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Home maintenance and repairs

Licensed contractor

A contractor who holds the license your state or local government requires for the kind of work being done, which you can check before you hire.

What It Means

A licensed contractor is a builder or tradesperson who holds the license required for their work where the job is. Licensing rules are set by states, and in some places by counties or cities, so what needs a license and who issues it depends on where you live. The Federal Trade Commission (FTC) advises checkingChecking accountA bank or credit union account for everyday money going in and out, used by debit card, checks, transfers and direct deposit. See more the license with your state or county government and asking for proof of insurance before you hire.

Try It: Spot the Contractor Red Flags

For each thing a contractor might say, pick red flag or fine. The answers follow the FTC's guidance.

"Storm work doesn't need a license."

"I'll need the full price before I start."

"My license number is in the contract."

"Pay me by gift card or wire transfer."

Right so far0of 4

How It Sounds at Home

  • "Is he licensed and insured?"
  • "Look up her license number on the state site."
  • "He wanted cash up front, so we passed."

The Breakdown

How to hire one

  1. Get estimates from more than one contractor.
  2. Check each contractor's license with your state or county government, and ask for proof of insurance. The FTC suggests considering only contractors who are both licensed and insured.
  3. Get a written contract before any work starts. The FTC lists what it should include: the contractor's name, address, phone number and license number, a description of the work, the materials, the completion date and the price.
  4. Agree on a reasonable down paymentDown paymentThe share of a home's price you pay upfront in cash when you buy it; the mortgage covers the rest. See more. Some states limit how much a contractor may ask for up front, and your state consumer protection agency can tell you the rule.
  5. Pay by credit card or check. The FTC warns against wire transfers, gift cards, payment apps, cryptocurrency and cash, since that money is nearly impossible to get back.
  6. Hold the final payment until the job is done and you're satisfied, and ask for lien waivers from the contractor and every subcontractor and supplier.

Try it today. Find your state or county's license lookup page and search the name of the last contractor who worked on your home.

Good to Know

License requirements differ by state and sometimes by county or city, so there's no single national rule. Your state licensing board or local building department can tell you what applies. After storms, the FTC warns that scammers show up claiming no license is needed and asking to be paid for everything first. The FTC also explains that in some states an unpaid subcontractor or supplier can put a mechanic's lien on your home, which is why lien waivers matter.

FAQ

How do I check if a contractor is licensed?

Ask for the license number, then confirm it with your state or county government, as the FTC advises. Your state licensing board is a good place to start.

How much should I pay a contractor up front?

A reasonable down payment, negotiated in the written contract. The FTC notes some states cap it, and your state consumer protection agency can tell you the limit.

What's a lien waiver?

A document showing a contractor, subcontractor or supplier has been paid and gives up the right to file a lien against your home for that work. The FTC suggests getting one from each of them.

Do It in Buhata

Vault (Plus), Tasks

With Plus, keep each contractor's license number, insurance proof and signed contract in Vault, and add the payment milestones as Tasks with due dates.

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Related Terms and Categories

  • Building permit

    Written approval from your city or county to build, repair or tear down part of a building, followed by inspections to check the work meets local codes.

  • Punch list

    A list of the small unfinished or faulty items left at the end of a building or remodeling job that the contractor must fix before the work counts as done.

  • Home inspection

    A professional look at a home's condition, usually before buying, that reports which systems and parts need repair or may need replacing soon.

  • Homeowners insurance claim

    A request to your homeowners insurer to pay for damage or loss the policy covers, backed by photos, a list of what was lost and your receipts.

  • Storm shutters

    Covers fixed over windows and glass doors before a storm so wind pressure and flying debris can't break the glass and let wind and rain inside.

  • Home warranty

    A service contract, bought for a set term, that pays toward repairing or replacing covered home appliances and systems, usually with a fee for each service call.

Home maintenance and repairs

Sources

Federal Trade Commission, "How To Avoid a Home Improvement Scam"; Federal Trade Commission, "How To Avoid Scams After Weather Emergencies and Natural Disasters"; Federal Trade Commission, "Home Repair Scams"

Last updated .