Contractor Hiring Tips

Contractors on home construction project.


If you've already decided upon your home improvement project, you need to do some homework yourself to make sure you hire a reliable contractor.

The first step is to stop by city hall and pick up a free copy of Before Hiring a Contractor. Produced by the State of California Contractor's State License Board, this publication is probably the best guide to the "dos and don'ts" and legal considerations of hiring a contractor. Information on many related topics is also available.

It is far better to find out as much as you can about a contractor before you give them a large chunk of your money and let them tear open your home. Reputable contractors welcome such scrutiny. They wish everyone would investigate before hiring, then they would get more business and the low-bidding, unlicensed, uninsured, smooth-talking, fly-by-night contractors would be out of luck.

Here are a few rules you should follow when hiring any contractor to perform work. These rules are designed to protect you and your contractor from any misunderstandings. These rules are used with permission of The League of California Homeowners, a non-profit, public benefit consumer information organization.

  1. References and Bids

    Depend upon references when selecting. Ask friends, neighbors, relatives, and co-workers for references. Ask for references from the hardware or building supply store. Talk to a Realtor. Do not depend upon the Yellow Pages. That is a phone directory, not a referral source! Always interview as many contractors as possible (a minimum of three is recommended). You'll also want to get bids from several contractors. Check their references from people they worked with in the past.

    Remember: The three most important references a contractor can provide are a current client and the two most recent clients for whom they have performed work. Even good contractors can find themselves in financial trouble. You don't want them to use money from your job to pay the bills from their last job.

    Here are some questions to use when interviewing the contractor's references:

    • Was the job started on time?
    • Was the job finished on time?
    • Were there any surprises during the job?
    • Was the job completed for the pre-agreed upon price?
    • Did you find it easy to get in contact with the contractor while work was in progress?
    • If you had to do it all over again, would you hire the same contractor?
    • How did you handle changes to the original contract?
    • Do not be afraid of asking a prospective contractor for several vendor references, too. Make sure you actually call the vendors and ask about the contractor's credit history with them. Good contractors have good credit and are proud of it!

    A large number of insightful consumer information guides are available on these and related topics at the State of California's Contractors State License Board.

  2. Insurance

    Your contractor should have two types of insurance in order to protect you while the work is being performed on your property:

    • General Liability Insurance: This covers any accidental damage or injury that could occur on your property during the job. Your homeowners insurance will not suffice.
    • Workers compensation insurance: This covers possible work-related injuries at the job site, which in this case is your home. California requires all employers, except sole operators, to have this type of insurance. When working with a "sole operator," there are very specific rules which apply for your protection. You may contact the CSLB to get information about such rules.
  3. Written Contracts

    Insist on a written contract that specifies brands, manufacturer's model numbers and all specifications which apply. The contract should indicate the planned date of completion and include an agreement for the contractor and any sub-contractors to clean up after the project is finished. Any special conditions you want should be included...after all, you're the boss!

  4. Contractor Payments

    Be certain the contract includes a schedule of payments for the complete job. Arrange contractor payments so the down payment, if any, does NOT exceed $1,000 or 10% of the contract, whichever is less (Cal. Bus. & Prof. Code, Section 7159). Only pay for work that has been performed. Never pay in advance for materials or work. (Good contractors have good credit and can get their supplies.) Remember, the payment schedule in your contract must be spelled out in dollars and cents - not percentages of the job!

  5. Subcontractors & Suppliers

    Do not make a final payment until you have seen written receipts for bills paid by the contractor, or written waivers providing he/she has paid for materials and labor on the completed job. Even if you have paid your general contractor in accordance with the contract, if he/she fails to pay an subcontractor or supplier, you may remain responsible to those who perform work or supplied materials for your project. You bear the risk of having a Mechanic's Lien filed against your home, if you have received preliminary notice from any subcontractor or supplier.

  6. Contract Changes

    Once you have signed a contract, make sure all contract changes are in writing and signed by you and the contractor. Never rely upon verbal change order agreements.


    Hiring a contractor is as simple as A-B-C: Always do Background Checks!

    If you practice Home Improvement Lakewood Style, you will most likely enhance the value of your home and avoid any home remodeling nightmares.

    The City of Lakewood staff is here to assist and support you. It starts with a phone call from you.