How do I verify a contractor's license in California?

Go to cslb.ca.gov and use the license lookup tool — you can search by license number, business name, or the contractor's name. The result will show whether the license is active, what classification it carries, and whether there are any disciplinary actions on record. Always check this yourself rather than relying on a copy of the license the contractor provides, since licenses can lapse or be suspended after a copy is printed.

Is it legal for a contractor to ask for a large deposit before starting work?

In California, home improvement contracts are governed by the Contractors State License Board, which limits the initial deposit to 10% of the total contract price or $1,000 — whichever is less. Demanding more than that upfront is a violation of state law and a common warning sign. Progress payments tied to completed phases of work are normal and legal; a large lump-sum deposit before any work begins is not.

What should a written construction contract include?

At minimum: the contractor's name, address, license number, and insurance information; a detailed description of the work to be performed; the materials and brands specified; the total price and a payment schedule tied to milestones; the estimated start and completion dates; and a process for handling changes to the scope of work. California law requires written contracts for home improvement projects over $500, and the contract must include a three-day right to cancel. If any of those elements are missing, ask for them before signing.

What's the difference between a general contractor and a subcontractor, and why does it matter?

A general contractor holds the primary contract with you and takes legal responsibility for the overall project, including managing and paying any subcontractors they bring in. Subcontractors — electricians, plumbers, framers, tile setters — work under the general contractor's direction and typically don't have a direct contract with you. This matters because if a subcontractor isn't paid by the general contractor, they can file a mechanic's lien against your property even though you paid the GC in full. A reputable general contractor will provide lien releases from subcontractors as work is completed and paid.

How To Choose a General Contractor in (Without Getting Burned)

Hiring the wrong general contractor in Sacramento can cost you tens of thousands of dollars, months of delays, and a home that doesn’t pass inspection. The short answer to avoiding that: verify the license before you sign anything, get at least three itemized bids, and never pay more than 10% (or $1,000, whichever is less) as a deposit under California law. Everything else below helps you apply those rules to a real hiring decision.

Why Sacramento’s Market Makes This Harder Than It Looks

Sacramento’s construction market has been running hot. The region’s population growth, the post-pandemic renovation surge, and a steady pipeline of infill development in neighborhoods like Oak Park, Natomas, and Midtown have stretched contractor availability thin. When demand outpaces supply, two things happen: legitimate contractors get booked out months in advance, and less scrupulous operators, or outright unlicensed crews, step into the gap.

The Valley’s climate adds another wrinkle. Sacramento’s hot, dry summers followed by wet winters create a specific rhythm of damage: slab leaks from clay soil movement, roof failures after the first hard rain of the season, and moisture intrusion in older Craftsman and mid-century homes that weren’t built with modern vapor barriers. A general contractor who works regularly in the region will understand those patterns. One who doesn’t may underbid a job because they missed what Sacramento’s soil or housing stock actually requires.

The Five Things to Verify Before You Sign

Think of this as your pre-contract checklist. Skip any one of these and you’re taking on risk that’s entirely avoidable.

License status through the CSLB. Every general contractor in California must hold an active license issued by the Contractors State License Board. Go to cslb.ca.gov, search by license number or business name, and confirm the license is current, in good standing, and covers the work you need (Class B for general building). Takes about two minutes.
Workers’ compensation and general liability insurance. Ask for certificates of insurance naming you as an additional insured. If a worker is injured on your property and the contractor has no workers’ comp, you can be held liable. This is not a formality.
A physical business address. A contractor who operates only from a cell phone and a P.O. box is harder to hold accountable if something goes wrong. Look for a verifiable address, not just a suite number at a UPS Store.
References from comparable projects. A contractor who has done excellent work on kitchen remodels may not have the subcontractor relationships to manage a ground-up new construction. Ask for references from projects similar in scope and dollar amount to yours, and actually call them.
A written, itemized bid. Vague bids protect the contractor, not you. The bid should break out labor, materials, subcontractor costs, and allowances separately. If two bids are far apart, the difference is almost always in what one contractor included and the other left out.

