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Why Is a License Important?

All states require some form of licensing with regard to building contractors. These laws have been passed to protect property owners from incompetent or dishonest contractors. The licensing process tests for basic competency and most licensing programs have some way of screening out dishonest contractors. A valid license is the first indication that your contractor might be qualified to do the job.

Another reason to use a licensed contractor is that some states have dispute resolution programs, and sometimes even funds, to help resolve disputes and compensate property owners. You will want to take full advantage of such a program by making sure your contractor has a current license for all the work he or she proposes to do.

State Requirements for Licensing

States license contractors and each state has its own licensing board with its own requirements. to find out about your state's program. State laws differ on both the requirements for getting a license and the type of license that is needed for a particular job, so make sure you know your state's requirements.

Licenses for General Contractors

There are several kinds of licenses required for different aspects of construction projects. The person who deals directly with you as the property owner is the general contractor. This person works with you, oversees the project, purchases many of the materials needed, and hires subcontractors (contractors who work for the general contractor and not directly for you). There are licenses for general contractors, but that license doesn't authorize the general contractor to do all the jobs in the construction project. Make sure you know what a general contractor's license covers in your state.

Other Licenses

Most states offer a variety of special contractor licenses to cover specific jobs. To obtain a special license a contractor will have to show competency in a specific area, like electrical work, roofing, plumbing, and so on. If a general contractor doesn't have the necessary special license to do part of a project, he or she has to hire a subcontractor who does have the special license to perform the work.

You should stay as informed as possible about all aspects of your construction project and keep on eye on the project without getting in the way. Mistakes that are caught early are much less expensive to fix. It will be worthwhile to keep an eye on licensing too. You can easily check to make sure that all the contractors working on your project have the licenses your state requires.

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