“Why is there such a big difference in prices?”

In the construction business, we hear that question alot.  Tried and true advice to homeowners is to get three bids on a home improvement project, but are all bids created equally?  The answer is a resounding “no”.  More appropriate advice should be for a homeowner to request three “qualified bids”, and there is a big difference.

In California, a “Contractor” is defined as an individual or company that undertakes improvement/repair on a structure worth over $500.  These days, $500 doesn’t go very far, and one would venture a guess that almost all home improvement projects surpass this threshold.  State law further defines that a Contractor must hold an active license issued by the Contractors State License Board in the ‘class’ that contractor operates.  The licensing process requires that the contractor pass examinations in both his/her trade as well as business law.  The contractor must also meet specific financial requirements and secure a ‘contractor bond’.

In comparing bids, it is important to verify a contractor’s license for authenticity, status and appropriate class.  All to often, unsuspecting homeowners receive bids from .’contractors’ who are using another individual’s license, are unlicensed entirely, or are working outside of their class (e.g. a plumber completing a carpentry job).  In addition, any contractor who has employees is legally required to carry worker’s compensation insurance.

Companies and individuals who violate these laws are frequently able to present bids which are significantly lower than those of legitimate contractors.  Not only is the person/company breaking state law, but they are also placing the homeowner in a position of liability for employee injury and/or property damage that may occur.

When comparing project bids, be sure to compare quality, competency, experience and legal compliance.  A bid that appears to be a ‘great deal’, may in fact be filled with cut corners and legal defects.

For more information, please visit: cslb.ca.gov