Inviting a contractor into one’s home for a remodeling project is a big deal. Hiring the wrong contractor can create huge problems down the road. We’ve all seen news stories of shady contractors who scam senior citizens and run with their money. That is probably a worst case scenario, but a number of other things can go wrong. If a job is done incorrectly, it will either look funny or require expensive repairs. Legal and financial issues can arise. Contractors have access to your personal space and can easily steal valuables. Remember the trust that is being given to these people when hiring them.

Licensing
Before hiring a contractor, find out what the local laws are. Learn what paperwork a contractor who works in the area needs to have, and don’t just take their word for it. Require the proof of actually seeing it or getting a copy, and make sure it’s valid.

Workers’ Compensation Insurance
This insurance is legally required in most, though not all, cases. To be safe, the best bet is hiring a contractor who has it. If one of the contractors’ employees gets hurt and he doesn’t have this insurance, the homeowner could be declared legally and financially responsible for the injury.

Building Permits
Make sure that the contractor will pull all of the required building permits. Many don’t like to do this because it takes extra time or they are trying to hide the fact that they don’t have a license. Building permits show that things are done legally, and they are often required to remain covered by homeowner’s insurance during and after remodeling.

Lien Waivers
A written lien waiver is proof that the contractor has been paid in full. After the remodeling job is complete, he should be able to give one stating that he has been paid and any remaining bills for subcontractors and supplies are his responsibility. Ask about this before hiring a contractor.

Liability Insurance
A contractor should have liability insurance to cover any repairs that might need to be made if they damage the home. Hiring a contractor without insurance is asking for trouble.

References
The contractor should be able to give a number of references from work that was done within the past year. Also, ask for a financial reference before hiring him. This could be his banker or business accountant. Disappearing in the middle of a project or declaring bankruptcy after the homeowner has paid does happen.

Infractions
There are local government agencies that track infractions that are issued to contractors. If he has gotten it trouble for doing things illegally, it may be listed there. Look for this service in your area and check out potential candidates.

Deposits and Payments
If he wants a deposit upon hiring for the work that is to be performed, it should not be more than ten percent or $1000, whichever is lower. This is an important measure for protecting oneself. Payments are usually make on a regular schedule as the work is done. The last payment should not be made until the work is finished.

Guarantee
Reputable contractors guarantee their work for a minimum of a year after it was finished. Find out about his policy of guaranteeing work before hiring him.