A suspended contractor license means the person cannot legally perform work in their trade, but your rights and next steps depend on what stage your project is in
A suspended contractor license is a temporary revocation issued by your state's licensing board. The contractor cannot legally bid on, sign contracts for, or perform licensed work until the suspension is lifted. The suspension typically results from unpaid fines, failure to maintain required insurance, violations of building code, complaints from previous customers, or failure to pass continuing education requirements.
If you discover a contractor's license is suspended before work begins, you should not hire them and should report the suspension to your state licensing board if they misrepresented their status. If work is already underway, you have different protections depending on whether the suspension happened before or after the contract was signed, and whether the work is complete.
Key Takeaways
- You can verify a contractor's license status through your state's licensing board website, which is free and takes minutes.
- If you hire a suspended contractor, the contract may be unenforceable and you may not be able to recover money through normal legal channels.
- Work performed by a suspended contractor may not pass inspection, and you could be liable for code violations even if you did not know the license was suspended.
- If work is incomplete, you have the right to stop payment and hire a licensed contractor to finish or redo the work.
- Your state's licensing board and attorney general's office can investigate the contractor and may help you recover money or force completion.
How to check a contractor's license status before hiring
Every state maintains a public database of licensed contractors. You can search by name, license number, or business name. The search is free and usually takes less than a minute. Most state licensing boards post the database on their website under a name like "License Lookup" or "Verify a License." If you cannot find it, call your state's licensing board directly — the phone number is listed on the board's main website.
The database will show whether the license is active, suspended, revoked, or expired. It will also show the license type (general contractor, electrician, plumber, etc.), the issue date, and sometimes the reason for suspension or revocation. If the status shows suspended, do not sign a contract with that person. If they claim the suspension has been lifted, ask them to provide a copy of the reinstatement letter from the licensing board — do not take their word for it.
You should also check whether the contractor carries the required liability insurance and workers' compensation insurance. Many states require contractors to maintain active insurance as a condition of licensure. If the license is suspended, the insurance may have lapsed as well. Ask the contractor for a current certificate of insurance before you sign anything.
What happens if you hire a suspended contractor
If you sign a contract with a suspended contractor, the contract may be void or unenforceable depending on your state's law. This means you may not be able to sue the contractor for breach of contract if they fail to complete the work or do it poorly. You also may not be able to recover money through a mechanic's lien, which is a legal claim against the property that allows contractors and suppliers to recover payment. Some states do not allow liens to be filed by unlicensed or suspended contractors.
The contractor may face fines or criminal charges for working without a valid license, but that does not help you recover your money. You may be able to file a complaint with your state's licensing board or attorney general, and they may investigate and take action against the contractor. However, investigation and enforcement can take months or years, and there is no may provide you will recover anything.
You are also at risk if the work does not pass inspection. Building inspectors check that work meets local building codes. If a suspended contractor performed the work, the inspector may reject it or require you to hire a licensed contractor to redo it at your expense. You could then sue the suspended contractor for the cost of redoing the work, but again, the contract may be unenforceable and you may have difficulty collecting.
Your options if work is already underway
If you discover the contractor's license is suspended after work has started, you have the right to stop work when ready. Do not make any more payments. Send the contractor a written notice (email is acceptable) stating that you have discovered the license is suspended and that you are stopping work effective when ready. Keep a copy of the notice for your records.
If the work is incomplete, you can hire a licensed contractor to finish or redo the work. Get a written estimate from the new contractor before you hire them. You can then deduct the cost of completion from any money you still owe the suspended contractor, or you can sue the suspended contractor for the difference if the new contractor's cost is higher than what you originally agreed to pay.
If the work is complete but you have not yet paid, withhold payment until you have had the work inspected by a third party or by the local building department. If the work does not meet code or does not match what was promised in the contract, document the defects in writing and photographs. You can then deduct the cost of repairs from the final payment or refuse to pay entirely, depending on the severity of the defects.
