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How to hire a contractor

10 Tips

How to Hire a Contractor :: Top 10 Tips for Homeowners

Hiring a contractor can be tricky. While the majority of licensed contractors are competent, honest, hardworking and financially responsible, most of the challenges the Contractors State License Board hears about could have been prevented by adhering to their top 10 tips for how to hire a contractor. The better informed you are, the smoother your relationship will be with your chosen contractor.

  • Hire only CA state-licensed contractors.
  • Check a contractor’s license number online at www.cslb.ca.gov or by calling 800.321.CSLB (2752).
  • Get at least three bids.
  • Get three references from each bidder and review past work in person.
  • Make sure all project expectations are in writing and only sign the contract if you completely understand the terms.
  • Confirm that the contractor has workers’ compensation insurance for employees.
  • Never pay more than 10% down or $1,000, whichever is less.* Don’t pay in cash.
  • Don’t let payments get ahead of the work.
  • Keep a job file of all papers relating to your project, including all payments.
  • Don’t make the final payment until you’re satisfied with the job.

The Contractors State License Board produced the following 15-minute educational video titled “Doing It Right: Hiring a Licensed Contractor.” The video guides consumers through the process of selecting, hiring and managing a contractor including:

  • How to verify a contractor’s credentials
  • What to include in the written contract
  • How to prevent common disputes
  • Where to go if problems arise

What Kind of Contractor Do You Need?

Understanding the difference between a general and specialty contractor

General engineering and building contractors usually oversee projects and coordinate the specific licensed subcontractors for a job. Specialty or subcontractors usually are hired to perform a single job.  For example, if you need only roofing or plumbing work, you may want to hire a contractor licensed in that particular specialty.

A general building contractor also may contract for specialty work, but must hold a specialty license for that work or actually have a specialty contractor do the work.  The only exception is if the job requires more than two types of work on a building.  Then it is appropriate for a licensed general building contractor to contract for and oversee the entire project. For example, if your kitchen remodeling will involve plumbing, electrical and carpentry work under one contract, you should hire a licensed "B" General Building contractor. Under these circumstances, a "B" contractor may perform all of the work on a building, or subcontract parts of the job to contractors with specialty licenses.

When you need a written contract

In California, there must be a written contract for all home improvement projects over $500 in combined labor and materials costs.  That contract must include specific information about your rights and responsibilities.  In addition, any changes made to that contract must be in writing, be legible, be easy to understand, and inform you of your rights to cancel or rescind the contract. If you are promised something verbally, make sure that it is also included in writing.

What to include in a contract

A contract should contain everything agreed upon by you and your licensed contractor.  It should detail the work, price, when payments will be made, who gets the necessary building permits, and when the job will be finished.  The contract also must identify the contractor, and give his/her address and license number.  A good contract also has warnings and notices about the right to cancel, mechanics liens, and allowable delays.


Get it in writing.  Since a written contract protects both you and the contractor, all agreements should be put in writing.  It should be as specific as possible regarding all materials to be used, such as the quality, quantity, weight, color, size, or brand name as it may apply.  For example, the contract should read "install oak kitchen cabinets, manufactured by Company XYZ, model 01381A, as per the plan," not just "install kitchen cabinets."
Don't sign anything until you understand the contract and agree to the terms. Anything you sign as authorization to move forward with the project could become the contract.        Ask questions until you understand and agree to all the terms before signing.  You also may wish to review the proposed contract with an attorney.
Make sure the contract includes everything that is agreed to, up to and including complete cleanup and removal of debris and materials, along with special requests like saving lumber for firewood or saving certain materials or appliances.  Also give instructions regarding pets, children or areas where materials may not be stored.
Never sign a blank or partially blank contract. Once you sign, both you and the contractor are bound by everything set down in the contract. Make sure to get a copy of the contract, and keep it for your records.
Always update your contract. Even after you have signed the contract and the work already has begun, you may want to make some changes. If you have added or subtracted work, substituted materials or equipment, changed the completion date, etc., make sure to note it in writing on a "change order," and include any price changes. After a change order is signed, it becomes part of the written contract.
For swimming pools, make sure that you receive a Checklist for Homeowners - Swimming Pool. One must be provided in the contract, as well as a plan and scale drawing showing the shape, size dimensions, and construction and equipment specifications. You may wish to refer to Swimming Pool Construction for more information.
Make sure your cancellation is in writing. You may cancel within three (3) days of signing a contract, but it must be mailed before midnight of the third day.
Make sure the financial terms are clear. The contract should include the total price, when payments will be made, and whether there is a cancellation penalty. You should expect to make a down payment on any home improvement job.  That down payment should never exceed 10 percent of the contract price or $1,000, whichever is less.

Video

Check out this great video