Starting construction without a licensed contractor or proper permits is one of the most expensive mistakes a homeowner can make. We’ve been called to many job sites where work was already underway—only to be shut down by the local building department due to missing permits. In nearly every case, the homeowner paid tens of thousands of dollars to correct violations. In one case, the cost exceeded $100,000.

A minority of contractors—especially unlicensed ones—try to justify skipping permits with lines like:

• “Permits require plans, plans cost money, and the permitting process takes months.”

• “Permits will raise your property taxes because the assessor will know of the improvements.”

• “Everyone does it this way.”

• “It’s a small job and can be done quickly.”

These explanations can sound appealing if you’re trying to save money or aren’t familiar with the construction process. But the reality is simple: skipping permits almost always costs far more in the long run.

What Can Go Wrong: A Real Example

In one case, a homeowner who wanted to enlarge their side yard was quoted $25,000 by an unlicensed contractor to cut into a hillside and build a retaining wall. A concerned neighbor noticed the work and contacted the building department.

What followed was a costly, year-long ordeal:

• The homeowner had to hire an architect for design, our firm for engineering, and a geotechnical company to prepare a soil report.

• The wall—built with improper footings and inadequate reinforcement—had to be demolished.

• Because the property was on a hillside, the wall required deep foundations (caissons), not standard shallow footings.

• The entire process took about a year and a half and cost roughly $100,000 on top of the $25,000 already spent—money that was effectively wasted.

Had the project been done correctly from the start—with proper plans, permits, and a licensed contractor—the total cost would have been significantly lower. What started as a $25,000 “deal” ultimately turned into a $125,000 mistake.

Why You Should Always Hire a Licensed Contractor and Obtain Permits

• Work is completed safely, in compliance with building codes, and inspected by the local jurisdiction.

• Licensed contractors are regulated, giving you legal protections.

• Licensed contractors are required to carry workers’ compensation insurance and are bonded, providing financial recourse if something goes wrong or a worker is injured.

• Permitted work is documented, which helps protect your property value.

• Unpermitted work can delay or derail a future home sale and may create issues with insurance claims.

Know Your Local Requirements

This article is not legal advice and is intended for general informational purposes only. Building and contractor requirements vary by state and city. Before starting any construction project, check with your local building department and your state’s contractor licensing board to ensure you are following all applicable laws and permit requirements.