Home improvement contractor license

Licensing rules vary widely. Some states license contractors at the state level with exams and experience requirements; some require only registration and proof of insurance; some leave it to cities and counties. Many have a separate license or registration for work on existing homes, apart from new construction and from specialty trades such as electrical and plumbing.

Requirements can include a trade or business exam, proof of experience, general liability insurance, a license bond and sometimes a payment into a homeowner recovery fund. Many states also regulate home improvement contracts themselves, with rules such as required written terms, deposit limits and the client’s right to cancel some sales within a few days.

Working without a required license can be costly. In many states, an unlicensed contractor can’t enforce the contract or file a mechanic’s lien, may have to give back money already paid, and faces fines.

Check your state’s contractor licensing board or consumer protection agency, and your city or county, before you take work in a new area. Put your license number on estimates, contracts and invoices where your state requires it.