Unlicensed Contractors are in every community in the US
The underground economy is comprised of all the usual suspects including housekeepers, landscapers, drug dealers and of course unlicensed Handymen. This economy has almost $2 trillion (that’s a T) in volume. A 2011 paper Richard Cebula and Edgar Feige estimated that as much as “18-19 percent of total reportable income is not properly reported to the IRS.” That’s as much as $2 trillion in underground economic activity, with about $500 billion in taxes that aren’t being paid to the government. The common thread running through all of these services is that there are no licenses or insurance and federal, state and local taxes are not paid. Since there are no taxes and insurances costs these service providers can underbid any licensed and insured contractor anytime, anywhere. But, you have to weigh the risk against the financial reward. And, when you are using power tools as all handyman do, it’s not a question of if a debilitating accident will happen, but when. Are you willing to take that risk? As a Board member, are you willing to put your association at risk? As a board member you are clearly and obviously breaching the “good business judgement rule”. Read a recent article about a two-day sting operation to catch unlicensed contractors in San Diego, CA.