In an effort to crack down on dishonest, unscrupulous and incompetent contractors, the Idaho legislature enacted into law the “Idaho Contractor Registration Act.” The Act makes it unlawful for contractors to engage in the business, or to hold oneself out as, a contractor without registering with the Bureau of Occupational licenses post January 1, 2006.
The Act defines “contractor” and “construction” very broadly, however, it does not require registration by other professionals that must otherwise be licensed or regulated by the state such as electricians, plumbers and the like. Moreover, the Act has a laundry list of exemptions such as minor projects in which the aggregate amount of labor and materials is less than $2,000.00 or a home owner performing work on their own property that does not have the intention of flipping the property for profit within 12 months of completion of the project. For a complete list of exemptions, see Idaho Code § 54-5205.
Failure to comply with the Act bars a contractor from filing any action in any court of Idaho to recover compensation for work rendered and is also denied lien rights otherwise afforded a contractor for the improvement of real property. It is also considered a misdemeanor if one is found in violation of the Act, subjecting a guilty party up to $1,000.00 in fines and possibly up to six months in jail.
For the obvious reasons stated above, it is imperative for contractors to register under the Act or they may quickly find themselves in the unfortunate position of providing free labor and materials. I have personally seen this happen before; where the work and materials were provided, but because the contractor failed to register, they were left with no viable legal action to receive compensation for their labors.
About the Author:
Chad E. Bernards is an attorney at the Idaho Business Law Group, PLLC, located in Meridian, Idaho. You can find him at idahobusinesslawgroup.com, email at firstname.lastname@example.org.