The New York City Department of Consumer Affairs (DCA) receives more complaints against home improvement contractors than any other category - Period. If you engage an unlicensed, unregistered contractor to carry out an improvement project in your co-op or condo, you may be courting disaster. Everything may go fine, but then again, it may not. What if, for example, your contractor simply disappears, leaving the apartment in disarray - walls torn apart, wiring and plumbing exposed, and other work undone? The damage to your own apartment or neighboring units can cost you hundreds, thousands or even hundreds of thousands of dollars.
Even worse, if you as a homeowner are wronged by an unlicensed contractor and then file a complaint with the DCA, you may discover that the Department's considerable powers are lessened because your contractor was illegal.
Many of these headaches can be avoided if co-op boards insist that only licensed contractors be hired for shareholders' improvement and renovation projects. If your contractor is properly licensed, and your complaint legitimate, the DCA can go to bat for you, reminding the contractor of his obligations under the law and achieving a settlement for you. If mediation is unsuccessful, or if the contractor is unresponsive, the DCA will send the case to one of its administrative law judges. The DCA might then have the power to suspend or revoke the contractor's license if he refuses to pay. In the rare instance when a licensed contractor goes out of business or skips town leaving behind a string of damages and outstanding consumer restitution, the DCA can reimburse consumers from its Home Improvement Contractor (HIC) Trust Fund that pays consumers 100 percent of the damages up to $15,000.
The DCA can and does accept complaints against unlicensed contractors, but in these cases, the Department's enforcement powers are reduced. Unlicensed contractors often fail to respond to mediation or show up for hearings. Even if an unlicensed contractor appears for a hearing, they often fail to pay damages, and the HIC trust fund - established as it is with fees from licensed contractors - can only be used to pay for damages caused by licensed contractors. At that point, unless DCA inspectors are lucky enough to catch the errant contractor working at another location (in which case the inspectors can seize the contractor's vehicle and tools), the only recourse left to you and the Department is to go to court.
With some diligence and advance planning, homeowners, building managers and co-op boards can protect themselves from the expense, frustration, and hassle of untangling an unlicensed contractor problem. The simplest defense begins with a phone call to the DCA hotline at (212) 487-4444 to check the license status and complaint history of a prospective contractor.