Consumer Awareness

Tips for Choosing and Dealing with Contractors

The information presented here is intended to be instructional and to provide information to assist the consumer in dealing with contractors. The information in this publication is believed to be accurate at the time of its production.

The State Board of Examiners of Plumbing, Heating and Fire Sprinkler Contractors assumes no responsibility for any damage that arises from any action that is based on information found in this publication. Questions regarding your legal rights and liabilities, the law and the court system should be addressed to an attorney.

The State Board of Examiners of Plumbing, Heating and Fire Sprinkler Contractors is the agency that licenses contractors who install, alter or restore plumbing, heating, air conditioning or fire sprinkler systems. Its purpose is to protect the public health, safety and welfare by prescribing the standard of competence, experience and efficiency of applicants for license by examination. It receives and investigates complaints against licensed and unlicensed plumbing, heating, air conditioning and fire sprinkler contractors. When warranted, it holds hearings on complaints against licensed contractors and can suspend or revoke a license for cause. It prosecutes unlicensed contractors through the courts.

Electrical Contractors

Electrical contractors are licensed by the:

State Board of Examiners of Electrical Contractors
3101 Industrial Dr., Unit 206
Raleigh, NC 27609

Information concerning or complaints against electrical contractors can be directed to that agency.

General Contractors

General contractors (for work of $30,000 or more) are licensed by the:

North Carolina Licensing Board for General Contractors
5400 Creedmoor Rd.
Raleigh, NC 27612

Information concerning or complaints against general contractors can be directed to that agency.


Entering a contract is a major project for most people, whether it is building a home or replacing a heating and air conditioning system.

There is no way to ensure that every person will be satisfied every time with every job done by every contractor in North Carolina. It is hoped that the information presented on these pages will increase the odds in your favor.

People who know what they are doing seldom get burned in business transactions. They shop and compare. They expect to pay more for quality products and service. They are careful about “bargains,” because, as the old saying goes, if a deal sounds too good to be true, it probably is.

If needed, ask for advice or pay for it. It may cost you time and money, but it saves grief.

Always plan carefully. Do not jump into anything.

Look Out!

Beware of any contractor who arrives at your home and announces a “serious” problem that must be taken care of immediately. Don’t be afraid to take the time to get a second opinion.

Most reliable contractors are too busy to go door to door looking for work, or to solicit business by phone (although some do distribute neighborhood flyers or promotional mailings).

Beware of special introductory offers and of salesmen who want to use your home as a “model” in exchange for a bargain rate.

Beware of fly-by-night sales pitches (“while we’re in the neighborhood” or “we have some extra materials left over from a job down the street”).

Be suspicious of any offer that is good only today.

Be suspicious of any offer to make “on the spot” repairs.

Be careful with any contractor who pushes for part or all of the payment in advance, or with any contractor who needs payment in advance to purchase equipment for the job. This is especially true if it was the contractor who initiated the contact. Smart people pay at stages of work, or when the job is complete. Some specialized, one-of-a-kind custom work requires a good faith deposit, but you should exercise good judgment when doing so.

Never fall for a “lost” or “ruined” check ploy and write another check for a job. It often results in both checks being cashed. Instead, get an address and mail the new check after you have stopped payment on the old one.

Deal with someone whose work is known. Talk to friends, neighbors, associates.

Ask for names and addresses of previous customers. Check with those people who have had work done and ask if it was satisfactory. If possible, go out and look at some work a contractor has completed for someone else.

Local building or material supply firms know the better contractors. Contractor and home-builder associations can also recommend reputable member firms.

Obtain references from material suppliers and financial institutions, if possible, to determine whether a contractor is financially responsible.

Be sure the contractor has a permanent business location and telephone number. Verify them. A contractor who operates a business out of the back of a pickup truck with a cellular telephone may be difficult or impossible to find to complete a job or fix something that has gone wrong after the last bill is paid.

Make sure the contractor has liability insurance coverage and workers compensation (if required).

Obtain at least three estimates or bids for the work you need; do not automatically accept the lowest. Remember, the cost of materials and quality will affect the bid. A low bid based on inferior materials may not be any bargain; so consider more than the price alone. Also, beware any bid substantially lower than the others.

Whether you need a contractor for general construction, plumbing, heating, air conditioning, fire sprinkler or electrical work, make sure the contractor has the appropriate license, if required (see Introduction and Licensing). You have few recourses, legal and otherwise, if you hire an unlicensed contractor. Since few unlicensed contractors have adequate insurance, they may expose you to significant financial harm in the event of injury or property damage. Although an unlicensed contractor may give you a low bid, the risks of possible financial and legal consequences you may face probably outweigh any benefits a lower bid may seem to offer.

Beware of a contractor who says he works under another contractor’s license. It is illegal for one contractor to use another contractor’s license, just as it is illegal for someone to use someone else’s driver’s license.

When you have narrowed your search down to two (2) or (3) possible contractors, call your local Better Business Bureau, your city or county building inspection department, the Consumer Protection Section of the Department of Justice (919-733-7741) and the appropriate licensing board (see Introduction and Licensing) to see if there have been serious complaints against any of them.

