Hiring a Contractor or Remodeler:  What you should know

Do your homework
While the law provides some protection from fraudulent or incompetent contractors, it doesn’t
guarantee honest transactions or perfect performance.  If you’re planning to hire a contractor or
remodeler, shop smart and do your homework.

Generally, work that “adds to or subtracts from real estate” requires a registered contractor.
Businesses that provide services such as gutter cleaning, pruning, lawn care or window
washing do not need to be registered.

What does the law require?
In Washington, all contractors who perform work, advertise or submit bids or proposals in
this state must be registered with the Department of Labor and Industries, post a bond and
carry general liability insurance coverage.

A general contractor must maintain a $12,000 bond. A specialty contractor, such as a painter,
must maintain a $6,000 bond. Dissatisfied consumers may pursue restitution with civil action
in Superior Court against a contractor’s bond.

All registered contractors must carry general liability insurance coverage  ($50,000 property
damage and $200,000 public liability or $250,000 combined single limit).

Contractors are also required to have a current business license. If the contractor has
employees, he or she must have a federal employer identification number (EIN) and
industrial insurance. (The identification number is optional for a sole proprietorship
with no employees.)

A contractor is required to provide a disclosure statement to the consumer/ property owner for a
residential project with a projected cost of $1,000 or more, and a commercial project of $1,000
to $60,000.  Except for the licensing of electricians and certification of plumbers, there isn’t a
competency test to become a contractor in Washington State.

Before you hire a contractor or remodeler:
1. Plan your project carefully. If you know what you want done and can clearly explain it, you’re
less likely to misunderstand instructions or encounter cost overruns.
2. Interview several qualified registered contractors and solicit written bids.
3. Verify potential contractors’ registration online at:
4. Ask for references and then check them out. If possible, view the work, interview the
homeowner and visit a site with work in progress.
5. Ask for references of suppliers that the contractor works with and check out his or her
payment record.
6. Evaluate all the aspects of the bids, including the scope of work, warranties, references, time
frames and price.
7. Request the contractor post a performance bond for the entire cost of the project if it is more
than $6,000.
8. Try to anticipate problems and inconveniences, such as cost overruns or cleanup, and come
to agreement with your contractor on how they will be handled before he or she begins work.

Once you have chosen a contractor or remodeler:
1. Obtain a written contract that includes price, payment terms, sales tax, permit fees (if
applicable), the specific work to be performed, materials to be used, warranties and payment
schedules. It is also a good idea to include change-order processes, final review and sign-off
procedures and cleanup.
2. Ask for a disclosure statement prior to work starting. Sample disclosure statements are
available on the L&I web site and at local L&I offices.
3. Make frequent inspections and consult your local building department about required
permits. Make sure that all permits are in place and that inspections are in order.
4. When advancing money for materials, it may be possible to make checks payable to  both
the contractor and the supply house.
5. Put all change orders in writing and ask questions as work progresses. Avoid verbal
contracts, and be very cautious about paying for incomplete work.

Be wary of contractors who:
Provide credentials or references that can’t be verified.

Offer a special price only if you sign today, or use other high-pressure sales techniques.

Only accept cash, require large deposits or the entire costs up front, or ask you to make the
payment in their name.

Do not provide a written contract or complete bid.

Ask you to pick up the building permit. In most instances, the contractor is required to take out
the permits. Permits are your protection and help ensure that work will meet local building
codes.

Offer exceptionally long warranties.

Want to do most or all the work on weekends and after-hours.

Give you an offer that sounds “too good to be true.”