What Are South Dakota Contractors?
It is estimated that there are over 24,000 workers in the South Dakota construction industry. These workers include contractors, who are individuals and businesses that engage in the construction, building, repair, and alteration of property. Contractors in South Dakota are generally grouped into two categories, which are general contractors, who provide a wide range of building and renovation projects, and specialty contractors, who focus on specific and more technical aspects of construction and home improvement jobs. South Dakota does not provide statewide requirements for general contractor licenses, and this category of contractors are typically issued licenses by local government authorities. However, certain specialty contractors like electricians and plumbers are required to obtain state-issued licenses from the relevant Occupational and Professional Licensing Boards of the South Dakota Department of Labor and Regulation. Note that contractors in the state are mandated to obtain a tax excise license from the state’s Department of Revenue. The license is obligatory for all businesses and individuals engaged in construction, home alterations, building installations, and building repairs of any property.
There are also other professions that require licensing from other agencies in South Dakota such as the South Dakota Board of Medical and Osteopathic Examiners for Medical Practitioners and the State Bar of South Dakota for attorneys. Attorneys are important when engaging contractors for any project as they can help prevent contractual complications between contractors and clients. It is estimated that there are just over 2000 licensed attorneys in South Dakota.
Tips for Hiring a Contractor
in South Dakota
Residents of South Dakota must conduct proper research before engaging the services of contractors. Due diligence is key in avoiding costly mistakes along the way and ensuring the successful delivery of the project. You can use the helpful tips below in securing the right contractor for your home improvement project:
- Always ask for referrals: This is a good first step in hiring the right contractor. It is advisable to check with friends or family who have engaged the potential contractors’ services to find out these contractors' level of expertise and quality of work.
- Collect various bids: Estimates should be gotten from all the contractors that have been referred for comparison on the project timeline, cost, materials to be used, and method of work. Once all options have been explored, and based on the expected outcome, you should be able to select the best contractor for the job.
- Ask for confirmation from past clients: You should always take the opportunity to review the work done by contractors in the past where possible. Where the contractor has been referred by friends or family, you can ask to see the results of the job.
- Request the contractor’s license: A license gives you the confidence that a contractor is skilled and authorized for the particular job. Always make sure that the contractor you intend to hire is licensed to carry out the job. You can verify a contractor’s license by contacting the local licensing agency that is responsible for contractor licensing your area of residence.
- Verify the contractor’s insurance cover: It is very crucial to work with a contractor that has insurance. Residents of South Dakota are advised to request details and proof of the contractor’s insurance cover. This ensures that you are covered financially if an accident occurs during the project.
- Ensure that you get a written contract: It is important to document the itinerary, specifications, costs, and other agreements related to your project, regardless of the reputation of the contractor that you hire. This is because a written and well-detailed agreement provides clarity to both parties and ensures that the project outcome is also understood from inception.
- Make sure that the contract is clear and understood by both parties: The details of the contract should be clearly outlined and it should include a detailed description of the project, all the associated costs, project start and end dates, and a payment schedule. You should consider hiring an attorney to review the contract to ensure that you are well protected and that the contract does not contain any hidden clauses that could impact the project.
- Do not make full upfront payments: You should never make full payment before a project is commenced. Always withhold full payment until the work has been completed to your satisfaction. There should be an agreement between both parties in the contract on the amount of down payment required before the work starts. Ideally, this down payment should not exceed more than one-third of the total cost of the project. You should also keep all payment receipts properly.
How to Search a Contractor’s License in South Dakota?
Excluding specialty contractors like plumbers and electricians, the licensing and regulation of contractors in South Dakota typically falls under the jurisdiction of local government authorities. As such, you will be required to contact the licensing agency that regulates the activities of contractors in your area of residence to authenticate the licensing status of any contractors that you intend to hire. So, you can contact the South Dakota Department of Labor and Regulation’s Plumbing and Electrical Commissions at (605) 773-3429 and (605) 773-3573 respectively to authenticate the licenses of plumbers and electricians. These commissions can also be contacted in person at:
- 308 S. Pierre Street
- Pierre SD 57501
Considering that contractor licensing in South Dakota is generally handled by municipalities, these local government authorities are also responsible for determining the penalties for operating without a relevant contractor license within their respective jurisdictions. However, it should be noted that all contractors in the state that provide construction and home improvement services are required to obtain a contractor’s tax license from the South Dakota Department of Revenue. Contractors that provide the aforementioned services without obtaining a tax license can be found guilty of committing a Class 1 misdemeanor and can face penalties of up to $1,000 in fines, one year in jail, or both. Also, individuals that continue to provide these services after receiving a notification from the Department of Revenue requesting them to obtain a tax license can be found guilty of a Class VI felony. This offense carries a penalty of up to $4,000 in fines, two years imprisonment in the State Penitentiary, or both.
