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Question DetailsAsked on 4/25/2016

Contractors website, states that they are licensed, bonded and insured.

After asking for their bonding information, they state that they are not bonded and that usually no contracting company is. That may be the case, but part of the reason why we chose them is because it states that they are bonded and provides us protection. Considering the amount of issues we have been having with them, we are kind of stuck in a corner.

What legal rights do I have, can I contact the state to suspend their license for false advertising? What should I do about this?

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1 Answer


Check the state licensing board - Google for something like following (with your state name substituted) - contractor licensing board Iowa - to see if they are required by law to have bonding. Ditto for your town or county or call the local building or business license department on that requirement locally.

As for him saying most contractors are not bonded - numerically probably true, but that separates the men from the boys. I know I never "liked" paying thousands yuearly for licensing, insurance, bonding, etc - but that is what professional contractors do, and why they have an innate dislike or hatred for the firms that are "running bare" and able to underbid because they are not carrying that additional overhead - which can run 10-15% range on licensing/certification/bonding/insurance, and up to 50% or more if they are also running without Worker's Compensation insurance, depending on trade.

You can file a complaint either way (for not having required bonding or for falsely claiming to be bonded) with the state licensing board - in most states will not help you directly but might get him off the streets, though for that type of false advertising commonly just nets him a cease and desist letter.

Make a printout and do a webpage archive showing his ads/website claim that he is bonded and a telecon on him saying he is not bonded - you can then provide that (if you want) to the local district attorney or state (or federal if interstate opeation) consumer protection agency to pursue - though again that does not help you directly.

Does he have liability insurance ? If so, you could (likely to require a contracts attorney, which Al does not have a category for) to file a claim against his insurance company for your losses due to his fraud.

Since it sounds like you are in the middle of a hassle with him, you would have to decide if you want to dump him for fraud, paying him only for satisfactorily completed work, then hire another contractor to finish the job - or just put pressure on him to finish up (which is not likely to be great workmanship once you pressure him). Pretty much likely to need an attorney for that unless small $ amount at risk, in which case you can go small claims court. Since he is likely not worth much and collecting could be a real hassle, would probably require suing him AND his insurance company to have a chance to recover - though adding insurance company as a defendant means they will certainly bring in an attorney, which puts you at a disadvantage in small claims court.

Course, the learning lesson here - make sure BEFORE contract signing time (usually JUST before) that you have verification (through licensing agencies) of his business/ contractor/ professional licenses as applicable, and VERIFIED certificates of bonding, liability insurance, worker's comp insurance, etc before signing the contract.

Answered 4 years ago by LCD

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