SiteKiln gives general information, not legal, tax or financial advice. Talk to a qualified professional before making big decisions.
SiteKiln is built for contractors. That is who we write for: the electricians, plumbers, carpenters, masons, drywall finishers, roofers and builders who keep this country's homes standing. Everything else on this site is written from their side of the fence.
This page is different. This one is for you, the homeowner.
We have written it because we think it is needed, but we want to be upfront about where we are coming from. The overwhelming majority of contractors in this country are excellent at what they do. They are time-served experts in a skilled trade, no different from an attorney or an accountant, and yet it has somehow become acceptable to take shots at the trades in a way nobody would tolerate in other professions. One bad story tarnishes an entire industry of people who just want to do good work and get paid fairly for it.
So this is not here to make you suspicious of everyone who pulls into your driveway. It is here to help you tell the difference between the good ones, who are most of them, and the small minority who make the news. It is also here to help you be a good customer, because the relationship works both ways.
Here is what the good contractors wish you knew.
1. Check the license, and check it yourself
Contractor licensing in the US is state law, not federal, and it varies more than most people expect. Some states license nearly every trade at state level. Some leave it to counties or cities. Some license the electrical and plumbing trades tightly and are far looser about general remodeling. The license that matters is the one for the state, and often the specific classification, where your job is.
Do not accept a license number read out over the phone or printed on a magnet. Look it up yourself on the state board's own system. You are checking three things: that the license is real, that it is currently active and not expired or suspended, and that the classification actually covers the work you are hiring for.
Use the license checker: Contractor license checker has the lookup for every state.
This matters more than it sounds. In several states, work done by an unlicensed contractor is not just a fine for them. It can affect whether the work can be permitted, inspected, insured or resold. See Do I need a contractor license and Working without a contractor license for how seriously different states treat it.
2. Get the insurance certificate from the insurer, not the contractor
Ask for general liability and, if they have any employees, workers compensation. Then ask for the certificate of insurance to be sent to you directly by the insurance agent or carrier, not forwarded as a PDF. A certificate is easy to edit, and an expired or canceled policy looks identical to a live one on a scanned copy.
Workers compensation is the one homeowners routinely skip, and it is the one that can reach you. If someone is hurt working on your property and there is no workers comp behind them, the question of who carries that becomes your problem rather than a purely commercial one. See Certificate of insurance and additional insured and Workers comp explained.
3. The one that catches Americans out: you can pay in full and still get a lien on your house
This is the part with no equivalent in most other countries, and it is the single most important thing on this page.
In the US, subcontractors and material suppliers generally have lien rights against the property, not against the person who owes them money. So if you hire a general contractor, pay that GC every dollar you owe, on time, and the GC then fails to pay their drywall sub or their lumber yard, those unpaid parties can file a mechanics lien against your home. You paid. You can still end up with a lien clouding your title, and in the worst case paying twice.
You are not powerless here, and the protection is routine paperwork rather than anything exotic.
Preliminary notices are normal. Early in a job you may receive formal notices in the mail from subs and suppliers you have never spoken to. In many states this is a required step to preserve lien rights, and it is not an accusation or a sign of trouble. Keep every one, because it is a list of exactly who could lien you later.
Lien waivers are how you close that door. A lien waiver is a document where someone gives up their lien rights in exchange for payment. Two questions decide what any waiver actually does: whether it is conditional or unconditional, and whether it covers a progress payment or the final one.
- A conditional waiver only takes effect once the payment it names is actually received and clears. If the check bounces, the waiver never takes effect. This is the safe one to be handed.
- An unconditional waiver takes effect the moment it is signed, whether or not the money ever arrives.
As the person paying, the practical routine is this. With each progress payment, collect waivers covering the work paid for. Before you release the final payment, collect unconditional final waivers from everyone with lien rights, which means the GC, the subs, and the suppliers, not just the GC. Ask for the list of who that includes at the start of the job, not the end.
Full detail is in Lien waivers explained, written for contractors but the mechanics are identical from your side of the table. Mechanics lien basics explains what a lien actually does.
4. Do not pull the permit yourself
Somewhere in the conversation, someone may suggest you pull the permit as an owner-builder because it is quicker or cheaper. Decline.
Whoever pulls the permit takes on legal responsibility for the work meeting code. The name on the permit is the party the building department holds responsible. If you pull an owner-builder permit for work a contractor is performing, then on paper you carry the compliance obligation for work you did not do and are not qualified to assess. It also muddies who is responsible if the work fails later, because the paper trail says you built it.
