DoorFly.com: 10 Laws to Protect You Against Bad Contractors

States and local governments are those primarily responsible for regulating the contractors operating within their jurisdiction. The laws vary from state to state and city to city, but you will find a variety laws in place to protect consumers from unethical contractor practices.

Contractor registration. Many states now require contractors to register. Contractor registration requirements vary from simply providing basic contact data to testing and background checks. This provides a consumer with the ability to at least verify an individual as being on record with the state government.
Contractor notices. Each state requires contractors to notify their clients about certain rights. When and how those notices are provided are strictly detailed out in the law. One of the most common contractor notices is the pre-lien notice. This informs the client of the contractors right to file a lien against their property if they don’t receive payment for work done.
Lien rights. As mentioned above, contractors who perform work on real property are entitled to file liens against the property, if they are not compensated for their work. Lien laws also detail out when and how a lien must be filed. This helps protect consumers from frivolous liens being placed upon their property.
Building codes. States, counties and cities each have their own set of building codes. Many of these codes have been set in place to insure that buildings are constructed safely and will meet minimum construction standards.
Building permits. Permits fill a similar function as the codes. Certain items are required from your contractor before a permit will be issued to do the work. In addition, the permit makes inspectors aware that a project is progress that will need their stamp of approval before completion.
False advertising. Laws regarding company advertising are also in place to protect the consumer against bad contractors. Most states require that contractors include their registration or license number in all their advertising. This assists consumers in reporting false claims or other issues with contractors.
Contract requirements. States also protect consumers with laws that require written contracts to be put in place for home improvements. These laws are generally very specific about what items must be included in the contract to meet the state’s minimum requirements.
Contractor licensing. Some states go beyond contractor registration to the more thorough process of contractor licensing. Contractor licensing usually requires some testing of an individuals knowledge of their field of work, state regulations and basic business practices.
Bonding and insurance requirements. When laws require bonding and insurance policies be held by your contractor, this protects consumers as well. If a loss should occur as a result of a contractor’s work on your project, these protections insure that you will have resources available to cover those losses.
Excessive down payments. Some states have put limits on the amount a contractor can request in payment prior to, or at the signing of, a contract. This limits the losses to a consumer should the contractor not perform the work as expected.

It is unfortunate that many reputable businesses must deal the long lists of regulations necessary to protect the public from those few contractors who do not operate lawfully.