Unlicensed contractors can now take on projects up to $40K

5 On Your Side has been warning you for years that construction projects over $30,000 have to be done by a licensed contractor. However, that changed on Oct. 1 when HB 488 became law.

Now, the threshold is $40,000.

That allows unlicensed contractors to take on bigger projects. It also means that homeowners need to be even more diligent about knowing who you hire for a remodeling project.

5 On Your Side spoke with Frank Wiesner, director of the North Carolina Licensing Board for General Contractors. He sees

cases of people losing money to unlicensed contractors all the time.

"Unfortunately, the people who lose money are the ones that can least afford to lose the money," Wiesner told 5 On Your Side.

One of the most recent examples involved a retired school teacher renovating her dream kitchen.

"The contractor started work, demoed the kitchen, hauled everything out," Wiesner said. "She gave him the deposit he was requiring, which payed him in full for the project. That’s the last time she ever saw him."

The project had barely begun, but the contractor collected the entire $25,000 cost of the project and ran.

"We couldn’t investigate. She wasn’t eligible for the Homeowners Recovery Fund. She was at a dead end from a standpoint of protection of the law," Wiesner said.

The board didn’t have standing to get involved because the contractor wasn’t licensed and wasn’t required to be because the project was under $30,000.

It’s a cautionary tale of what can happen when a project with an unlicensed contractor goes wrong.

Now the requirement for a contractor to have a license has increased to projects costing over $40,000, meaning homeowners can hire unlicensed contractors for bigger projects, putting larger amounts of money on the line.

"The consumer needs to be protecting themselves the best they can," Wiesner warned.

However, that that does not mean avoid all unlicensed contractors.

"There are some unlicensed contractors in the state who choose to be unlicensed who do fantastic work," Wiesner said. "I know some of those and I would have no qualms of those unlicensed guys coming in and doing work on my own home, provided it was under the license threshold."

Licensed contractors do come with more assurances. The board knows their address, they’ve gone through a criminal background check, they’ve proven they’re financially stable and renew their license every year.

"When you wrap all of that up, it’s geared towards making the profession more professional and providing a level of protection for the consumer," Wiesner explained.

If you’re not sure about a contractor, call the licensing board to get more information at 919-571-4183.