Just recently I was asked by a potential customer if I would do a cash job. Doing a job for cash is a means for avoiding paying the sales tax. The customer told me that he liked my bid but if I had to charge him sales tax that I would be too high and he would have to go with another contractor. He said the other two contractors were willing to do the job for cash. Roofing slows down during the winter and it becomes necessary to drop your profit margins enough just to keep your employees working. When you need work those offers for cash are tempting but not tempting enough to tarnish your reputation as a legitimate contractor.
A licensed contractor that participates in doing cash jobs is breaking the law and could lose his business. Moreover the customer who thinks he is getting a good deal is actually taking a big risk. You might be thinking how can saving money be a risk? The following are two main reasons why it is a risk:
1) What if you have a problem with your new roof a year after it was installed? You call the guy that put the roof on and he may come and look at it and tell you it’s not his problem or he may just ignore you. Since you did the job as a cash job there is no written agreement therefore you have no legal rights to pursue him to correct the problem. You then have to hire another contractor to fix the problem and now that cheap job did not become so cheap.
2) What would happen if one of the guys that are working on your roof falls off or becomes seriously injured? Because you hired a contractor for cash you will become responsible for that injured person. The person that got injured can potentially sue you for damages and you would be 100% responsible. You could lose your home, your savings and even your sanity. By hiring someone to do work on your property that is not licensed, bonded and insured you are basically accepting sole responsibility for all liabilities. That meas that if something happens to someone or something, you the customer will end up paying.
Just those two reasons are very big risks. Doing business with a licensed legitimate contractor will keep you safe from any liabilities and gives you recourse in the event something goes wrong. Doing business with that legitimate contractor could even end up saving you money. There is no job that is cheap unless it is done honestly and correctly!
Protect yourself and only do business with the licensed legitimate contractor. Verify his status with the various governing agencies such as the Department of Labor & Industries and the Department of Revenue.