There is a second signal in it. In most states, a licensed contractor working under a homeowner's owner-builder permit is breaking the rules their own licensing board enforces. A contractor who suggests it is either not licensed for that work or is willing to work around the rules, and neither is what you want. See Should the homeowner pull the permit and What happens if work was done without a permit.
Unpermitted work does not stay buried. It surfaces at resale, at appraisal, or on an insurance claim, usually at the worst possible moment.
5. Get it in writing, and know what "in writing" means
A quote on a text message is not a contract. What you want, at minimum:
- The full scope, in specific terms. "Remodel bathroom" is not a scope. Fixture counts, materials, finishes and what is explicitly excluded are.
- Who is responsible for permits and inspections.
- A payment schedule tied to milestones, not to dates.
- Start and completion expectations, and what happens if they slip.
- How changes get handled and priced.
- Warranty terms, and what voids them.
- License number, business name and the insurance details you verified.
The contract that protects you covers what a good one looks like.
6. Deposits and payment schedule
Never pay for a job in full before it starts. A reasonable deposit covers mobilization and materials. A deposit that covers most of the job transfers all the risk to you and removes the contractor's reason to come back.
Several states cap how much a home improvement contractor can take as a down payment, and the cap differs by state, so check your own state's rule rather than a number you read somewhere. Tie every payment after that to a milestone you can actually see, and hold a final payment until the work has passed its inspections and you have your lien waivers.
Be very cautious about cash-only pricing. The discount is rarely worth the loss of a paper trail, and the paper trail is what you will need if anything goes wrong.
7. Change orders
Jobs change. Walls open up and reveal problems, you change your mind about tile, the inspector asks for something extra. That is normal and it is not a contractor being difficult.
What is not normal is a change getting priced after it has been done. Every change should be written down, priced and agreed before the work happens, even briefly, even by text. It protects you from a surprise on the final invoice and it protects them from doing work nobody agreed to pay for. See Change orders.
8. Your right to cancel
Under the FTC's Cooling-Off Rule, a contract worth $25 or more that you sign at your own home, or anywhere that is not the seller's normal place of business, generally gives you three business days to cancel for any reason and get all your money back. You have until midnight of the third business day. For contracts signed at a temporary sales location such as a home show or a hotel presentation, the threshold is $130 or more.
The seller is supposed to tell you about this right and hand you dated cancellation forms. If someone sells you a roof in your kitchen and never mentions any of that, note it.
The federal rule is the floor, not the ceiling. Many states have their own home improvement or home solicitation laws that add a right to cancel, sometimes with a longer window. See Can a customer cancel after signing.
9. Red flags
None of these individually proves anything. Several together should stop you.
- They knocked on your door after a storm. Storm chasing is a real pattern. Reputable local contractors are usually too busy after severe weather to canvass neighborhoods.
- Pressure and expiring prices. A price that vanishes if you do not sign today is a sales tactic, not a quote.
- A large deposit demanded up front, especially in cash.
- No written contract, or one that fits on a single page with no scope detail.
- No license, or a license they will not let you verify.
- No physical business address, unmarked vehicles, and a cell number as the only contact.
- A bid dramatically below everyone else's. Either they have missed something in the scope, in which case you will meet it as a change order, or they are not carrying the insurance and overheads the others are.
10. How to be a good customer
This part matters more than most homeowners realize, because the best contractors can choose their jobs, and they choose the clients who make work possible.
Be clear about what you want and try to decide before work starts, because changing your mind at framing is cheap and changing it at finish is not. Give them access and a working restroom. Keep the site clear. Pay on time, every time, without being chased, because late payment is the single biggest thing that damages small contracting businesses. Raise problems early and directly with the contractor rather than saving them for a review.
And if they do good work, say so publicly. A review takes you two minutes and is worth more to a small contractor than almost anything else you could give them.
If it goes wrong
Talk to the contractor first, in writing, with specifics and photos. A lot of disputes are a misunderstanding about scope that neither side wrote down.
If that does not resolve it, your state licensing board takes complaints against licensed contractors, and that process exists precisely for this. Customer complaint to the licensing board explains how it looks from the contractor's side, which is useful to understand before you file. Small claims court handles smaller disputes without lawyers, with limits set by each state.
Keep everything: the contract, change orders, invoices, payment records, permits, inspection results and your messages, in date order. Whatever route you end up taking, the evidence decides it.