How to hire a contractor you can trust

Most remodeling problems trace back to the start of the job: a vague scope, a large deposit, a missing license, or a handshake where a contract should be. California has clear rules for home improvement work, and knowing the basics puts you on equal footing with anyone you interview.

This guide is general information, not legal advice. Rules change, so confirm the details with the Contractors State License Board (CSLB) at cslb.ca.gov.

1. Check the license first

In California, most home improvement work has to be done by a contractor licensed by the CSLB. Checking takes a couple of minutes. Go to cslb.ca.gov, choose "Check a License," and search by license number, business name or personal name. Ask for the license number up front. A contractor who hesitates to give it is telling you something.

When the record comes up, look at:

• Status. It should say the license is current and active. Expired, suspended or inactive licenses are a stop sign.
• Business name. It should match the name on the bid and the contract.
• Classification. A "B" general building contractor can manage projects that involve several trades. Specialty licenses start with "C," such as C-10 for electrical or C-36 for plumbing, and cover that trade.
• Bonds. Licensed contractors carry a contractor's bond. It is a limited amount, so treat it as a backstop, not as insurance for your project.
• Workers' compensation. The record shows either a workers' comp policy or an exemption, which is only allowed when the contractor has no employees.
• Disciplinary history. Any public complaints or legal actions appear on the record.

Salespeople who sell home improvement contracts for a contractor must also be registered with the CSLB. You can look them up on the same site.

2. Get comparable bids

Two or three bids are usually enough, as long as they price the same job. If one contractor quotes quartz counters and soft-close drawers and another quotes laminate, the lower number tells you nothing.

The fix is a written scope. Write down what you want done, room by room, with the finishes you have in mind, and give the same document to everyone. Ask each contractor to price it line by line and to list what they are leaving out, such as permits, design, haul-away or appliance installation.

Be careful with a bid that is much lower than the rest. It may leave out work that will come back later as change orders, or it may come from someone cutting corners on permits or insurance. Before you compare, it helps to know what a fair range looks like for your area.

3. The contract and your right to cancel

California requires a written contract for most home improvement jobs, and the law spells out much of what it must contain. Read it all before you sign, and don't sign anything with blank spaces. A good contract usually includes:

• The contractor's name, business address and license number
• The salesperson's name and registration number, if one sold the job
• A detailed description of the work and the materials, including brands or models where they matter
• The total contract price and any finance charges
• The down payment, if any, and a schedule of progress payments tied to specific work
• The approximate start date and the date the work should be substantially complete
• Notices required by law, including information about mechanics liens, the contractor's insurance and your right to cancel
• A statement that changes to the work will be made in writing

Your right to cancel. For most home improvement contracts signed in your home, California gives you the right to cancel within three business days. The contractor has to give you a written notice explaining that right and how to use it. Longer cancellation periods can apply in some cases, including for some homeowners aged 65 and older. If you're unsure which applies to you, check with the CSLB.

If you decide to cancel, follow the instructions in the notice and keep a copy of what you send.

At HRG, every project starts with a written scope and a written contract, so you know what is included before work begins. Whoever you hire, ask for the same.

4. Deposits and progress payments

California caps the down payment on a home improvement contract. It can't be more than 10 percent of the contract price or $1,000, whichever is less. A contractor who asks for more than that up front is asking for something the law doesn't allow.

After the down payment, payments should follow the work. Each progress payment should match work that is done or materials that have been delivered to your home. The contract should describe each stage in plain terms, like "rough plumbing and electrical complete and inspected," so you both know when a payment is due.

5. Change orders in writing

Almost every remodel changes along the way. You pick a different tile, or demolition turns up rotted framing that has to be replaced. That's normal. What matters is how the change is handled.

Each change should be written up as a change order before the work is done. It should describe the change, the added or reduced cost, and any effect on the schedule, and both of you should sign it. Verbal "while we're at it" requests are where many budget disputes start. If it isn't written down, it is hard to sort out later.

6. Mechanics liens and lien releases

California lets the people who work on or supply materials for your project record a mechanics lien against your property if they aren't paid. That includes subcontractors and suppliers you never hired directly. The uncomfortable part is that a lien can be recorded even if you paid your contractor in full, when the contractor didn't pay them.

You may receive preliminary notices in the mail from subcontractors or suppliers early in the job. They aren't accusations. They just mean those companies are working on your project and are preserving their rights. Keep them, because they tell you who you need releases from.

Lien releases are how you protect yourself. When you make a payment, ask for a signed release from the contractor and from the subcontractors and suppliers who were paid from it. A conditional release takes effect once the payment clears; an unconditional release confirms payment was received. Before the final payment, collect unconditional releases from everyone who sent a preliminary notice.

7. Insurance

Ask for proof of two kinds of coverage, and ask the insurance company or agent to send the certificate directly to you.

• General liability covers damage to your home or your neighbor's property caused by the work. The contract has to tell you whether the contractor carries it.
• Workers' compensation covers injuries to the contractor's workers. If a worker without coverage is hurt on your property, you could face a claim. Confirm the policy on the CSLB license record.

It is also worth calling your homeowners insurance company before a big project. Some policies have conditions about construction or vacant homes.

8. Red flags

Any one of these is a reason to slow down. Two or more is a reason to walk away.

• Cash only, or a discount for paying in cash
• A deposit larger than the legal cap, or a request to pay most of the job up front
• No written contract, or a contract with blank spaces
• Pressure to sign today, or a price that is "only good right now"
• Door-to-door offers, especially after fires, storms or other disasters, when unlicensed operators often show up
• A license number that doesn't match the business name, or no license number at all
• A suggestion that you pull the permit yourself as the owner, so the contractor doesn't have to
• No physical business address, or only a cell phone number

The CSLB publishes warnings about common scams, particularly after disasters. If something feels off, check their site before you sign.

9. Questions to ask before you sign

• What is your license number, and what classification is it?
• Can you send your general liability and workers' comp certificates from your insurer?
• Who will be on site day to day, and who do I call with questions?
• Which parts of the job will subcontractors do?
• Who pulls the permit, and are permit fees included in this price?
• What is not included in this bid?
• How do you handle change orders and hidden conditions?
• What is the payment schedule, and what work does each payment match?
• How long until you can start, and how long will the work take?
• What warranty do you give on your work, and is it in writing?
• Can I talk to homeowners whose projects you finished recently?

Good contractors expect these questions and answer them without fuss. The way someone responds tells you a lot about how the job will go.

Common questions