How to file a complaint and recover money
File a complaint with your state's licensing board as soon as you discover the contractor was suspended. The complaint form is usually available on the board's website. You will need to provide your name and contact information, the contractor's name and license number, the dates of the contract and work, the amount you paid, and a description of what happened. Attach copies of the contract, invoices, and any written communication with the contractor.
You should also file a complaint with your state's attorney general office, which oversees consumer protection. Many states have a consumer protection division that investigates complaints about contractors. The attorney general may be able to take action against the contractor on behalf of consumers and may recover money for you.
If you have already paid the contractor and cannot recover the money through complaints, you can sue in small claims court or civil court, depending on the amount. Small claims court is faster and cheaper but has a dollar limit that varies by state (usually between $5,000 and $25,000). You will need to bring copies of the contract, proof of payment, and evidence of the defects or non-completion. The burden is on you to prove the contractor breached the contract, so document everything.
When a contractor's license is suspended versus revoked
A suspended license is temporary. The contractor can explore for reinstatement after meeting certain conditions, such as paying fines, completing continuing education, or maintaining insurance for a set period. A revoked license is permanent or long-term. The contractor cannot work in that trade in that state and must reapply for a new license, which usually requires meeting all original requirements again.
If a contractor's license is revoked, you should never hire them. If you discover a revoked license after hiring, the situation is more serious because the contractor has no path to reinstatement in the near term. File a complaint when ready and consider whether you want to pursue legal action to recover money or force completion by a licensed contractor.
You can ask the licensing board why the license was suspended or revoked. Some boards post the reason on the public database, but others do not. If the reason is not listed, call the board and ask. This information can help you decide whether to hire the contractor if they claim the suspension will be lifted soon, or whether to move on to someone else.
Protecting yourself before you sign a contract
Before you hire any contractor, take these steps: verify the license is active and in good standing; ask for proof of current liability and workers' compensation insurance; get the estimate and contract in writing; and check references by calling previous customers and asking whether they had any disputes or issues with the contractor.
Include a clause in the contract stating that the contractor warrants their license is active and will remain active throughout the project. If the license is suspended during the project, the contractor must stop work when ready and you have the right to hire someone else to complete it at the contractor's expense. This clause protects you if the contractor's license is suspended after you have signed the contract.
Ask the contractor for a completion date and a payment schedule. Do not pay the full amount upfront. Pay a deposit (usually 10 to 30 percent), then pay the balance as work is completed. This way, if the contractor abandons the project or the license is suspended, you have not paid for work that was never finished.
Frequently Asked Questions
Can I sue a contractor if their license was suspended when I hired them?
You may be able to sue, but the contract could be ruled unenforceable because the contractor was not legally authorized to perform the work. You would likely have better success suing for fraud or misrepresentation if the contractor told you the license was active when it was not. Consult a local attorney to understand your options in your state.
What if the contractor says the suspension will be lifted soon?
Do not wait. Hire a licensed contractor instead. Even if the suspension is lifted, you have no may provide the work will be completed on time or to code. If the contractor's license is suspended, they cannot legally work, and you should not rely on promises about reinstatement.
Do I have to pay for work done by a suspended contractor?
No. If you discover the license was suspended when the work was performed, you can refuse to pay or demand a refund. If you have already paid, you can sue to recover the money or file a complaint with the licensing board and attorney general.
Will the building inspector reject work done by a suspended contractor?
Possibly. Inspectors check that work meets code, not whether the contractor was licensed. However, if the work is substandard and the inspector learns the contractor was suspended, they may be more likely to reject it. You could also be liable for code violations even if you did not know the license was suspended.
How long does a license suspension usually last?
It varies by state and by the reason for suspension. Some suspensions last a few months, others a year or more. You can ask the licensing board for an estimated reinstatement date, but they cannot may provide it if the contractor does not meet the conditions for reinstatement.