Why Hiring a Licensed HVAC Contractor & Pulling Permits Matters

You've seen the Craigslist ads: "HVAC Installation $5,000 - Cash Only - No Permits Needed." It sounds like a steal. Until you're facing tens of thousands in unpermitted work costs, a home sale that falls through, or a system that breaks down three months later with no recourse.

We've helped dozens of Bay Area homeowners "legalize" unpermitted HVAC installations and fixed catastrophic failures from unlicensed contractors. Here's what you need to know—and real stories from our customers' experiences.

Real Story #1: The Cash Deal That Cost $15,000

What Happened: Maria got a quote from a contractor in a truck with a handwritten price list. He offered $5,500 to replace her furnace—no permit, cash only, "all under the table." It sounded great compared to licensed contractors at $8,000+. He installed it in one day. No paperwork. No records.

Three years later, Maria wanted to sell her home. During the inspection, the buyer's inspector found no permit on file. The title company wouldn't clear the sale. Maria discovered she had two options:

Option 1: Legalize it

Pay for the original permit ($800-$1,200)
Schedule a city inspector ($400-$600)
Get system documentation ($500-$800)
System found installed improperly: modifications required: $2,500-$4,000

Option 2: Replace it

Install a new, permitted, code-compliant system
Cost: $8,500-$10,000

Maria chose legalization. The inspector found improper gas line connections, an insufficient electrical circuit, and wrong refrigerant charge. The "unlicensed contractor" had never been heard from again.

Total cost to legalize and fix: $4,600-$6,600 in legalization costs

What it would have cost with a licensed contractor originally: $8,500-$10,000 installed with proper permits and zero follow-up costs

Real Story #2: The Two-Year Repair Nightmare

What Happened: David hired an unlicensed contractor to install a mini-split system for $5,500—undercutting licensed contractors by $2,500-$4,000. The contractor used improper refrigerant charge, undersized the condensate line, and never tested the system under load. The system worked—barely—for two years.

Then it started short-cycling. The outdoor unit shut down every 15 minutes. David called the original contractor. No response. He tried calling repeatedly over three months. Nothing.

He called us.

What We Found:

Improper refrigerant charge (too much refrigerant trapped in outdoor unit)
Condensate line clogged with ice—causing system to overheat
Electrical disconnect installed backwards (serious safety hazard)
No warranty, no record of installation, no manufacturer support

Our Options:

Service calls to identify and fix each problem: $400-$800 per visit
Hire the original contractor (if we could find him): Impossible
File a complaint with the Contractors State License Board: He had no license, so nothing to complain about

What We Did: We fixed it. Proper refrigerant charge, new condensate line, corrected electrical. Three service visits over six weeks. Cost: $2,400.

David's total cost:

Original unlicensed installation: $5,500
Repair work: $2,400
Total: $7,900

What a licensed contractor would have charged originally: $8,000-$10,000 installed with full warranty and manufacturer support—and zero follow-up issues

Real Story #3: The Franken-System

What Happened: Jorge's family moved into an Oakland home with an existing ductless system installed by an unlicensed contractor five years earlier. When it stopped cooling, Jorge got our assessment.

What We Found:

The system had been installed with outdoor and indoor units from different manufacturers (Daikin outdoor, Mitsubishi indoor)
Manufacturer specifically voids warranty for cross-brand installations
Improper insulation on refrigerant lines
No thermal expansion valve—just a capillary tube (50-year-old technology, wrong for this system)
Electrical work done by a handyman, not a licensed electrician

This wasn't just bad—it was dangerous. The improperly sized expansion valve was causing pressure spikes. The electrical work could have created a fire hazard.

The Reality:

Neither manufacturer would warranty it
City never inspected it
Jorge couldn't claim it on homeowner's insurance for repair (unpermitted work isn't covered)
No license meant no liability coverage if something went wrong

What We Did: We replaced the entire system with proper code-compliant equipment. Cost: $10,000-$12,500

Jorge's situation:

He was stuck paying full replacement cost with no warranty history
With a licensed contractor originally: $8,000-$10,000 with full warranty and proper installation from day one

Real Story #4: The Electrocution Risk (The Scariest One)

What Happened: A San Mateo landlord hired an unlicensed electrician and a cash contractor to add a new mini-split system in a rental unit. The contractor installed the HVAC system. The unlicensed electrician did the electrical work—without any permits, inspection, or oversight.

Two weeks later, a tenant stepped into the shower. The water was running. When the tenant reached for the shower faucet—metal, of course—they touched the faucet handle and got electrocuted. The tenant collapsed in the shower, still connected to live electricity through the water flow.

The tenant survived, but barely. ER visit. Serious electrical burns. Cardiac monitoring. Permanent nerve damage in the hand.

