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Akamai Money | Business

Cut home construction risk with a licensed contractor


Question: How should I go about choosing a good contractor?

Answer: Interview a contractor as you would a potential employee. Ask for credentials, license, bonding capacity, insurance company and referrals from past clients; visit projects under construction; and check the complaints history with the Better Business Bureau and Department of Consumer Affairs. For more information, go to­contractor/checklist.pdf.

Q: Why should I hire a licensed contractor?

A: Your home is one of the largest investments you make in a lifetime. By using a licensed contractor, you have access to the Contractor Recovery Fund should the contractor go bankrupt during construction, or to correct work that does not conform to your contract. It is your responsibility to understand what you are buying, and the written contract should state how you want the work done and what your expectations are of your contractor. These are stated in the general conditions of the contract. For more information, go to

Q: Is it OK to hire an unlicensed contractor that is less expensive for a residential renovation project if my budget is tight?

A: When you hire an unlicensed contractor, do you know whether the work is being done to the building code or being done to generally accepted practices? You become the contractor of record under state law, and you are responsible for compliance to building codes and regulations. As the contractor, you are also liable to all the risks of a licensed contractor should someone get hurt on the job site. How much are you willing to risk?

Q: What could happen if I hire someone who is unlicensed to work on my house?

A: In my 40 years of experience as a general contractor, the most tragic case was when a home was destroyed by fire due to an outlet that was installed in the garage for an old refrigerator by a friend of the owner. The insurance company denied coverage, and the owner was left with more than $300,000 in damage and an existing mortgage.

Q: How do I find out whether a company is licensed?

A: Call the Department of Commerce and Consumer Affairs at 587-3295 or 587-3222 with the name of the company or the name of the person.

You might also check at these websites:

>>; look under RICO Consumer Resource Center


Q: If I hire a licensed company, can I assume all the employees who do the work are licensed?

A: No, because workers are skilled in the crafts and unless they themselves are contractors, they are not required to hold a license. Plumbers and electricians are licensed trades workers at each level of work, but that does not mean that they are licensed contractors. There are 168 types of specialty contractors and two types of general contractors. This website lists all the types of licenses that are required for contractors to do that type of work:

Q: Is a licensed general contractor allowed to send unlicensed subcontractors to a job?

A: No, because the contractor can lose his or her license, and that practice is aiding and abetting unlicensed activity.

Q: What agency governs contractors?

A: The Department of Commerce and Consumer Affairs and the Contractor License Board. Chapter 444 of the Hawaii Revised Statutes is the law that governs contractors. Visit or contact Verna Oda, executive officer at the Professional and Vocational Licensing Board, at 586-3000 or 586-2700.

Q: If I’m unhappy about the work of a contractor, what can be done?

A: First, read your contract. Does it say how the contractor is going to do the work? Does the contract identify the materials that are going to be used and the quality of work that is to be performed? Does the work meet the accepted standard for this type of work? Are your expectations stated in the contract? If you answered yes to these questions, then file your complaint with the RICO (Regulated Industries Complaints Office) and the Contractor’s License Board. Contact information is included below:

>> RICO Consumer Resource Center: 587-3295 or 587-3222

Q: Can I get my money back if a contractor did a shoddy job?

A: If the work is deemed defective and you have used a licensed contractor, the Contractor Recovery Fund is available if anything goes wrong with your project.


Interviewed by Kristen Consillio,

Editor’s note: “Akamai Money” seeks out local experts to answer questions about business in Hawaii. If you have an issue you would like us to tackle, please email it to and put “Akamai Money” in the subject line.

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