7 Reasons Why You Should Not Trust Unlicensed Excavating Contractors

a man in a hard hat and vest on a construction vehicle

The excavating industry, like many industries, has its share of fly-by-night unlicensed excavators. They come from nowhere, rent a bit of equipment, get a couple of jobs by undercutting prices, and vanish at the first sign of a disagreement. Maybe you’re planning to install a pool, level out your yard, or even lay the foundation for a new addition to your house and need work done. When screening potential contractors, its wildly important to make sure those people on your property have licenses and liability insurance in place.

Dirt Guys Excavating, a reputable excavating contractor serving Yamhill County, warns against the dangers of hiring unlicensed excavating contractors for your residential construction project.

In this article, we’ll explore seven compelling reasons why you should never trust unlicensed excavating contractors.

What are Unlicensed Excavation Contractors?

a construction vehicle with a shovel and a bucket

Unlicensed excavators are individuals or companies that offer excavation services without the proper licensing, qualifications, or insurance. They may present themselves as legitimate contractors, but they lack the necessary documentation and credentials to legally operate in the industry.

In Oregon the rules are clear in this regard: Anyone seeking to make money improving a property must have a contractor’s license. Oregon Contractor Requirements are here:

The risks of hiring such contractors include the potential for injury to workers or property due to negligence. These companies often do not carry the required insurance policies, leaving the property owner liable for any damages or injuries that may occur during the excavation process. This may include rework if your excavator doesn’t call 811 and file for the proper permits before moving dirt as seen here.

Furthermore, unlicensed contractors may not adhere to proper safety protocols or have the necessary training to handle complex excavation projects. This lack of expertise can result in subpar work, delays, and potential hazards on the job site.

When entering into a contract with an excavation contractor, it is crucial to verify their licensing and insurance status. Failure to do so can lead to legal and financial repercussions if issues arise during the course of the project or if any damages or injuries occur as a result of the contractor’s work.

Reasons Not To Trust Unlicensed Excavating Contractors

Man using an excavator for digging on day light without safety gear

1. Lack of Insurance Coverage

Unlicensed excavating contractors often operate without proper insurance coverage. This leaves property owners vulnerable to financial risks. Just like unlicensed electricians or air conditioning technicians, these contractors may not carry liability insurance to protect against accidents or property damage that occur during the project.

In many jurisdictions, operating as an unlicensed contractor is a misdemeanor offense under the law. These individuals may resort to false advertising or misleading claims to secure work, putting property owners at risk of subpar workmanship and potential legal liability down the line.

2. Poor Workmanship

Unlicensed excavating contractors often lack the necessary skills, knowledge, and experience to perform quality work that meets building codes and regulations. These contractors tend to cut corners, leading to shoddy workmanship that can compromise the safety and integrity of the property. Contractors may face legal liability for negligence, leading to a lawsuit.

Property owners who hire unlicensed excavating contractors have limited recourse if they are dissatisfied with the work or if the project fails to meet local building regulations. Filing a complaint with licensing authorities or pursuing legal action can be challenging, as these contractors operate outside the bounds of professional oversight and accountability.

Hiring an unlicensed excavating contractor for home improvement or renovation projects can lead to serious legal consequences. If the work violates building codes or causes damage to neighboring properties, the property owner may face lawsuits and be held liable for any resulting injury or damages.

In Oregon, hiring an unlicensed general contractor is considered a crime, and property owners can face fines or even jail time.

“Any person who knowingly uses the services of an unlicensed labor contractor shall be personally, jointly, and severally liable with the person acting as a labor contractor to the same extent and in the same manner as provided in ORS 658.453 (Civil penalty)

Additionally, unlicensed contractors are not bonded, meaning there is no financial protection for the property owner if the contractor fails to complete the work or does not pay subcontractors or suppliers.

4. No Recourse for Poor Work

When unlicensed excavating contractors perform low-quality work, property owners have little recourse to hold them accountable. Unlike licensed contractors, who are subject to regulatory oversight and can face disciplinary action for shoddy construction, unlicensed subcontractors and handymen operate outside these safeguards.

Seeking legal remedies against unlicensed contractors can be challenging, as they may not have the financial resources to compensate for damages or may simply disappear without a trace.

Furthermore, some jurisdictions may not allow property owners to file a lawsuit against unlicensed contractors, as the law views the hiring of such individuals as an illegal act on the part of the property owner, similar to tax evasion or performing unlicensed electrical work.