How to Read a Bid (and Spot the Red Flags)

Three bids is the standard advice, and it’s good advice, but only if you know what you’re comparing. A low bid isn’t automatically a good deal. Here’s what to look for:

Allowances that are too low. Allowances are placeholders for items not yet selected (tile, fixtures, cabinets). A contractor who sets allowances unrealistically low wins the bid on paper, then hits you with change orders once you’ve signed and selections are made. Compare allowances across bids, not just totals.
No mention of permits. In Sacramento, most structural work, electrical, plumbing, and HVAC work requires a permit from the City or County. A bid that doesn’t include permit fees either forgot them (a mistake) or is planning to skip them (a serious problem). Unpermitted work can block a home sale, trigger fines, and leave you holding liability for code violations.
A large upfront deposit demand. California law limits deposits to 10% of the contract price or $1,000, whichever is less, for home improvement contracts. A contractor who pushes for 30–50% upfront before work begins is either cash-flow troubled or operating outside the law.
Pressure to decide immediately. Legitimate contractors are busy. They don’t need to manufacture urgency. If you’re being told the price is only good for 24 hours, that’s a sales tactic, not a reflection of material costs.

What Not to Do (Even When You’re Tempted)

A few mistakes show up repeatedly in contractor disputes. Avoid them regardless of how good a deal seems.

Don’t pay in cash with no paper trail. Cash payments make it nearly impossible to document what you paid for and when. Use checks or traceable transfers, and get receipts tied to specific line items.

Don’t let the contractor pull permits in a way that hides the work from you. You have the right to know what permits are open on your property. Ask for permit numbers and check them with the City of Sacramento’s permit portal or Sacramento County’s system, depending on your address.

Don’t skip the contract because you trust someone. A handshake deal with a neighbor’s recommendation is still a handshake deal. California requires written contracts for home improvement projects over $500. If a contractor resists putting terms in writing, that resistance is information.

Don’t assume “licensed” means “insured.” The CSLB tracks license status, not insurance currency. A license can be active while a policy has lapsed. Always verify insurance separately and directly.

When You’re Doing New Construction or a Major Remodel

The stakes are higher on ground-up new construction and whole-home remodels, and the contractor selection process should reflect that. A few additional considerations:

For new construction, your contractor will be managing a web of subcontractors, framing crews, electricians, plumbers, HVAC installers, roofers, and coordinating inspections at each phase. Ask specifically how they manage that schedule and what happens when a sub falls behind. Sacramento County and the City of Sacramento both have active inspection requirements, and a contractor who doesn’t have a working relationship with local inspectors will cost you time.

For major remodels, particularly in older Sacramento neighborhoods where homes may date to the 1920s through 1960s, ask about the contractor’s experience with lead paint and asbestos protocols. Disturbing materials in pre-1978 construction without proper containment isn’t just a health issue, it’s a regulatory one, and the liability falls on whoever did the work.

For home remodeling projects that touch multiple systems (a kitchen remodel that moves plumbing and opens a wall, for example), make sure the bid reflects the full scope of what’s behind the walls, not just the finish work you can see.

Making Your Final Decision

After you’ve verified licenses, compared itemized bids, checked references, and confirmed insurance, the final decision usually comes down to communication. The contractor you hire will be in your home or on your property for weeks or months. How quickly do they return calls? Do they explain things clearly or get defensive when you ask questions? Do they have a project manager you’ll actually be able to reach?

Those soft factors matter, but they come after the hard verification, not instead of it.

If you’re starting a general contracting, home remodeling, or new construction project in the Sacramento area and want to talk through scope and timeline before committing to anything, TDI USA, Inc. is available at (877) 688-0866. No pressure to sign on the first call, just a straight conversation about what your project actually requires.