Are you certain that your contractor holds the necessary prepaid contractor license issued by the Government of Alberta? Surprisingly, only a handful of contractors have taken the steps to acquire this essential license, even though it’s typically a mandatory requirement.

In the province of Alberta, contractors must possess the proper licensing to accept deposits before they commence work. It’s important to note that a municipal business license does not suffice.

What Exactly is a Prepaid Contractor?

As defined by Service Alberta, any contractors who accept payments before completing work and discuss or finalize contracts away from their regular place of business fall under the category of prepaid contractors according to Alberta’s Consumer Protection Act. This means that if a contractor presents, discusses, or even just mentions a contract while in your home, they must hold a prepaid contractor license.

Additionally, if a contractor requests payment in advance, even if it’s only a partial deposit for materials, they are also required to be licensed as a prepaid contractor. Failure to do so constitutes a breach of the law.

The Purpose of a Prepaid Contractor License

Consumers are particularly vulnerable when contractors accept deposits, so subjecting these companies to additional verification steps is crucial to protect the interests of Albertans. But how does a prepaid contractor license benefit consumers?

1. Security Bond: Licensed prepaid contractors are bonded by the Government of Alberta. If a contractor fails to fulfill the work specified in a customer’s contract, the bond is revoked. This bond can then be used to compensate customers who have been left without completed work and serves as a significant penalty to the contractor.
2. Background Checks: All company directors undergo background checks. If any owner or high-ranking individual in the company has a questionable history, the license won’t be granted. This ensures that a company with a valid prepaid contractor license does not have individuals with a history of fraud running the business.
3. Contract Approval: Our contracts must adhere to specific regulations outlined by Service Alberta. This includes the inclusion of a buyer’s right to cancel clause, a clearly defined scope of work, and a transparent payment schedule.

How to Verify a Company’s Prepaid Contractor License

Fortunately, checking whether a company holds the necessary license is a straightforward process. Simply follow these steps:

1. Visit Service Alberta’s company listing page using this link (which will open in a new window).
2. Enter the company’s name and select “prepaid contractor” from the dropdown menu.
3. If the company possesses a prepaid license, the next page will display a confirmation like the one shown below:

Note: If the company you’re searching for does not have the license, your search will yield no records.

It’s likely no surprise that many of the unsettling tales about contractors vanishing after taking deposits are linked to businesses that do not possess the prepaid contractor license. This is the very reason why Alberta introduced the prepaid contractor license – to protect consumers from falling prey to contractor scams. Make the most of this initiative by ensuring you engage a contractor who holds the necessary license. Your peace of mind is worth it.