WECT Investigates: Homeowner learns contractor operating without a license

Updated: Aug. 27, 2020 at 1:44 PM EDT
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WILMINGTON, N.C. (WECT) - It was an unwelcome surprise when his home renovation project was already well underway. Deval Patel was adding a covered back porch and outdoor kitchen to his Forest Hills home when he found out the contractor he’d hired was operating without a license.

“Things got sour about midway through where he started asking for additional add-on money which was a huge surprise to me,” Patel explained.

Patel’s initial contract price with Don Thomas, doing business as Coastal Custom Services, was $52,275, but two months after construction had started, Thomas sent him a new invoice that increased the cost by several thousand dollars for “add-on work.”

Patel said he didn’t ask for any add-on work, and wasn’t looking to pay any more than the original contract price. It was this turn of events that prompted Patel to check on the contractor’s license Thomas had listed on their contract. The two men were neighbors, and Patel knew Thomas had done other jobs around the neighborhood. Because of that familiarity, Patel said he hadn’t thought to research his license when Thomas first offered his services.

The license number on their contract, 09-00027668, has too many digits to fit in the search field on the North Carolina Licensing Board for General Contractors License Search page. But if you drop the 09 prefix, the number is registered to a contractor in New Bern who died two years ago, and whose licence is inactive.

It turns out, Thomas isn’t a licensed contractor in North Carolina, and the biggest project a builder without a license is allowed to tackle under state law is $30,000.

That discovery sent up major red flags for Patel. He started talking to other neighbors who’d hired Thomas to do renovations, and found at least one other family had also had problems that escalated to the point that an attorney got involved.

At that point, Patel ordered Thomas to stop work immediately, and began the process of filing a complaint with the state licensing board. Patel had already paid Thomas $45,680 for the job that wasn’t yet finished. Patel said he was shocked when Thomas then hired an attorney to go after him for the project balance of $6,595, plus several thousand dollars more for custom rafter tails that Patel said he never asked for. Thomas also placed a lien request on Patel’s property for the unpaid balance.

“Now I’m stuck,” Patel said. “I’ve got to finish this house. I’ve got roughly 85% to do on my own. And of course [it will cost] around 12,000 additional dollars to do it properly.”

Contractor responds

WECT reached out to Thomas for his side of the story. He said the license number he listed on his contract was a handyman contractor’s license issued to him by New Hanover County in 2009. Thomas said this was a big misunderstanding, and he did not realize he was not allowed to do jobs over $30,000.

It’s worth noting that the wording on his contract says he “is licensed in the state of North Carolina.” All but one of the permits on file for him with New Hanover County are for jobs reported to the county as under the $30,000 threshold, including Patel’s job. Thomas reported the cost of that job as $29,600 when he applied for a building permit with the county, despite the significantly higher price listed on Patel’s contract.

Thomas told us all of his permits note he is an unlicensed contractor, and he is working to get the complaint Patel had filed against him with the state resolved. He also said he had the lien request he put on Patel’s property removed, after learning he wasn’t allowed to collect any more than $30,000 as an unlicensed contractor.

Thomas said he is now only taking jobs under the $30,000 limit.

State investigating

Joel Macon, the local field investigator for the North Carolina Licensing Board for General Contractors, recently finished his investigation into the dispute between Patel and Thomas, and submitted his report to the committee in Raleigh that reviews these matters.

Macon said that the license number Thomas listed on his contract was a “privilege license” that used to be issued by cities and towns, which is not the same thing as a contractor’s license. Either way, Macon noted, “he cannot perform work $30,000 or more, and he cannot list a ‘privilege license’ in that manner,” after seeing Thomas’s contract.

Larger problem

Situations like the one Patel found himself in are unfortunately not uncommon.

“It’s a very frequent thing—falsification of a certificate, people advertising themselves as licensed when they’re not...which is a violation of statute and something that we can pursue charges against the person for unlicensed practice,” explained Frank Wiesner, the Executive Director of the State Licensing Board for General Contractors.

Last year, his Board opened almost 800 complaints, 400 of them involving unlicensed contractors.

“With an unlicensed contractor, we are allowed to investigate the allegation of unlicensed practice and when we find evidence to support the allegation, we can take the contractor to Superior Court and ask the court to issue an injunction against the individual,” Wiesner added. If they continue to operate despite the court injunction, an unlicensed contractor may have to serve jail time.

Wiesner said that many unlicensed contractors do outstanding work, but they are not allowed to do larger jobs under the law.

Protecting yourself

There are steps homeowners can take to protect themselves. First and foremost, they can research the contractor’s license prior to hiring them, and ask for references. After that, Wiesner recommends trying to limit the amount you pay the contractor upfront. Instead, he suggests paying them as the work progresses or as they need money to purchase materials for your job. You should make sure to also get receipts to verify those materials have been received and paid for.

For a more detailed list of tips for hiring a contractor, click here.

If it’s too late and you’ve already hired a contractor who did not finish the work you paid them for, you may want to look into the Homeowners’s Recovery Fund. It’s a court of last resort for homeowners who have received a judgement against a contractor in court, but the homeowner cannot recover their lost funds because authorities cannot find the contractor, he’s bankrupt or out of business, etc.

The fund was created in the 1990′s by the General Assembly. The licensing board gets 20-30 applications a year for relief through this fund, and pays out hundreds of thousands of dollars a year to reimburse homeowners who have been harmed by a licensed contractor or one who has impersonated a licensed contractor and it’s documented.

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