5. Safety Risks

Unlicensed excavating contractors often lack the necessary safety training and equipment to protect workers and property owners from potential hazards.

Without proper safety protocols in place, these contractors may put lives at risk by failing to shore up trenches, leading to cave-ins or collapses that can cause serious injury or fatalities on the job site, which could result in a breach of contract and legal action against the property owner’s real estate.

Also, unlicensed contractors may not carry workers’ compensation insurance, leaving injured workers without access to medical care or lost wage benefits. In the event of a serious accident, the property owner may be held liable for these costs, as their homeowner’s insurance policy may not cover damages caused by unlicensed contractors, and the contractor’s surety bond or warranty may be void.

The risks associated with hiring unlicensed excavating contractors can be summarized as follows:

Risk FactorPotential Consequences
Lack of Safety TrainingInjuries, Fatalities, Legal Liability
No Workers’ CompensationUninsured Medical Costs, Lost Wages
Voided Insurance PoliciesFinancial Responsibility for Damages
Breach of ContractLegal Action, Monetary Losses

6. Potential for Scams

Unlicensed excavating contractors may engage in scams and take advantage of unsuspecting property owners. These scams can include demanding upfront payments for work that is never completed or performing subpar work and then disappearing without a trace.

The potential consequences of falling victim to an unlicensed excavating contractor scam include:

Financial LossesUpfront payments for unfinished work, additional costs to repair subpar work
Legal ChallengesDifficulty recovering losses, limited recourse against unlicensed contractors
Emotional StressFrustration and anxiety dealing with the aftermath of a scam
Safety RisksSubpar work that may compromise the structural integrity of the property

To protect themselves from potential scams, property owners should always verify a contractor’s licensing status and references before agreeing to any work or paying any fees.

Consumers can also report suspected scams to their local consumer protection agency or state licensing board to help prevent others from falling victim to the same fraudulent activities.

7. Failure to Meet Building Codes

Unlicensed excavating contractors often lack the knowledge and expertise to ensure that their work complies with local building codes and regulations. This can lead to costly repairs and renovations down the line, as property owners may be required to bring the work up to code at their own expense. Despite efforts by homeowners, legal liability could still arise.

Failing to meet building codes can also result in fines and legal consequences for the property owner. In some cases, the property owner may be required to obtain permits retroactively or even demolish the non-compliant work, resulting in significant financial losses and delays in the project timeline.

The consequences of failing to meet building codes when working with unlicensed excavating contractors include:

  • Costly repairs and renovations to bring work up to code
  • Fines and legal consequences for the property owner
  • Retroactive permit requirements or demolition of non-compliant work
  • Significant financial losses and project delays
  • Potential safety hazards and structural integrity issues

To avoid these risks, property owners should always work with licensed and insured excavating contractors who have a proven track record of meeting building codes and regulations. While it may be tempting to save money by hiring an unlicensed contractor, the potential costs of non-compliant work far outweigh any short-term savings.

Before hiring an excavating contractor, property owners should request references and examples of past work, as well as proof of licensing and insurance. It may also be beneficial to consult with an architect or building inspector to ensure that the proposed work meets all necessary building codes and regulations.

Need help on your Excavating project? Call Dirt Guys.

An excavator loads soil or sand into a dump truck Pit development Earthworks with the help of heavy construction equipment

If you have any concerns about the success of your project, give us a call. We’ve been doing it for years, are well-trained to handle complex logistical projects, and are one of the top-rated excavating contractors in all of Yamhill County.

Give us a call to schedule your estimate or have a simple conversation over the phone at (503) 997-8412.

Frequently Asked Questions

Hiring an unlicensed excavator can get you in legal trouble. You might face fines or penalties from local authorities. If the work doesn't meet codes, you could be forced to redo it. In some cases, you could even be sued if someone gets hurt on your property due to the unlicensed work.

Building codes are rules that make sure construction is safe and up to standard. They cover things like how deep to dig or how to handle utilities. Licensed contractors know these codes. Unlicensed ones might not, leading to unsafe work that doesn't pass inspections. This can cause delays and extra costs.

Excavation can be dangerous. There's risk of cave-ins, hitting utility lines, or worker injury. Safety standards help prevent these problems. Licensed contractors are trained in safety rules. They know how to protect workers and your property. Unlicensed contractors might skip safety steps to save time or money.

Some unlicensed contractors are scammers. They might take your money and disappear, or do shoddy work and demand more money to fix it. They could also overcharge you or use cheap materials. Licensed contractors are registered and can be held accountable. It's harder for them to run scams.

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