What practice is prohibited for contractors who do not have proper licensing?

Contractors who do not have the proper licensing are prohibited from accepting deposits from clients. This restriction is in place to ensure that the financial transactions associated with home building and renovation projects are conducted by qualified professionals who meet state regulations. Accepting deposits from clients entails a commitment to undertake a specific job; therefore, without a license, a contractor cannot lawfully engage in such binding agreements. Licensed contractors must adhere to certain ethical and legal standards, which include securing proper payments for tangible work performed while protecting consumers, making sure that anyone accepting deposits has the necessary authority and oversight.

While providing estimates, buying materials, and performing repair work might seem directly involved in a contractor's day-to-day operations, these do not inherently require a license in the same way that accepting deposits does. Estimates can be provided as preliminary assessments, purchasing materials is often a logistical necessity, and repair work may sometimes fall under certain exemptions depending on local regulations. However, the act of accepting a deposit signifies a formal agreement and a fiduciary responsibility to the client, which reinforces the need for appropriate licensing.