Colorado law – unlicensed contractors

Posted by: Apr 12, 2014By Brian Stutheit

The old Colorado case,  Benham v. Heyde,  (Colo.Supreme Court 1950) said.. . “A contract, entered into by a person in the course of an occupation or business in which he is engaged without taking out a license * * * as required by law, is void and unenforceable where the statute or ordinance expressly vitiates such contracts, or where it expressly prohibits the carrying on of such occupation or business without a license”.

If a contractor is required to have specific licenses and permits to undertake work, the contractor cannot recover compensation for its services when the contractor fails to obtain such licenses or permits. Aspen Drilling Co. v. Hayes (Colo. Court of Appeals 1994).

Colorado does not require State licensing of contractors.  Some cities and counties do have such requirements.  In Jefferson County, where Stutheit & Gartland is located, effective January 1, 2014 all Contractors applying for permits in Unincorporated Jefferson County are required to obtain a Jefferson County Contractors License.  A contractor is anyone who engages in any type of work for compensation for which a building or mechanical permit is required. People who are not considered to be contractors are the property owner, a laborer working under the supervision of a contractor, a person who is performing labor or repair work on their own property, an employee of the property owner who performs full-time maintenance or repair work on the owner’s property, and state-licensed plumbers or electricians.

The City of Lakewood simply registers contractors.  This is probably not the same a requiring a license, but no case has ruled whether Aspen Drilling applies when the contractor needs only to be registered, and not licensed.  Douglas County Colorado also registers general contractors, roofing and mechanical contractors. In many cities, a contractor must show proof of liability insurance when it registers.  This makes it easy for property owners to identify who is a contractor’s insurance company.