Hiring a contractor is one of the biggest risks a homeowner or renter can take. You're trusting a stranger with your home — and often your money upfront. Yet most people skip the basic checks that could save them thousands of dollars and months of headaches.
Here's exactly what to do before you sign anything or hand over a single dollar.
1. Verify Their License
Every state has a contractor licensing board. Before hiring anyone, look them up.
- New York: New York Department of State
- California: CSLB License Check
- Florida: DBPR License Verification
- Texas: TDLR License Search
Search by name, business name, or license number. Confirm the license is active and covers the type of work you need done.
If they claim to be licensed but can't give you a license number — walk away.
2. Check Their Insurance
A legitimate contractor carries two types of insurance:
- General Liability — covers damage to your property
- Workers' Compensation — covers their workers if someone gets hurt on your property
Ask for a Certificate of Insurance and call the insurance company directly to verify it's current. If they're not insured, YOU could be liable for accidents that happen on your property.
3. Look Up Their Business
Search their business name on your state's Secretary of State website. A legitimate contracting business should be registered. If they're operating under a name that doesn't match any registered entity, that's a red flag.
Also Google their business name + "reviews" + "complaints." Check:
- Google Reviews
- Yelp
- Better Business Bureau (BBB)
- Nextdoor
One or two bad reviews is normal. A pattern of complaints about taking deposits and disappearing is not.
4. Search Public Records
Many states publish contractor complaints and disciplinary actions online. Check your state licensing board for any formal complaints filed against them.
You can also search court records for civil judgments. Someone who's been sued multiple times for not completing work is showing you exactly who they are.
5. Check Community Platforms
Platforms like DNounce allow people to share firsthand experiences with contractors, landlords, and other service providers. Unlike Google or Yelp — where businesses can flag and remove reviews — these records go through a community review process and can't be bought down.
Search the contractor's name before you hire. If someone else has been burned, they may have already filed a record.
6. Get Everything in Writing
Before any work begins, get a written contract that includes:
- Detailed scope of work
- Payment schedule tied to milestones (NOT a large upfront deposit)
- Start and estimated completion date
- Materials to be used
- What happens if the work isn't completed
In most states, contractors can only legally request a deposit of 10–15% upfront. Anyone asking for 50% or more before starting work is a major red flag.
7. Never Pay in Cash
Always pay by check or credit card. Cash payments leave no paper trail and give you zero recourse if the contractor disappears. A credit card gives you the ability to dispute the charge.
The Bottom Line
Most contractor scams are preventable. A licensed, insured contractor with verifiable references and a clean record is not hard to find — it just takes 20 minutes of research before you sign anything.
If you've been burned by a contractor, consider filing a record on DNounce so others in your community can be warned. Every record filed makes it harder for bad actors to find their next victim.