If your project requires a building permit but the contractor failed to obtain one due to being unlicensed, a building inspector may stop the work until he or she is satisfied that a licensed contractor has obtained the proper permits.

Homeowners who use unlicensed contractors may also find little recourse if a problem develops after the work is completed. In several states, Arizona for example, registered contractors contribute to a compensation fund that seeks to make wronged consumers whole if a problem develops with a registered or a licensed contractor.