No Contractor Registration = No Payment for Idaho Contractors
Like many states, contracting in Idaho is regulated activity. Without the proper registration, contractors are subject to monetary penalties and loss of legal rights for work they may have performed. Under Idaho’s Contractor’s Registration Act (“Act”), any person acting as a contractor without a current registration is guilty of a misdemeanor and may be punished by a fine up to $1,000 or by imprisonment in the county jail up to six months, or both.
For me, the $1,000 fine or six months in jail is plenty of incentive to properly register in the state before conducting work on a project. Yet, there are other penalties under the Act that should get the attention of any contractor contemplating working in Idaho. Chiefly, that a contractor cannot sue for payment or enforce a mechanic’s lien if they are not properly registered with the state. The loss of these two rights could mean that you will not be paid for your work on the project.
Business Tip: Make sure the correct name of the company performing the work is registered.
As a contractor you will want to make sure the correct name of the company is registered with the Idaho Contractors Board. Double check the following:
- Does the registered name have the correct corporate entity designation such as Inc. or LLC?
- Is the name spelled correctly and does it match the company name on your standard contract?
These seem like simple issues but the Idaho Supreme Court in Stonebrook Construction LLC v. Chase Home Finance, LLC, 152 Idaho 927 (Idaho 2012), has provided some guidance on how strictly courts will interpret the Idaho’s contractor registration requirement. The takeaway from Stonebrook is that something as simple as failing to have the correct corporate designation may be fatal to your mechanic’s lien claim and your ability to pursue a collection action in Idaho.