Finally, before you begin your project with a contractor, you may wish to consult additional information resources. The Consumer Resource Handbook put out by the federal government offers general information on making purchases and resolving complaints. To obtain free single copies, write to: Handbook
The Consumer Information Center
Pueblo, CO 81009

Anyone who contracts to install, alter or restore plumbing, heating (includes air conditioning) or fire sprinkler systems must have a license from the:
State Board of Examiners of Plumbing, Heating and Fire Sprinkler Contractors

1109 Dresser Court
Raleigh, NC 27609
*Minor repairs and service work to plumbing and heating systems do not require a state license.

In general, anyone who contracts to do general construction work where the cost of the undertaking is $30,000 or more must have a general contractor’s license issued by the:
North Carolina Licensing Board for General Contractors
5400 Creedmoor Rd.
Raleigh, NC 27612

Anyone who contracts to install, maintain, alter or restore any electrical work must have a license from the:
State Board of Examiners of Electrical Contractors
3101 Industrial Dr., Unit 206
Raleigh, NC 27609

Where there are no state license requirements, there may be local (city or county) license requirements. Your local building inspection department can tell you what these requirements are, if any.

Remember that an “oral agreement” is not worth much when things go wrong. Although any contract can become unenforceable, a written one is the best kind to have.

Remember that anything you sign could be used by a contractor as authorization to go forward with your project. This means that any bid you sign may become the contract. Do not sign anything until you completely understand what you are signing and agree to all the terms.

Never sign a blank or partially blank contract. Get a copy of the contract as soon as you sign it, and keep it for your records.

Be sure your contract contains the following: The contractor’s name, street address, phone number and license number. Start and completion dates. Although these should allow for reasonable delays, a clause allowing you to withhold payment if work slows down for no apparent reason is beneficial. If time is important, you could consider negotiating a completion date with a penalty for every day late, and a bonus if the job is finished early. A detailed description of the work to be done, a description of the materials and equipment to be used (brand names, colors, size, styles and model numbers), and a list of all costs spelled out clearly. A schedule of payments showing the amount of each payment in dollars and cents and the stage of completion at which each payment becomes due. If you want a warranty, make sure it is in writing as part of the contract. Good contractors always guarantee their work. Also, require the contractor to furnish you any written warranties offered by the manufacturers of materials or appliances that are to be installed. A guarantee that the contractor carries liability insurance and has workers compensation coverage, in case of accidents on the job. For a large remodeling job that involves many subcontractors and a substantial financial commitment, it is a good idea to specify in the contract that the contractor is responsible for obtaining lien releases from each of the subcontractors and material suppliers. Everything you feel is important to the job, including complete cleanup and removal of debris and materials and special requests for saving certain materials or appliances. A statement that the contractor will obtain all required building permits (see Permits/Inspections), and that all work will be done in accordance with all applicable building codes and inspected before final payment. A statement that all changes (added work, substitution of materials, etc.) made after the contract is signed will be written, clearly worded, and signed. As a general rule, a building permit is required whenever structural work is involved or when the basic living area of a home is to be changed. In many cases, separate permits for plumbing, heating and electrical work may be required.

The contractor should obtain the necessary building permits. This should be spelled out in your contract. Be suspicious of any contractor who asks you to obtain any permits in your name. That’s his job. It could mean that he is unlicensed or in trouble with local building inspectors for repeated code violations. Be suspicious of any contractor who says a permit is not necessary or will cost too much. It could mean that the contractor does substandard work or cuts corners.

Your local (city or county) inspection department can tell you whether a permit is required for the work to be done. If it is required, make sure the contractor shows you the permit before you allow work to begin.

Your local inspection department which issues the permit for your work will inspect the work when it is completed to make sure it complies with the building codes and regulations. Depending on the type of work done, there may be inspections while the work is in progress. Your contractor is responsible for arranging for these inspections. You should, if at all possible, be present when inspections are made, ask questions, and make frequent inspections yourself.

Remember that building codes only set minimum safety standards for work done. They do not protect you against poor quality work, and inspections are not made to determine work quality.

However, the safety standards set by building codes are for your protection. The importance of obtaining permits and inspections to ensure that safety standards are met cannot be overstated. For example, the replacement of a furnace or heating unit requires a permit and inspection. Improper heating installations which have not been permitted and inspected have caused fires, illnesses, injuries and even deaths.

In spite of all the precautions you have taken, problems will sometimes occur with the work that was done on your home. If problems do occur, either during construction or afterward, contact your contractor. Usually he or she will make corrections willingly. You may contact the local building inspector for assistance in resolving code violations.

Be sure to address all problems or complaints directly to the contractor in writing so that you both have a record. Should the contractor refuse to make corrections, you can file a complaint in writing with the appropriate licensing board (see Introduction and Licensing). Although in most cases a licensing board cannot obtain restitution for you, its involvement with your complaint will sometimes motivate a licensed contractor to try and resolve the matter. You may also want to file a complaint with your local Better Business Bureau and the Consumer Protection Section of the Department of Justice (919)733-7741.

Small Claims Court is another alternative if the dispute involves a sum within its jurisdiction. The Small Claims Court is located at your nearby Courthouse. If necessary, consult an attorney.