Don't Make These Mistakes When Hiring a Contractor!
- Phoenix S. Ayotte, Esq.
- Mar 21
- 5 min read
Updated: Apr 3
When it comes to home renovations, builds, or repairs, hiring the right contractor can mean the difference between a dream upgrade and a financial and legal disaster. Whether you’re adding a new deck, remodeling a kitchen, or fixing storm damage, you need to do your due diligence before signing on the dotted line. Here’s what you should—and should NOT—do when selecting a contractor for your home project.
In this guide, we’ll explore:
DOs When Hiring a Contractor 1. Verify the Contractor’s License ✅
In Virginia, most contractors are required to have a license from the Department of Professional and Occupational Regulation (DPOR). There are different classifications depending on the size and scope of the work. You can verify a contractor’s license by visiting the DPOR website and searching their name or business. Most of the disputes which come across my desk would have been avoided had the client looked into this beforehand and seen the suspension/complaint history, and potentially written a better contract due to what they found. Here's the site: https://www.dpor.virginia.gov/LicenseLookup
Why it matters: If you hire an unlicensed contractor, you may have no legal recourse if they perform shoddy work or take your money and disappear. In some cases, hiring an unlicensed contractor can even make YOU liable for certain violations.
Even more important: DPOR and other agencies have a transaction recovery fund homeowners can make a claim against for up to $40,000 in compensation biannually. To be eligible, a claimant must have obtained a judgment in Court against the contractor, and the contractor must have been licensed when performing work. This is especially helpful when suing a contractor who was uninsured or underinsured.
2. Verify the Contractor’s Insurance ✅
I can't emphasize this one enough. A reputable contractor should carry both general liability insurance (to cover property damage and injuries) and workers’ compensation insurance (to cover their employees if they get hurt on your property). Always ask for proof of insurance and verify it with the issuing company.
Why it matters: If your contractor lacks proper insurance and a worker gets injured, you could be on the hook for medical expenses. If the contractor damages your property and has no liability coverage, you may be stuck paying for the repairs yourself. And, most commonly, if your contractor disappears or doesn't perform the job as agreed- you can sue- but if they/their business doesn't have any assets, and there's no insurance- you may be able to recover nothing.
3. Verify Your Homeowner's Insurance ✅
Let's talk worst-case scenario: a worker falls off a ladder, damages your property, or starts a fire ... if this happens, your homeowner’s insurance might be your first line of defense.
Here’s why checking it is a smart move:
Liability Gaps – If the contractor gets hurt and doesn’t have proper insurance, they could come after your insurance (or worse, sue you). You need to know if your policy covers that.
Property Damage Coverage – If they botch the job and flood your kitchen or knock down a wall they weren’t supposed to, you want to be sure your policy covers accidental damage.
Exclusions & Fine Print – Some policies have exclusions for damage caused by unlicensed or uninsured workers. If your contractor isn’t covered, your insurance might deny a claim.
Subrogation Rights – If your insurance company pays out a claim, they might want to go after the contractor’s insurance to recover costs. But if the contractor isn’t insured, that could be a dead end.
Why it matters: Verifying your own coverage ensures you won’t be left high and dry if something goes wrong. It’s like checking your parachute before skydiving—just common sense.
4. Get Everything in Writing ✅
Before any work begins, make sure you have a detailed, written contract that outlines:
The scope of work
A timeline for completion
Payment terms
Warranty information
A dispute resolution process
Why it matters: A handshake deal is an obvious disaster waiting to happen. If something goes wrong, a written contract is your best protection. Now, in the contracting industry, it's common for sole proprietors or small business owners to be less formal about the paperwork- after all, they are in the construction industry, not the business management or legal industry. It's up to you to protect yourself and mitigate your potential future damages- because problems and disputes are entirely foreseeable.
DON'Ts When Hiring a Contractor
1. Pay in Full Upfront ❌
Reputable contractors typically require a deposit, but they should not demand full payment before any work is completed. A reasonable deposit is usually 10-30% of the total cost.
Why it matters: If you pay everything upfront, you have no leverage if the contractor fails to complete the job or disappears. Also, note that sometimes, small business owners are "robbing Peter to pay Paul" and may necessarily be using funds from your job to pay debts or workers from other current or previous jobs. In that case, your payments wouldn't even be going toward the work on your project, and if it's not completed, you are really out of luck!
2. Skip References and Reviews ❌
Ask for references from past clients and follow up with them. Read online reviews on sites like the Better Business Bureau, Google, and Yelp, and of course, the licensing authority's disciplinary authority lookup. https://www.dpor.virginia.gov/LicenseLookup
Why it matters: A contractor may seem professional when you first meet them, but their track record with other homeowners will tell the real story.
Real-Life Horror Stories Still not convinced? Here are some nightmare scenarios from homeowners who failed to follow these precautions:
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Safeguarding Your Home Against Contractor Nightmares
Hiring the right contractor requires time and diligence, but it’s well worth the effort. Protect yourself by verifying licenses, confirming insurance, getting a detailed contract, and checking references. A little upfront work can save you from a financial and legal nightmare down the road.
Need Expert Guidance?
If you’re in Virginia, Maryland, or Washington, D.C. (DMV), and need a lawyer to review home improvement contracts or address a dispute, Phoenix S. Ayotte, Esq. of Future Counsel is here to help! Resolve your contractor issues with skilled legal representation.