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Selecting A Contractor

It’s an important decision. when deciding to have someone do work on your home.  In an urban area, there many different types of contractors.  Here are a few pieces of advice and some good information about the types of contractors and how to protect yourself.

Price Points of Labor

There are numerous options when hiring someone to do construction work at your home. These options include everything from the neighbor’s kid to a multi-million dollar corporation. It’s important to know the differences when making your decision. While the best way to divide them is by quality of work, the simplest way to divide the different types is by how much they charge. Some people in each category may try to charge more than is normal for their type of business, but will rarely be able to charge less without losing money or cutting corners on quality.

There are 4 general price ranges:

$10-25/hr.  Day-laborers. 

The neighbor’s kid, the guys in front of the hardware store, and other helpers that you pick up, drop off, and buy lunch for them. Usually don’t have their own tools, or have very few.  Can be a good deal, if you find the right ones. The wrong ones may cost you a lot of money. You still have to pay them, no matter the quality of work.


$35-75/hr.  Unlicensed Contractors. 


Many of the people on Craigslist and Nextdoor and some of the smaller construction companies. They have their own tools and may even look like a professional construction company. Most don’t offer a warranty, but if they do, I wouldn’t count on them returning to fix anything. Many claim to be licensed and insured, because they know you will never check. If they admit they are not licensed, then there may be some low risk work they could do for you, like interior painting or landscaping. If they claim to be licensed and aren’t, then you probably don’t want to hire them. If they are going to start with a lie, then they aren’t the type of person you want in your home. 


$65-135/hr.  Some Licensed Contractors. 


Many construction contractors are smaller companies, with lower overhead than the bigger companies. Many offer great work, for a fair price, with a warranty. Since they are smaller companies, it may be days or weeks before they can fit you in, so plan ahead. Beware of construction companies that use subcontractors.


$99-175+/hr.  Larger Licensed Contractors and Some Specialty Contractors. 


Usually charge the highest rates. They have many employees/subcontractors, so they can usually have someone out to your house within a day. More likely to offer 24-hr emergency services, too. Beware of construction companies that use subcontractors.

Construction Licensing in South Carolina

Every state has their own laws governing construction work, and usually more specifically governing work on a residence. These laws are made to protect homeowners and the community from bad quality work and scams. In South Carolina, a Contractor’s License is required for anyone bidding on jobs in excess of $500. To check a contractors licensing, visit and click on License Lookup – 

There are several different classes of contractor licenses:


General or Mechanical License: Covers work in commercial, industrial, or residential. Several specialties. More information can be found at -


Residential Specialty Trade License: Covers work in either Electrical, Plumbing, or HVAC performed on a residence. Requires a $10,000 surety bond.


Residential Specialty Contractor: Covers work in 3 of the 10 specialties, stated on the license. If doing projects over $5000, then a $5000 surety bond is required.


Residential Builder License: Covers all residential work, including Electrical, Plumbing, and HVAC. $15,000 surety bond is required.



In addition, each county requires a Business License for a business located in it and any business doing more than $20,000-25,000 (depending on the county) per year in business in the county.

Problems With an Unlicensed Contractor

The choice between hiring a licensed or unlicensed contractor can be a tough one.  Every one wants to save money and that lower bid from the unlicensed contractor can seem pretty tempting. But is it really a good deal? Considering the risks you will assume and the lack of guarantees, even paying half the cost of a licensed contractor isn’t a good deal. If anything goes wrong or they don’t finish something, then you don’t have much recourse. 


Call the police?  Unless they took your money over a month ago and haven’t done any work or contacted you, then you will be told it is a civil matter – they can’t do anything.  They could even charge you with a misdemeanor for hiring an unlicensed contractor, which is illegal in South Carolina.


Contact the government?  If the contractor was licensed, then you could file a complaint with the licensed board. The contractor could face fines, disciplinary action, and/or loss of their license. If the contractor wasn’t licensed, then there is nothing they can do for you.


Sue them?  Try spending a lot of time and money to get a judgment which you can’t collect on, because what little they do own is protected by Homestead Exemptions.


Contact your Homeowner’s Insurance Company?  Some would think that their Homeowner’s Insurance Company would help. Better read that policy – it’s much worse than you think! Not only are they not going to help with recouping your loses or paying for any repairs, they may cancel you and refuse to cover you until you can verify the repairs are completely properly, by a licensed contractor. **


Threaten them?   Probably what you want to do after finding there is nothing else you can do, but resist the urge – it won’t help either.



** Even worse, many Homeowner’s Insurance Policies won’t cover it if anyone gets hurts during or because of work by an unlicensed contractor. If anyone, even the unlicensed contractor, seriously injures themselves the courts usually rule that the homeowner is responsible for injuries on their property. Since the Homeowner’s Insurance Company doesn’t have to pay, it comes out of your pocket. 

Verify Your Contractor

When dealing with a Construction Contractor, always make sure you verify any information they give you. There are so many people in this area who claim to be licensed and insured, but aren’t. They know no one ever checks and it saves them thousands of dollars per year.


There are 4 things you should do to verify each contractor:


1.  Ask for the full legal name of their business.  Unless they are using a Trade Name different from their legal name, this should be EXACTLY the same as is in their advertising, business cards, the name you write on the checks, etc. 


2.  Ask for their Contractors License #.  Even if they are using a trade name, then the Contractor’s License must be in an individual’s name. Usually the trade name is linked to it on the License Lookup website. Look it up on - . And no, they can’t legally use their buddy’s license.


3.  Ask for their General Liability Insurance information. At least the insurance company name, phone number, policy number, and coverage amounts. At a minimum, ask for a copy of the  Declarations page from their policy packet. Especially for any remodel or larger project, ask for a Certificate of Liability from their insurance company with you listed as an Additional Insured (so if a claim does happen you deal directly with the insurance company instead of going through the contractor). Then call the insurance company to verify they are currently covered. There are some people who pay for the first month, then stop paying and get cancelled, even though they have paperwork that shows they are covered the whole year.


4.  Ask for their Workman’s Compensation Insurance information (insurance company name and policy number). If a business has more than two employees, then the business must have a policy. Then look it up to ensure the policy is current -

The Contract

The final thing you can do to protect yourself is make sure a legal contract stating exactly what work will be performed is signed by both you and the contractor. The following are some of the provisions you should ask for in any home improvement contract:


1. Start Date and the estimated completion date


2. Total cost, plus the amounts and schedule for down payment and progress payments, based on milestones of completion.


3. Listing of specified materials and work to be performed


4. Contractor's name, address, license number, class of license, and classifications or specialty services


5. Cancellation rights of the parties.


6. A "plain-language" exculpatory clause concerning events beyond the control of the contractor and a statement explaining that delays caused by such events do not constitute abandonment and are not included in calculating time frames for payment or performance.

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