How Much Does a Contractor Charge in
In South Dakota, the cost of hiring a contractor depends on factors like the scope of work, the cost of materials needed for the project, and the skill and expertise of the contractor. Contractors in South Dakota typically charge between $20 - $30 per hour for their labor. Some hourly contractor rates in South Dakota:
You might need the services of an attorney to oversee the legal aspects of your construction or home improvement project. Attorneys in South Dakota charge an average of $50 - $150 per hour for their services.
What Are Home
Scams in South Dakota?
Home repair scams in South Dakota occur when contractors carry out an inferior or shoddy service for unsuspecting homeowners which will require correction down the line. These scams also include instances where the contractors leave the job incomplete or make away with your payment without carrying out any service. Homeowners in South Dakota should always be cautious when hiring contractors because con artists generally use home repairs as an avenue for defrauding unsuspecting residents of the state.
It is important to verify the license status of potential contractors before hiring. This can be done by contacting your local licensing authority or the relevant occupational licensing board of the South Dakota Department of Labour and Regulation for specialty contractors like electricians and plumbers. Furthermore, you should always ensure your contractor is properly bonded and insured before as this will protect you from financial liabilities in case of unforeseen injuries during your renovation work.
Homeowners can also watch out for some of these telltale signs of a home improvement scam, which include:
- The contractor insists on upfront payment
- The contractor cannot or hesitates to provide references
- The contractor demands cash payment
- The contractor is reluctant to provide a written contract
- The contractor avoids work permits
It is advisable to seek guidance from a trusted attorney during your home improvement project to review agreements and contracts with your contractor before signing them. This will protect you from any shady inclusions that may be in the contract. If you or someone you know has fallen victim to home repair scams, you can file a report with the state’s Consumer Protection Division. Alternatively, you can complete and submit an online complaints form on the South Dakota Attorney General’s Office’s website.
What are Common Home Improvement Scams in South Dakota?
It is important to be aware of the recurrent methods and tactics used by home improvement scammers when hiring contractors in South Dakota. Some of them include:
- Door to Door Contractors: Elderly residents are common targets of this scam because they are more trusting, often need help with repairs, and less likely to report fraud. This is because they may be unsure they have been scammed and even ashamed to speak about it. In this scam, the contractor reaches out to different consumers with claims that they have been working in the neighborhood. They offer different repair services that could include plumbing, roofing, or other repair works with deals that are almost hard to resist. Residents should be cautious with these unsolicited services as genuine contractors do not typically go door to door. In many cases, these door-to-door contractors end up taking your money without performing any service or at best offer poor quality service which may cost more than you have bargained down the line.
- Leftover Supplies from Previous Jobs: A scam contractor may approach you by offering to give a discount on leftover materials from a job that was allegedly completed nearby. Their intent is either to use substandard materials for the repair work which may cause more damage in the future, or they hope you will not request for their license. Either way, there is a high probability that they run away with your money or do a very bad job. You should always remember that reputable home repair contractors will not wander around a neighborhood looking for clients to take on their excess materials.
- Free Home Inspections: Be wary of anyone offering you free home inspections as scammers typically use this opportunity to enter your home and come up with nonexistent problems that require fixing all in a bid to rip you off.
- One-Time Deals: This is another common home improvement scam in South Dakota and it involves contractors offering mouth-watering deals that are almost too good. The contractors typically rush you into signing the agreement to take advantage of these deals without allowing you to properly review its details. This usually results in you agreeing to terms and conditions that you would ordinarily not have agreed to. Never be pressured into signing any contract or making any commitment on the spot.
- Advance Payment: In this scam, contractors request total payment or huge deposits before they begin the work. You should never put yourself in a position where you have made a huge down payment without any work to show for it, especially because scammers can run away with your money or end up offering low-quality service. Note that professional contractors typically only request a small initial payment, which is not usually more than one-third of the cost of the project. Any balances will be paid after the work is done. You should also contact the South Dakota Consumer Protection Division at (800) 300-1986 to find out the relevant laws guiding contractor payment options in your area of residence.
In March 2021, the South Dakota Consumer Protection Division, in collaboration with the state’s Department of Revenue, issued a joint statement warning residents of the state against the dangers of working with transient vendors and door-to-door contractors offering home repair services. The state’s Attorney General’s Office has also routinely released similar warnings. In 2016, this office recovered over $2.4 million on behalf of residents of the state that had fallen victim to various types of scams.
There are steps to take if you have either suspect that you might be the victim of a home improvement scam. Firstly, you should bring up the issue with your contractor before you address it legally. This is because the contractor may be willing to issue a refund of your money to prevent any legal issues. Note that all communications regarding the complaint should be made in writing as this will be used as evidence where the need arises. If the contractor fails to respond, an official complaint can be filed with the South Dakota Consumer Protection Division via email or by calling (800) 300-1986. Complaints can also be made to the South Dakota Home Builders Association via (605) 224-2761.
What are Disaster Scams in South Dakota?