We were called to investigate.

What We Found: The unlicensed electrician had made a catastrophic error in the electrical rough-in:

Ran the HVAC circuit wiring in close proximity to the bathroom plumbing without proper separation or shielding
Failed to properly ground and bond the metal water pipes
Did not install ground-fault circuit interrupter (GFCI) protection as required in bathrooms
The live electrical wire had migrated through the wall cavity and made contact with the copper water supply line
This energized the entire metal water piping system—including the shower faucet
When the tenant touched the faucet in the wet shower, they became the path to ground

The water itself was conductive. The wet floor amplified the voltage. The current went directly through the tenant's heart.

Why This Happened:

No licensed electrician (C-10 license required)
No permit = no city electrical inspection (inspector would have caught improper spacing and bonding)
No manufacturer inspection or commissioning
The unlicensed electrician didn't know or didn't follow current code requirements for:
- Proper spacing between HVAC circuits and plumbing
- Metal pipe bonding and grounding in bathrooms
- GFCI protection (life safety requirement in bathrooms)
- Proper wire routing and support
No liability insurance to cover the injury

The Legal Fallout:

Tenant injury claim: $85,000+ (medical bills + permanent nerve damage settlement)
Landlord's insurance: Denied coverage (unpermitted electrical work violates policy)
Landlord's personal liability: $85,000 out of pocket
Legal fees and liability defense: $18,000+
Required system removal and replacement: $8,500
Total cost: $111,500+

Plus: Potential criminal negligence charges against the unlicensed electrician (never caught—no record of who did the work)

What Should Have Happened:

Hire a licensed HVAC contractor + C-10 electrician (cost: $8,500-$10,000 complete)
Pull permits (cost: $400-$600, included in estimate)
City inspector verifies grounding, bonding, disconnect placement
Liability insurance covers the work
Manufacturer commissioning verifies system safety
Total proper cost: $8,500-$10,000 with full safety

The Heartbreaking Part: A licensed HVAC contractor + licensed C-10 electrician would have cost $3,000-$5,000 more upfront ($8,500-$10,000 total).

The unlicensed route cost:

$111,500 in liability
A tenant permanently injured with nerve damage
A criminal investigation

The tenant still has pain in their hand. The landlord still has nightmares about what could have happened if the voltage had been higher or the contact had lasted two more seconds.

Why Permits Matter: The Real Risks

1. Safety Hazards

Unpermitted work means no city inspection. Unlicensed contractors:

May not know current building codes
Might skip critical safety steps (grounding, proper gas line sizing, electrical disconnect placement)
Won't have liability insurance if something goes wrong

Real risks:

Improper gas connections leading to carbon monoxide leaks
Electrical fires from undersized circuits
Refrigerant line failures causing dangerous pressure spikes
Indoor unit water damage that goes uninsured

2. Warranty Voids Immediately

If the manufacturer discovers unpermitted installation, your warranty is gone
You're paying for 100% of repairs when a licensed contractor's warranty would cover them
No manufacturer support means you're dependent on the unlicensed contractor (who's disappeared)

3. Insurance Doesn't Cover It

Homeowner's insurance typically won't cover damage from unpermitted HVAC work
If an HVAC failure causes water damage, electrical damage, or injury, your claim could be denied
Liability falls entirely on you

4. You Can't Sell Your Home

Title companies require permits before closing
Home inspectors will find unpermitted HVAC work
You'll either:
- Have to legalize it (expensive)
- Have to replace it (very expensive)
- Have to reduce your home price to offset the buyer's costs

Real cost: $10,000-$20,000 in lost equity or remediation costs when you sell

5. Code Violations

Bay Area jurisdictions have gotten stricter with unpermitted HVAC work
Cities can issue compliance orders requiring immediate remediation
Failure to comply can result in fines

6. System Performance Suffers

Unlicensed contractors often:

Don't properly charge refrigerant (oversized systems waste energy)
Skip ductwork sealing (leaks waste 20-30% of conditioned air)
Don't commission systems to manufacturer specs
Leave you with poor efficiency and comfort

What Proper Permits Include

Inspection Points:

✓ Proper electrical sizing and disconnect placement
✓ Gas line inspection (pressure testing, connection verification)
✓ Refrigerant line installation to manufacturer specs
✓ Thermostat wiring and functionality
✓ Condensate drain system and slope
✓ System commissioning under load
✓ Performance verification
✓ Safety valve functionality

Documentation You Get:

✓ Permit and inspection records (required when you sell)
✓ Equipment warranty (manufacturer honors it)
✓ Contractor warranty on installation labor
✓ Insurance coverage (contractor's liability covers damage)
✓ Financing & rebate eligibility (rebates require permits)

What to Ask Before Hiring

"Can I See Your Contractor License?"

