Hiring a contractor is one of the biggest decisions you'll make as a homeowner. The right contractor delivers your vision on time and budget. The wrong one can cost you thousands in repairs, delays, and legal fees. Here's how to protect yourself.
Step 1: Verify the License
California requires contractors to be licensed by the Contractors State License Board (CSLB) for projects over $500. Verification is free and takes 30 seconds.
- Go to cslb.ca.gov and click "Check a License"
- Verify the license is active (not expired, suspended, or revoked)
- Confirm the license type matches your project needs
- Check for any disciplinary actions or complaints
License Types That Matter
B - General Building Contractor (can do most residential work). C-license specialists: C-10 Electrical, C-36 Plumbing, C-33 Painting, C-43 Sheet Metal. Make sure your contractor has appropriate licenses for your project scope.
Step 2: Verify Insurance
Every legitimate contractor should carry general liability insurance and workers' compensation (if they have employees). Request certificates of insurance and verify they're current.
- General liability: Minimum $1 million recommended
- Workers' compensation: Required if contractor has any employees
- Additional insured: For larger projects, ask to be named on their policy
Step 3: Check References
Ask for references from projects similar to yours in scope and size. Then actually call them. Here's what to ask:
- Was the project completed on time and budget?
- How did they handle unexpected issues?
- Would you hire them again?
- Any complaints about cleanliness or professionalism?
Step 4: Get Multiple Bids
Three bids is the minimum; five is better for large projects. Ensure all bids cover the same scope so you're comparing apples to apples.
Be wary of:
- Bids significantly lower than others (they may be cutting corners or missing scope)
- Verbal-only estimates
- Contractors who pressure you to decide immediately
Step 5: Review the Contract
A proper contract protects both parties. It should include:
- Detailed scope of work
- Total price and payment schedule
- Start and completion dates
- Change order procedures
- Warranty information
- License and insurance information
Step 6: Understand Payment Terms
California law limits down payments to $1,000 or 10% of the contract price, whichever is less. Never pay more upfront, and never pay in full before work is complete.
A typical payment schedule might be: 10% at signing, 30% at materials delivery, 30% at project midpoint, 30% at completion.
Red Flags to Watch For
- Door-to-door solicitation
- Cash-only requests
- Pressure to start immediately
- No physical business address
- Unwillingness to pull permits
- Asking you to pull permits in your name
Taking time to vet contractors properly saves headaches later. A reputable contractor will appreciate your diligence—it shows you're a serious client who values quality work.