Disaster scams in South Dakota occur when fraudulent individuals or businesses deliberately deceive renters or homeowners in the wake of a disaster. They use these periods as an opportunity to take advantage of vulnerable residents, hoping to profit from their misfortune. You should be very vigilant to the schemes of con artists if you have survived a disaster and your home has been damaged due to its effects. Some tips to help you avoid becoming a victim of a disaster scam in South Dakota include:
- Be patient and do not rush into any repairs immediately after the disaster
- Do your research on contractors before committing to their service
- Use contractors who have a proven track record and are willing to present their licenses and credentials. You should also contact your local licensing authority to verify these licenses
- Ask for a written contract and make sure that it includes a detailed scope of the work, a working timeline, the cost of the project, and a payment schedule. The contract should also include the provision of a change order in the event of any changes made during the project and any promises or guarantees made by the contractor
- Ensure that you read and understand the contract before signing. You should ideally get an attorney to help you vet the contract
- Confirm if your project requires any building permits and make sure the contractor obtains them
- Make final payments only after the job has been completed to your satisfaction.
If you have been a victim of a disaster scam or you have any complaints related to these types of scams, then you can file a complaint with the state’s Consumer Protection Division.
What are Common Legal
Legal work scams involve con artists perpetrating fraudulent activities against individuals under false law-related pretenses. In this scheme, scammers may assume the identity of attorneys to swindle unsuspecting victims or they may also be real legal professionals taking advantage of these individuals. Popular legal work scams in South Dakota include:
- Impersonation of legal professionals: The scammers reach out to their victims either by phone, mail, or text, claiming to be attorneys or law firm representatives, and proceed to use this ruse to obtain money or personal information from them. Sometimes, these scammers may go as far as cloning the phone numbers or professional websites of reputable law firms to give themselves an air of credibility and further deceive their victims.
- Living trust scams: In this scam, con artists pose as trust advisors or estate planning attorneys and prey on older people by selling them cheap and unnecessary living trusts. The main aim of these scams is to gain access to the victim’s financial information, assets, and savings.
The following tips can protect you from falling prey to legal work scams in South Dakota:
- Be wary of individuals that pressure you to make quick payments for their services before they provide satisfactory answers to your concerns
- Do your due diligence if you are approached with offers of being represented by a person that claims to be an attorney. You should also do this in instances where you respond to an advert
- Check with the State Bar of South Dakota to verify the identity of any individual that claims to be an estate planning attorney
- Avoid making cash payments as these are not traceable
- Be wary of deals that seem too good to be true. If a firm or an attorney tries to sell a living trust or estate planning package that is ridiculously lower than the norm, chances are that this is an off the shelf approach that is not suited to your needs at all
- Be wary of attorneys that try to coerce or convince you to transfer your funds to a specific advisor or investment scheme. Always try to retain the services of a reputable legal firm for your investment needs and legal advice. Although it may be more costly, it is always more beneficial than falling into the hands of scammers
- Always trust your instincts
- Reports and complaints regarding legal work scams can be made to the South Dakota Consumer Protection Division at (800) 300-1986.
How Long Does it Take to Get a License in
The processing time for obtaining a contractor license in South Dakota is heavily dependent on the type of license that is required and the licensing agency that is responsible for issuing this license. Contractor licenses are typically issued by local government authorities. However, certain specialty contractors like electricians, plumbers, and asbestos abatement contractors are required to obtain their licenses from the state’s Department of Labor and Regulation. Contractors are therefore advised to contact their relevant licensing authorities to find out the processing times for the contractor licenses that they are interested in obtaining as well as the requirements for obtaining these licenses.
How to Maintain your License in South Dakota
Contractors in South Dakota are required to contact their respective licensing agencies to find out specific requirements for maintaining their licenses. These requirements usually include maintaining their insurance and bonds, reporting any changes to their licensing information, and meeting any applicable continuing education stipulations.
On the other hand, South Dakota does not have any mandatory continuing legal education requirements for attorneys that are practicing within the state. However, attorneys that wish to update information on their licenses may do so by contacting the State Bar of South Dakota at:
- 111 W Capitol Avenue #1
- Pierre, SD 57501
- Phone: (605) 224-7554
How to Renew Contractor License in
The validity period and renewal process for contractors in South Dakota differs by location and type of license, and the licensing authority that is responsible for issuing it. For example, electricians are issued state-level licenses that have to be renewed by the 30th of June every two years. Similarly, asbestos abatement contractor licenses are valid for a year and these licenses can only be renewed after the contractors have completed a refresher course, which must be done within a 90 day period either before or after the expiration dates on their licenses. In view of this, contractors in South Dakota that wish to renew their contractor licenses are required to contact their respective licensing agencies to find out the process for doing so as well as any applicable fees that they may have to pay or additional documents that may have to be submitted.
Similarly, attorneys in South Dakota are mandated to renew their membership with the state’s bar association by paying annual membership dues. Queries concerning South Dakota attorney licenses can be directed to (605) 224-7554.