Unlicensed Contractors

If you have come to this page because no one told you all this stuff, and you have discovered your “contractor” is unlicensed, there are still a few things you can do:

1.)   If you have not paid in full for the work that has been done, you don’t have to pay any more money.  Under 60-13-30 of New Mexico law, no unlicensed contractor can “act as agent or bring or maintain any action in any court of the state for the collection of compensation for the performance of any act for which a license is required by the Construction Industries Licensing Act without alleging and proving that such contractor was a duly licensed contractor at the time the alleged cause of action arose.   Any contractor operating without a license as required by the Construction Industries Licensing Act shall have no right to file or claim any mechanic’s lien as now provided by law.”

Some construction dispute resolution experts have stated that this also means the unlicensed “contractor” can’t sue you or require you to engage in mediation/arbitration — even if they had you sign a contract that says you must.

2.)  If you have already paid in full for the work that has been done, you need to seek legal counsel to determine if you have a case for filing a lawsuit to seek to recover some (or all) of the money you have paid.  Make sure your attorney is aware of the limitations that affect the unlicensed “contractor” under 60-13-30 of the Construction Industries Licensing Act.

3.)  Tell the “contractor” you have discovered the fact they do not have a contractor’s license, and that you will not be paying them for any further work.  Then report them to the Construction Industry Division so they can take action to prevent further unlicensed activity.

You have a problem with your new home — what now?

So, you have read all of this information, and you still end up with problems.  There are several things you can do to resolve the situation:

1.)  Call your builder and get details of the “call back” program offered.  Put things in writing so the builder knows exactly what items you are talking about.  Be patient.  Builders will often need to work through the sub-contractors who performed the work.

2.)  Check your contract with the builder to see what warranty (if any) the builder offers. The State of New Mexico does not require a contractor to offer any warranty on their products, but many home builders offer a one-year warranty on a new home to give the homeowner a chance to discover any “call-back” items needing to be fixed.  Some builders have chosen to adopt the National Association of Home Builders Construction Standards as part of their warranty program, and they will replace/repair items utilizing the Standards as a guideline.   This gives both the customer and builder a good “baseline” for expectations.  Call the builder and ask if there is someone they can send to inspect what you think  may be a problem.  (Remember, you’ll usually get a better response if you are non-confrontational.)

If you and the builder agree there is a problem but cannot agree on how to fix it, you may want to consider checking the contract for an arbitration or mediation clause.  Even if such a clause is not in the contract, sometimes utilizing the services of a construction dispute resolution company can be an effective way to resolve construction debates.  There are several articles on this website with more information on this process.

3.) If the builder is not responsive to your complaint and your concern is about something you suspect is a building code violation, you may feel you should call the Building Department of your town or city to ask for an inspection.  If you are in a rural area where your town does not have its own Building Department, you can go directly to the Construction Industries Division of the State of NM.  Their consumer complaint process is online at http://www.rld.state.nm.us/CID/Complaints/complaint.htm.  Keep in mind that these entities enforce building codes, and not aesthetics or contract issues. Building codes cover life and safety issues such as foundations and electrical wiring, not cosmetic items like paint, carpeting, or bathroom mirrors.

If your Building Department does not inspect for code violations, you may always contact the Construction Industries Division’s complaint process noted above.

Remember, that in order to fix construction problems, it will be necessary for the builder and/or sub-contractor to have access to your property to inspect or repair the problem.  It would therefore be beneficial to all parties if you can find a way to work  with your builder.  After all, the ultimate goal is to get your problem resolved, not to exact revenge.