How to Verify a Contractor Before Hiring Them

You're about to hand someone the keys to your home. They're going to tear out walls, rewire circuits, or rip up your floors. They'll have access to your space for days or weeks. And if they do the job wrong, you're the one who pays for it, sometimes literally, sometimes with a lien on your property.

Checking a contractor's background before hiring them isn't optional. It's the difference between a renovation that goes smoothly and one that ends in court.

Start with the License

Every state has licensing requirements for contractors, though they vary significantly. Some states license at the state level. Others delegate to counties or cities. Some require licenses only for jobs above a certain dollar amount.

Here's how to verify:

• Ask the contractor for their license number. If they hesitate or can't produce one, that's your first and most important red flag.
• Look up the license on your state's contractor licensing board website. Verify that it's active, not expired or suspended.
• Check whether the license type matches the work they're proposing. A general contractor license doesn't necessarily cover electrical or plumbing work.
• Verify that the name on the license matches the name on their business card and their contract.

An unlicensed contractor doing work on your home creates multiple problems. If something goes wrong, you may have no legal recourse. Your homeowner's insurance may not cover damage from unlicensed work. And in many jurisdictions, hiring an unlicensed contractor can result in fines for the homeowner.

Check for Insurance

A legitimate contractor carries two types of insurance: general liability insurance and workers' compensation insurance. Ask for certificates of both, and call the insurance company to verify they're current. Policies can lapse, and a certificate from six months ago might not reflect today's coverage.

Why this matters: if an uninsured worker is injured on your property, you could be liable. If an uninsured contractor damages your neighbor's property during the job, you could be liable for that too. Insurance isn't a nice-to-have. It's a requirement.

Search Court Records

This is where most homeowners stop short, and where the most important information lives. A contractor can have a valid license and current insurance and still have a track record of leaving unhappy customers in their wake.

What to look for in court records:

• Lawsuits from homeowners: Breach of contract, incomplete work, substandard workmanship. One lawsuit might be a difficult client. Multiple lawsuits are a pattern.
• Mechanic's liens: If a contractor has had liens filed against them by subcontractors or suppliers, it means they weren't paying their bills. Those unpaid suppliers can then file liens against your property.
• Liens filed by the contractor: Some contractors file liens aggressively against homeowners as leverage in disputes. This is legal but tells you something about how they operate.
• Criminal records: Fraud, theft, and embezzlement convictions are directly relevant when you're handing someone access to your home and writing them large checks.
• Bankruptcy filings: A contractor who's recently filed for bankruptcy may be taking on work they can't finish, or using your deposit to pay off debts from previous jobs.

A service like CROW can pull court records across multiple jurisdictions to give you a clear picture of a contractor's legal history. This is especially useful because contractors often work across county and state lines.

Check the Better Business Bureau and State Complaints

The BBB maintains records of complaints filed against businesses. While not every complaint is valid, patterns are telling. Your state attorney general's office and consumer protection division also maintain complaint records for contractors.

Look for volume and recency. A complaint from five years ago is different from five complaints in the last twelve months.

Ask the Right Questions

Beyond the records, a conversation with the contractor can reveal a lot:

• Ask for references from jobs completed in the last six months. Not two years ago. Recent references show current performance.
• Ask who will actually be doing the work. Some contractors subcontract everything. If you're hiring them for their reputation, make sure they're the ones showing up.
• Ask about their payment schedule. A contractor who demands full payment upfront is a contractor you should walk away from. Standard practice is a reasonable deposit (10-30%), progress payments tied to milestones, and a final payment upon completion.
• Ask about permits. If the work requires permits, the contractor should pull them. If they suggest skipping permits to save time or money, that's a red flag that can create enormous problems when you try to sell your home.

Red Flags Summary

Walk away if you encounter any of these:

A CROW Clarity Brief covers criminal records, liens, and business filings — everything you need before signing a contract.

• No license or an expired/suspended license
• No insurance or unwillingness to provide certificates
• Multiple lawsuits or complaints from homeowners
• Requests for full payment upfront or cash-only deals
• Reluctance to put the scope of work in writing
• Suggesting you skip permits
• No physical business address
• High-pressure tactics or "today only" pricing

The Cost of Not Checking

The average cost of a contractor dispute that goes to litigation is between $15,000 and $50,000. The average cost of a background check through CROW is a fraction of that. The math is simple.

A good contractor will welcome your due diligence. They know their record is clean, and they know that a cautious homeowner is a professional homeowner. The contractors who bristle at verification are the ones who have something to hide.