Contractors w/o a GC license, is this normal?

8 Replies

All,

I'm investing in a market outside of my own and have a couple of properties I need rehabbed.  I found a couple of contractors who came with very good references but after digging a bit, I find out neither of them has a GC license.  Both are working under someone else's GC license.  I'd love to hear from other investors if this is normal or if it's a huge red flag.  Would love to hear from GC's as well who do this type of work with those who don't have that license.

Thanks in advance

Do not use them.  Getting a contractors license is generally pretty easy.  If they can't take the time to get their own, they are not worth your time.  

Originally posted by @Mauricio Quintana :

All,

I'm investing in a market outside of my own and have a couple of properties I need rehabbed.  I found a couple of contractors who came with very good references but after digging a bit, I find out neither of them has a GC license.  Both are working under someone else's GC license.  I'd love to hear from other investors if this is normal or if it's a huge red flag.  Would love to hear from GC's as well who do this type of work with those who don't have that license.

Thanks in advance

Houston doesn't require a GC license. It is a job by job basis. If they can pull a permit in their name the city of Houston considers them valid. Texas the state has no requirements for a GC license. Everywhere online tells you not to hire an unlicensed contractor but in Texas most aren't really licensed. 

So, if they can pull a valid permit they are considered GC's in the eyes of Houston. They will need some sort of bond to pull one probably. 5-15k bond. Some cities require a license like my city but all that takes is 25 dollars and a 5000 dollar bond. Anyone can get one. 

Look at their work and get references. If they are proud of what they do they will be happy to show you what they can do. Quick answers to simple questions are a must. Otherwise they may not know what they are talking about. Depending on the job, it shouldn't take 2 weeks to get you a price. They should know in a coupla days in most cases. If they don't call you back within 8 hours (without a valid excuse) they will do the same on your job. 

Best of luck. 

 

Don't rely on BBB as you can just start a business and pay for your A+ rating w/out proving you know what you are doing.

Make sure they are insured, BUT and in my view more important, make sure they have workers comp OR you make them sign a wavier. (a broken ankle by a trade could make you liable. Gen liability doesn't cover workers comp issues and if they are hurt on your property then you could be liable.)

References are good, oversight is vital. 

I will say this- if they have no accreditation (i.e. inspector, LEED, etc) then I would likely pass as a newbie in the area. i.e. if they did nothing to educate themselves in a way they can prove then they have made no efforts to be an expert. You want an expert.

I do real property analysis and consult for investors in Houston and the best advice I give them is this- The more YOU know, the less likely someone can steer you wrong.

Feel free to ask anything you want here and I will do my best to give you whatever information I can.

Depending on where it is (you should tell us the state) the license could be hard to get so you have to pay someone a cut to use their license or they could be hacks that can't be bothered to pass the test and get it. In one state I would say it isn't a big deal and in another state I would say it is a giant red flag. What is the work that needs to be done? 

I WISH TX would allow you to get licensed as a GC, even if they didn't require it. Being a pro at what you do SUCKS when anyone can claim they have the same skill set w/out having any way to prove it.
There used to be a GC registry for TX but it was disbanded years ago. There is no way to prove you are a professional in TX. Its a HUGE reason why so many bash "contractors" here.  They are hiring a handy-man who claims to be a GC, because he gave the cheapest bid, and then they get taken and blame GC's. Its frustrating, but you can find a pro IF you are willing to do the work of building a relationship instead of just looking for who is willing to make the least amount of money working on your projects.

We work under a GC's license doing tons of remodels. We use our own liability insurance. We do not need to be licensed to paint, do flooring, drywall or lots of other things. We do use a licensed plumber, electrician, roofer, etc. for items that the city or county require a license for. We also have the GC pull permits and the other licensed contractors will add their names to the permit. It is all legitimate, legal and ethical.


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