7 Red Flags When Hiring a Contractor in NYC (And How to Avoid Them)

Hiring the wrong contractor in NYC can cost you tens of thousands of dollars, months of delays, and enormous stress. After 25+ years in the business, we have seen every mistake homeowners make. Here are the seven biggest red flags to watch for — and what to look for instead.

1. No NYC Home Improvement License

In NYC, any contractor performing home improvement work must hold an active NYC Home Improvement Contractor (HIC) license issued by the Department of Consumer and Worker Protection. This is non-negotiable. Verify the license at nyc.gov before signing anything. An unlicensed contractor cannot legally pull permits, which means your project will either skip permits (illegal) or use another entity's license (also illegal).

2. No Written Contract

NYC law requires a written contract for any home improvement project over $500. The contract must include the total price, payment schedule, start and completion dates, a detailed scope of work, and the contractor's HIC license number. If a contractor is reluctant to put the terms in writing, walk away.

3. Demands Full Payment Upfront

A legitimate contractor will work with a reasonable payment schedule tied to project milestones. A common structure is 10-20% deposit, 30% at rough-in, 30% at finish stage, and 10-20% at completion. Any contractor who demands 50% or more upfront is either undercapitalized or planning to disappear.

4. No Insurance Certificates

At minimum, your contractor should carry general liability insurance ($1M-$2M minimum for NYC) and workers' compensation insurance. Request a Certificate of Insurance and verify it is current. In co-ops and condos, the building will require being named as additionally insured — if your contractor cannot provide this, they cannot work in most NYC buildings.

5. No References or Portfolio

Ask for at least three recent references in NYC and follow up with every one. Ask about timeline accuracy, communication, quality, and whether there were unexpected costs. A contractor with 25+ years of experience should have plenty of happy clients willing to vouch for them.

6. Extremely Low Bid

If one bid is 30-40% lower than the others, something is wrong. The contractor may be planning to cut corners on materials, use unlicensed subcontractors, skip permits, or hit you with change orders once the project is underway. In NYC construction, you generally get what you pay for.

7. Poor Communication From Day One

If a contractor takes days to return your call, is vague about timelines, or cannot clearly explain the scope of work during the estimate phase, it will only get worse once construction starts. Good communication is the single best predictor of a successful renovation experience.