In Oregon, residential construction work above a low dollar threshold legally requires a contractor licensed by the Construction Contractors Board (CCB). Plenty of unlicensed people do the work anyway. They’re cheaper on the bid. Here’s what they’re not.
The license is the floor, not the ceiling
A CCB license doesn’t make somebody a great contractor. It means they’ve passed the basic exam, carry the required insurance, posted a bond, registered their business with the state, and agreed to be subject to CCB oversight. Skill, judgment, and craftsmanship are separate questions, and you evaluate those by looking at past work and talking to past clients.
But the license is the floor. Below the floor is somebody who is operating outside the system entirely, and that’s the comparison this article is about.
Insurance
A licensed contractor carries general liability insurance and (if they have employees) workers’ compensation. If a worker falls off your roof, workers’ comp covers the medical bills and lost wages. If a saw cuts into the wrong pipe and your basement floods, liability covers the damage. With an unlicensed crew, you may be the one on the hook for both. Your homeowners’ insurance is not designed to cover injuries to people you’ve effectively hired as workers, and an injured uninsured worker on your property is a lawsuit waiting to happen.
Bonding
Oregon-licensed residential contractors post a bond ($20,000 for general contractors at the time of writing). If they walk off the job, do shoddy work, or fail to pay subs and suppliers (which can result in liens on your house), the bond is a financial backstop you can claim against through the CCB dispute resolution process. There’s no equivalent with an unlicensed contractor. If they disappear with your deposit, your only path is small claims or civil court, and good luck collecting if they don’t have assets.
Permits and inspections
Licensed contractors pull permits. Unlicensed work usually doesn’t get permitted. That sounds like “we saved a step,” but unpermitted work has a long shadow.
When you sell the house, the seller’s property disclosure asks about additions, alterations, or improvements that may not have been permitted. If the answer is yes and the buyer’s inspector finds the work, you’re looking at one of three outcomes: a price reduction, the deal falls through, or you pay for a retroactive permit (which often means opening walls to expose the work for inspection). All three are expensive.
There’s also the safety side. Permitted electrical work gets inspected. Permitted gas work gets pressure tested. Permitted structural work gets reviewed for load paths. The inspection regime exists because un-inspected work has killed people. We don’t tell people to permit work because the city says to. We tell people to permit work because that’s how you find out the wiring is right before it starts a fire.
Accountability
If things go wrong with a licensed contractor, you have CCB dispute resolution. You file a claim, the CCB investigates, mediates, and if needed, processes a payout from the bond. It’s not a perfect system, but it’s a system.
With an unlicensed contractor, the only recourse is small claims court (up to $10,000 in Oregon) or civil court (above that). Both take months. Neither helps you finish the project that was supposed to be done last spring.
Lead-safe work on older homes
If your house was built before 1978, the EPA Lead Renovation, Repair, and Painting (RRP) rule requires that any renovation that disturbs more than 6 square feet of painted surface inside (or 20 square feet outside) be performed by a certified Lead-Safe Renovator using specific containment, work practices, and cleanup verification. This is federal law, not Oregon-specific, and the EPA has fined homeowners and contractors for non-compliance.
A licensed contractor who works on older homes will be certified (Keyser Construction is EPA Lead-Safe Renovator Certified). An unlicensed crew is almost never certified, and the homeowner is the one left holding the bag if lead dust contaminates the house.
Tax and resale considerations
Permitted improvements that increase the value of the house become part of your cost basis when you sell, which reduces capital gains. Unpermitted work doesn’t get that benefit because there’s no documented improvement record. On a long-held home with significant remodels, that difference can be tens of thousands of dollars at sale.
The price difference is smaller than you think
The conventional wisdom is that licensed contractors are dramatically more expensive than unlicensed ones. In practice, the gap is often smaller than people expect once you account for the value of insurance, bonding, permits, and warranty work. What unlicensed contractors really save you is the paper trail, which is the opposite of a benefit.
What to ask before you hire anyone
Before signing a contract with any residential contractor in Oregon, ask for and verify the following:
- CCB license number (verify at the CCB website’s contractor lookup)
- Current certificate of insurance, with you named as an additional insured for the job
- Proof of workers’ compensation, if they have employees
- EPA Lead-Safe Renovator certification, if your house was built before 1978
- A written contract with the CCB consumer protection notice attached
- References from at least three recent clients on similar work
Anyone who hesitates on any of those is telling you something important.
Keyser Construction is CCB #121142 (Oregon), #KEYSEC 19680J (Washington), EPA Lead-Safe Renovator Certified, and BBB A+ accredited since 2007. We’re happy to send any of those documents on request before you’ve signed anything.