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Why You Shouldn’t Rent Your Contractors License

November 21, 2019

Cecilia De La Rosa

Cecilia De La Rosa

If you’ve been approached to rent your contracting license to a company that doesn’t have one, you should think hard before doing it. If someone solicits you to rent them your license, your first question should be, is it legal? The answer: No, it’s not! In most states, you must have direct control and supervision of your employee’s principal construction operations, or you risk facing disciplinary and potentially criminal chargers; not to mention the affect this can have on your Workers Comp and General Liability insurance.

What are the Ways Someone Can Rent a Contracting License?

There are two primary ways that a contracting license can be rented. The first is obvious. Someone pays you a fee to use your license for their projects. The second is that you agree to pull permits and then allow the unlicensed company to do the work.

Why Is It Illegal to Rent Your License?

Construction projects must be completed by licensed contracting professionals to ensure that structures are built and maintained properly. Unlicensed work puts homeowners and commercial property owners at risk for low-quality workmanship including defects, code violations, and endangering health and safety. When you rent your license, you are assuming the liability for work completed. The company doing work under your license may not know what they are doing and they may perform substandard work. You can be held liable in a civil court for damages regardless of whether you knew or participated in their faulty work. In addition, your reputation will be affected and it may make it difficult to find work in the future.

Why is Licensing Important?

Getting a contractor’s license is important for a number of reasons:

  1. It proves you have the knowledge to need in your trade to do the job.
  2. You gain valuable training through ongoing education.
  3. It’s the law – if you do things right you don’t have to worry about fines or other legal recourse.

What Should You Do If You’re Solicited to Rent Your Contracting License?

If you are approached to rent your license or pull a permit for a job that was started by an unlicensed contractor, you have two legal options:

  1. Decline. Go through the process of becoming the qualifying agent for the unlicensed contractor before pulling the permit and make sure you supervise their work,
  2. Have the owner cancel his contract with the unlicensed contractor and contract with you in his place – do not allow the unlicensed contractor to perform work under your permit.

If you rent your license or rent a license from someone else, bad things will happen. The law is in place to protect both the contractor and the customer by ensuring that work is done the right way. Cutting corners or not knowing the trade well enough to pass an exam for a license proves that one shouldn’t be doing the work until they are qualified to. By taking the right steps, you can ensure a long successful business career and many happy customers who can trust your work is worth paying for.

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