Why a Licensed Contractor Matters

A licensed general contractor brings protection and accountability to your project.

general contractor license

As with all things New York City, licensing and permit requirements are an unavoidable aspect of home renovation. While there are many contractors out there offering enticingly low bids with the promise of no paperwork, it’s in a homeowner’s best interest to sign on with a licensed contractor. Read on for the top reasons why this is always the way to go.

A Home Improvement Contractor License is a legal requirement for all contractors.

NYC’s Department of Consumer Affairs (DCA) requires that any person or business that performs residential construction, repair, or remodeling worth more than $200 must have a Home Improvement Contractor (HIC) license, even for work on things like basements, driveways, fences, landscaping, patios, sidewalks, and pools. The City has authority to fine unlicensed businesses, resolve outstanding complaints, and take possession of vehicles from unlicensed home improvement businesses, as well as require them to begin the licensing process before their vehicles are released back.

It’s a free protection and an added layer of accountability.  

A holder of an HIC license has been fingerprinted and undergone a criminal history check, passed a written exam, paid a license fee, and contributed $200 to a fund that compensates consumers if they damage property, go out of business or leave town. If you hire a licensed contractor, the DCA can act on your behalf and you can have access to the city’s restitution fund if anything goes awry. So while the HIC license is not an indicator of quality, it is a good first step in ensuring that you will be working with a business that is officially on the books.

You’ll be saving money in the long run.

The main reason that renovators are tempted to go with unlicensed contractors is that they generally offer lower estimates. In your quest to save money, however, you may end up spending more. This is because an unlicensed contractor will not be able to obtain proper permits for the project, and you will be responsible for the cost of repairs if the work does not meet building codes. This is especially important when you go to sell. Furthermore, allowing an unlicensed contractor to work on your property could void your homeowner insurance policy. Lastly, if the contractor does not have workers’ compensation insurance, as the de facto employer, you are responsible for any accidents that occur while workers are on the job. In the end, the potential to overrun your budget is much higher if you work with an unlicensed contractor.

Here is the good news: Sweeten does this part of the job for you. All the contractors in our network are properly licensed with the Department of Consumer Affairs, so that’s one thing you won’t have to worry about if you are matched through Sweeten.

TIP: How to check for your contractor’s license

To ensure that your prospective contractor is licensed, check on the DCA’s website. You may need to search a few different keywords (for example, just the first name, or last name, or a keyword from the company’s name), rather than the owner’s full name or the company’s official business name.

If your search indicates that a contractor’s HIC license is expired, note that your contractor may have submitted renewal forms for the license which are still being processed by the City. It’s also possible that your contractor is sub-contracting work to someone who does have this license. In addition, note that architects and designers are required to have other licenses and are not required to have an HIC license unless they are performing the construction, repair, or remodeling work. You should ask your contractor for their HIC license and check back again here to make sure it is active before work begins. For additional information on how the city regulates home improvement contractors, take a look at its handy guide for consumers.

Finding a contractor who is licensed is an important first step in determining who to work with. Learn about the steps that follow in our post General Contractor 101: How to Find One and What to Expect so you can renovate with confidence.

Sweeten handpicks the best general contractors to match each project’s location, budget, scope, and style. Follow the blog for renovation ideas and inspiration and when you’re ready to renovate, start your renovation on Sweeten.

  • Nicky

    I don’t get the difference between DCA and DOB??

  • Keith at Knockout Renovation

    The Dept.of Buildings handles many things building related like construction and permits while the Dept. of Consumer Affairs handles licensing for companies of a wide variety like daycares, hair salons and contractors.

    Hope that helps!

  • Dizzy

    I entered a contract with a licensed, bonded and insured general contractor in NY for residential work back in 2012. Since the inception of the contract he has dragged the job out and allowed the plumbing permits and GC permits to expire. I had to contract a plumber (and pay him again) with amendments to plans since. I just found out via this web site, that the contractor is no longer “legit” (his license is expired months ago). Whilst his license was expired (of which he failed to notify me), he had workers in my home working (granted they sporadically showed up, and I had to badger the contractor to send them to try and complete the work). The question is, does his now lack of license make our 2012 contract (which when signed he was licensed) null and void? If not, how do I get out of the contract?

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