the local building code, so homeowners and commercial property owners will look to a business to have that expertise and experience. Jobs that need a permit may be plumbing installations and additions, electrical work, home additions, kitchen remodels, or other major structural changes to a property.
Expand Your Business
Contracting companies and handyman businesses can also expand their offerings significantly once there is a general contracting license on file. Contractors may be able to start offering certain types of remodeling packages, such as aging-in-place renovations for seniors. The contracting company can focus on design and engineering aspects while hiring subcontractors to complete some parts of the work.
Depending on the type of license and the state, a general contracting company may also start to appeal to more high-end customers and custom-build projects.
There could also be opportunities to partner with national new home building companies that need local contractors to provide build-outs, renovations, and service to new homeowners.
Busy contractors may also feel more comfortable recommending other businesses with a general contracting license to potential customers if they can’t take on a new project.
Higher-end customers, more work, and partnerships may also equal more profitability. Knowing how much work you can do without a contractor license means adding up dozens of small-time jobs to pay the bills when working as an industry pro.
Projects for an unlicensed contractor may have a smaller profit margin when time, transportation, and materials are all calculated into the final bill amount.
The more profitable projects may be solely for skilled, licensed contractors. These contractors may not have the time or the patience to deal with tiny handyman projects and only book jobs that have a high-profit margin.
Contractors with a strong reputation, business insurance, and a valid general contractor’s license can also charge higher rates and not have to worry as much about homeowners and commercial property customers shopping around.
Having a general contractor’s license may give a construction entrepreneur a brighter future.
Build More Trust With Consumers
Companies that are licensed general contractors tend to have an easier time building their reputations in the industry. In turn, they can take on larger, more complex jobs, such as adding a second story addition, building a garage, or even building a complete custom home.
Property owners want to trust that their contractor has put in the time and effort to get licensed, and they don’t want to feel like they may be scammed by a contractor without a license.
Customers may also have less recourse if they book their job with an individual doing construction without a license. Unfortunately, there are several home improvement scams around that target customers looking for contractors.
Shoddy work from either a scam or someone who is an unlicensed worker may be risky for homeowners. They may have to front their own money for repairs and fixes to things that are unsafe or not built to code.
Develop More Skills
Getting a general contractor’s license may also push your professional limits to the next level. Professionally-licensed contractors have to meet high standards in their practices, construction skills, knowledge, and business understanding.
Contractors who want to get a license may look to develop further skills in certain aspects of building, such as HVAC work or electrical wiring components, so that they are more well-rounded professionals.
Many places also hold licensed professional contractors accountable to a specific set of standards. This could help workers strive to do their best work, fine-tune their talents and invest in more training to be even more skilled and successful. All in all, getting a professional contractor’s license may make sense in most situations, especially if someone wants to increase their earning potential and success in the industry.
Contractors often wonder, “How much work can you do without a contractor license?” The answer depends on your location and the type of work you feel comfortable performing. In most situations, the list of projects for an unlicensed handyman is short relative to what you can do with a license. In contrast, licensed contractors have more opportunities for work and success.
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