How to Hire a Licensed Contractor in California: 9 Checks Before You Sign

A remodel is one of the largest purchases most households ever make, and while it happens you hand a stranger the keys to your home. California gives homeowners a strong set of protections, but they only help if you use them before work starts. The nine checks below target the usual trouble spots: unlicensed work, money paid ahead of progress, vague contracts and unpaid subcontractors.

The licensing and contract rules come from the state, so they apply anywhere in California. We wrote this with San Jose and Bay Area homeowners in mind.

Why the license matters

Contractors in California are licensed by the Contractors State License Board (CSLB). Since January 1, 2025, a license is required for any job where labor and materials together come to $1,000 or more. Below that amount there is a narrow exemption, and it disappears if the work needs a building permit or if the person hires anyone to help (CSLB bulletin 24-07 (opens in a new tab)). In practice, almost every remodel needs a licensed contractor.

The license is more than a piece of paper. It ties the contractor to a license bond, to workers’ compensation requirements and to a complaint process run by the state. Hiring someone unlicensed means giving most of that up.

Before you call

1. Verify the license

Look the contractor up on the CSLB website (opens in a new tab) or call (800) 321-CSLB (2752). Check four things:

• The name and license number match the contract, the estimate and the contractor’s advertising.
• The status is active.
• The classification fits your project. A general building contractor classification covers projects that combine several trades. Specialty classifications cover single trades such as plumbing, electrical or tile.
• The record shows the current bond and workers’ compensation information.

2. Confirm the bond and the insurance

California contractors must carry a $25,000 license bond. It protects consumers harmed by defective construction or by violations of the contractor license law, and employees owed wages. But it is a shared pool that covers all of that contractor’s jobs during the bond’s term, not a per-job amount, and it is a surety bond rather than an insurance policy (CSLB bond guide (opens in a new tab)).

Workers’ compensation insurance is required by law if the contractor has employees, and you can check the policy status on the CSLB site. General liability insurance is not required, but CSLB recommends asking about it. Ask for a certificate of insurance, and ask your own insurer whether a temporary rider on your homeowner’s policy makes sense while the work is underway.

3. Ask for references and finished work

CSLB recommends getting at least three local references, calling them, and looking at completed work. Useful questions: Did the job finish on schedule? How were surprises handled? Was the site kept clean? Would you hire them again? For a project like yours, ask for photos of similar finished work and, if you can, visit one.

Before you sign

4. Compare written bids line by line

Ask each contractor to bid the same scope, in writing, with materials named. A low bid that leaves out demolition, permits, disposal or fixtures is not low, it is incomplete.

Watch for allowances. An allowance is a placeholder amount for items you have not chosen yet, such as tile or lighting. If your choice costs more than the allowance, the price goes up. Ask what each allowance covers and whether it includes installation.

5. Read the contract for the required items

California requires a home improvement contract to be specific. CSLB’s consumer guide says it should include:

• A description of the work, specific about materials (style, brand, model, quantity, color and size)
• The price and a payment schedule
• Who will obtain the building permits, and whether permit fees are included in the price
• Start and end dates
• The contractor’s license number, address and phone number
• Cleanup and debris removal, plus any special requests
• Written warranty terms, if a warranty is offered
• Notice of your right to cancel

If something you were promised in conversation is not on the page, it is not in the contract.

6. Limit the down payment and tie payments to progress

A down payment cannot exceed the lesser of $1,000 or 10% of the contract price. The only exception is for contractors who have a blanket performance and payment bond on file with CSLB. After the down payment, the schedule should show each payment’s amount and the work it covers, and payments cannot exceed the value of the work performed.

Pay by check or another traceable method so there is a record of every payment. Avoid cash.

7. Settle who pulls the permits

The contract has to say who will obtain permits. Most remodels that move walls, plumbing or electrical need one (see our San Jose permit guide). Ask to see the permit before work that requires it begins, and make sure the inspections are scheduled and signed off as the job progresses. If a contractor suggests skipping the permit to save time or money, keep looking.

8. Put every change in writing

Any change in price must be made through a written change order that becomes part of the contract, and changes should be signed by both parties. A good change order says what changed, why, what it costs and how it affects the schedule. Do not approve extra work with a handshake or a text message you cannot find later.

After you sign

9. Protect yourself from liens, and pay the last dollar last

Even if you pay your contractor in full, a subcontractor or supplier who is not paid can file a mechanics lien against your property. CSLB’s guide suggests asking for a list of all subcontractors and suppliers with their start and finish dates, collecting lien releases as each portion of the work is completed, and considering joint checks made out to the contractor and the supplier. Contractors must also give you a Mechanics Lien Warning.

Hold the final payment until the work is finished, the punch list is complete, the final inspection is signed off and you have the last lien releases in hand.

Red flags

Questions to ask on the first call

• Who will be on site day to day, and who is my single point of contact?
• Which parts of the job do you subcontract, and to whom?
• How do you handle hidden conditions once the walls are open?
• What does the schedule look like, and what could change it?
• How and how often will you update me?
• What does the warranty cover, and who do I call if something fails?

How GLS Construction works

GLS Construction is a licensed California contractor (license #835800) and a division of General Landscaping Service, which was established in 2002. Every project begins with a free consultation, followed by 3D design and planning, material selection and construction, so you can see the plan before building starts. Our terms state that the payment structure and any warranty are agreed in writing before work begins. You are welcome to look up our license on the CSLB website, just as you would for any other contractor.

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