Licensed contractors carry a wallet card from the California Contractors State License Board
It shows their license number, type of license, and expiration date
You can verify at cslb.ca.gov - type in their license number
If they can't produce it, they're unlicensed. Don't hire them.

"Will You Pull Permits?"

They should say yes without hesitation
If they ask "can we skip permits to save money," that's a red flag
Permits are required by law—not optional

"What's Included in Your Warranty?"

Licensed contractors offer written labor warranties (typically 1-10 years)
Unlicensed contractors offer nothing—you have no recourse if something fails
Ask for it in writing before signing anything

"Are You Bonded and Insured?"

Ask to see proof of general liability and workers' compensation insurance
This protects you if something goes wrong
If they can't show proof, they're not properly protected

Galaxy's Licenses & Credentials

We hold California contractor licenses B (General Contractor), C-20 (Warm Air Heating), and C-10 (Electrical).

Galaxy License #1076868 | Verify at cslb.ca.gov

Every technician on our team is:

✓ NATE Certified (North American Technician Excellence)
✓ EPA 608 Certified for refrigerant handling
✓ Trained to current Bay Area building codes
✓ Employees (not subcontractors)
✓ Fully insured and bonded

We pull permits on every installation—not because the law requires it, but because it's the right thing to do for our customers.

When you hire Galaxy:

You get verified credentials
You get proper permits and city inspection
You get full manufacturer warranty
You get contractor warranty on our labor
You get insurance coverage for any damage
You get documentation for home sales
You get system performance guarantees

You get peace of mind.

The Math: Licensed vs Unlicensed

Factor	Unlicensed	Licensed (Galaxy)
Initial Cost	$5,500-$7,000	$8,500-$10,000
Permits	$0	Included
Warranty	None	10+ years
Insurance	Not covered	Fully covered
3-Year Repair Cost	$2,000-$4,000	$0-$300
When Selling Home	$10,000-$20,000 cost or replacement	Clean title, no issues
5-Year Reliability	50-60% systems fail/need work	95%+ systems perfect
Home Sale Impact	-$10,000-$20,000	None
True 10-Year Cost	$16,000-$25,000	$7,000-$10,000

The licensed contractor saves you money over time. Every time.

What "Legalizing" Unpermitted Work Costs

Already stuck with unpermitted work? Here's what to expect:

Step 1: Get a Licensed Contractor Assessment

Cost: $200-$400 for a detailed report
What you get: Documentation of what's installed, how it's installed, code violations
Timeline: 1 appointment

Step 2: Apply for a Permit (Retroactive)

Cost: $800-$1,500 depending on city
What you need: Detailed contractor assessment, equipment specs, installer documentation
Timeline: 2-4 weeks for city approval

Step 3: City Inspection

Cost: $400-$600 for inspection fee
What happens: Inspector reviews the system against current code
Likely outcome: 50-70% of unpermitted systems need modifications
Timeline: 1-2 weeks for inspection

Step 4: Code Corrections (If Needed)

Cost: $1,500-$4,000+ (if major fixes needed)
Common issues: Electrical undersized, gas line improper, system not to code
Timeline: 2-4 weeks

Step 5: Final Inspection & Permit Closure

Cost: $200-$300
Timeline: 1-2 weeks

Total cost to legalize: $3,600-$6,800 plus potential modifications

Versus original licensed installation: $7,000-$9,000 all-in, code-compliant, with warranty

When You Should Call Galaxy

✓ You got quotes from "cash contractors" with no permits—get a second opinion from us
✓ You bought a home with unpermitted HVAC work—we'll assess it
✓ You already have unpermitted work and need to legalize it—we can help
✓ You want to know if your current contractor is licensed—we'll verify
✓ You want a licensed, permitted, guaranteed HVAC installation—let's schedule

Bottom Line

The cheapest contractor isn't always the best deal. The contractor who disappears after installation costs you thousands in repairs, warrants you pay out of pocket, and creates liability risks that hurt you when you sell.

A licensed contractor costs more upfront. That investment protects you for the next 15+ years.

We've spent 20+ years earning Galaxy's reputation as Bay Area's most trusted HVAC contractor. We pull permits. We get inspected. We warranty our work. We show up for service calls. We're here when you need us.

That's worth the investment.

Schedule Your Free Licensed HVAC Consultation

Whether you're upgrading, fixing unpermitted work, or just want a licensed expert to review a quote you got elsewhere, let's talk.

Get Your Free HVAC Consultation | Call (925) 578-3293

Verify our licenses anytime:
California Contractors State License Board: cslb.ca.gov
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Why Hiring a Licensed HVAC Contractor & Pulling Permits Matters