Questions to Ask Before You Hire a Contractor

Before you hire anyone, confirm the license or registration your state or county requires, ask for proof of insurance, and get the scope, price, schedule and payment terms in a written contract. The Federal Trade Commission and state attorneys general recommend these steps for home improvement work. Ask every contractor the same questions, including us.

Verify the license or registration

• Ask for the license or registration number and the exact business name on it.
• Look the number up yourself on the official state or county site. The FTC advises checking with your state or county government to confirm a contractor's license.
• Confirm the license fits the type of work. Requirements differ by state, by trade and sometimes by city.
• Ask your state or local consumer protection office whether it has complaints on file, as the FTC suggests.
• If the home was built before 1978, ask whether the firm is certified under the EPA Renovation, Repair and Painting Rule. EPA requires certification for firms paid to disturb painted surfaces in those homes.

Ask for proof of insurance

The FTC advises asking the contractor for proof of insurance. Ask for a certificate of insurance and confirm the policy dates and coverage with the insurer. The New York Attorney General's office notes that insurance protects you from liability if workers are injured or property is damaged.

Compare written estimates

The FTC advises getting more than one written estimate that describes the work, the materials, the completion date and the price. Do not pick the lowest bid automatically. Ask for an explanation when bids differ a lot.

What the written contract should include

• The contractor's name, address, phone number and license number.
• Estimated start and completion dates.
• A description of the work and the materials, including brands and model numbers where it matters.
• The payment schedule.
• Any promises made in conversation about the scope of work.
• A written statement of your right to cancel within three business days, if you signed the contract in your home.
• No blank spaces. The FTC advises filling in every blank before you sign.

Cancellation rights for contracts signed at home

Under the FTC's Cooling-Off Rule, many sales made in your home can be canceled for a full refund until midnight of the third business day after the sale. The seller must give you cancellation forms and a dated contract or receipt that explains this right. Your state may add its own rules, so check with your state attorney general or consumer protection office.

Change orders

Plans can change once work starts. Agree in advance that the contract cannot change without a written change order signed by both of you, stating the effect on price and schedule. The Minnesota Attorney General's office describes this kind of change order clause, and notes that Minnesota law requires contractors to put all contracts and change orders in writing.

Payments and lien waivers

• Do not pay the full amount up front. The FTC notes that some states limit down payments.
• Hold the final payment until the work is done and you are satisfied, as the FTC advises.
• Ask for lien waivers. The Minnesota Attorney General's office explains that in Minnesota, subcontractors and material suppliers who are not paid may have a lien on your property even though they do not have a contract directly with you. A lien waiver is a signed statement giving up that right.
• Lien rules are set by state law. Ask your state attorney general or consumer protection office how they work where you live.