Kia Ricchi- Contracting Confidential-Understanding the "Business" of Construction
Contracting Confidential -Understanding the Business of Construction
"If you think professionals are expensive, try hiring an amateur"- Red Adair
Credential Conundrum"Licensed, bonded, and insured" is a term used loosely in the construction industry. In regard to licensing, there are many kinds of licenses and often a single professional will have several licenses-each with a specific purpose. Sometimes a business license (e.g., the "business tax receipt" or the "certificate of use" is mistaken for a professional license. The difference between them is this. A business operating license pertains to the business while a professional license pertains to the individual. It is important to note that whereas the business license authorizes a company to engage in business, it does not authorize an individual to perform a trade.
Many types of contractors are required to have a professional license because improper construction can cause catastrophic damage such as fire, flood, and collapse-and this damage may not be isolated to just one home; it may be widespread. Fire can devastate an entire community. Consequently, Florida for example, has strict standards related to contractor licensing. In Florida, applicants that wish to be licensed as contractors must be able to demonstrate that they are proficient and practiced in their trade and able to perform other duties that are required of them as professionals. Good character must also be demonstrated. Florida's licensing board requires an applicant to provide proof of:
Sufficient trade knowledge, sufficient trade experience, financial stability, and a history free of dishonest and felonious acts.
When it comes to contractor testing, the state of Florida ranks high. Florida requires an applicant pursuing a general contractor's license to pass a challenging test that is administered over two days addressing building codes, estimating, accounting, contracting, permitting, scheduling, energy efficiency, safety, and law. Because knowledge alone does not ensure competency, extensive experience is also required. In addition, a credit report and financial statement is evaluated to establish the applicant's financial history, and a background check is performed as well.
I spy, then verifyVerifying a contractor's credentials is important because, although many contractors are upstanding and honest individuals, some lie about their qualifications. This deceit can range from verbal exaggerations to cleverly forged documents. Therefore, simply accepting a contractor's word and paperwork is not enough. If you want to make an informed choice, you are obligated to use due diligence. Every state has governing entities that regulate contractors. For example, in Florida the Department of Business and Professional Regulation regulates contractors through licensing. There are also several construction-related professions with practitioners who require licensure. As a means to protect Floridians and the environment, Florida's Department of Agriculture and Consumer Services licenses pest control businesses and certifies professional pest control operators. With strong laws that allow for the transparency of records, you can verify professional licenses with the government regulatory agencies that issue them. Workers' Compensation insurance coverage can also be viewed.
ConclusionA project’s success is contingent on hiring a tiptop team of professionals who are experts in their fields because construction is expensive when it is done right. When things go wrong, it can be financially devastating. To avoid costly pitfalls, it is essential that you understand the business of construction so that your project is done correctly, on time, and on budget.
Contractor Confidential explains how to:
In addition, you learn about permits and inspections, and how it benefits you. Pitfalls such as liens, jobsite injuries, and other costly events are explained.
In addition to the 3 hour audio recording, you’ll receive
Whether you are planning a small repair, remodel, or the construction of a new home, we demystify the construction contracting process so that you can make informed decisions-helping to ensure that your project is done correctly, on time, and on budget without undue exposure to risk.
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