hiring an unlicensed contractor

What recourse does a property owner have against an unlicensed contractor? Q: I hired a landscaper knowing he did not have a contractor’s license and after I paid for several months of work at my house, I want to terminate the contract and recover all of the compensation I paid the landscaper. Can I retain the benefits of the work performed and also recover the amount I paid the landscaper, even though I knew he was unlicensed when I hired him?

A: Yes, although it seems unfair that a homeowner may retain the benefits of work performed by the landscaper even though the homeowner knew he was not licensed before the work began, section 7031 of California’s Business and Professions Code provides the hiring party with both a defensive shield against any claim for payment by the unlicensed contractor, and an affirmative sword to sue the unlicensed contractor for all compensation paid under the contract. Equitable defenses such as unclean hands, estoppel, unjust enrichment, and even claims of fraud by the hiring party, will normally not be available to the unlicensed contractor, even if they are based upon the hiring party’s prior knowledge of the unlicensed status. Continue reading

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