After 20 years as a licensed general contractor in Florida, I've seen the results of good contractor choices and bad ones. As a realtor, I've also seen how poor renovation work affects home values at resale. The contractor you choose can be the difference between a project that adds $50,000 in value and one that costs you $50,000 to fix.
Red Flag #1: No License or Insurance
In Florida, any construction project over $1,000 requires a licensed contractor. Yet I regularly encounter homeowners who've hired unlicensed workers for significant renovations. The risks are enormous: no workers' compensation means you're liable if someone is injured on your property, no general liability means damage to your home comes out of your pocket, and work done without permits can create serious legal issues when you try to sell.
What to do: Verify your contractor's license at myfloridalicense.com. Ask for a certificate of insurance showing general liability (minimum $1 million) and workers' compensation coverage. Any legitimate contractor will provide these without hesitation.
Red Flag #2: Demanding Large Upfront Payments
Florida law limits contractor deposits to 10% of the contract price or $1,000, whichever is less, for projects without a payment schedule tied to milestones. A contractor who demands 50% upfront or asks for cash payments is either financially unstable or planning to disappear.
What to do: Structure payments around completion milestones. A typical arrangement might be 10% at signing, 30% when materials are delivered, 30% at rough-in completion, and 30% at final completion and inspection. Never pay the final installment until all punch list items are resolved.
Red Flag #3: No Written Contract
A handshake deal might feel friendly, but it's a recipe for disputes. I've been called in to assess renovation projects gone wrong, and the single most common factor is the absence of a detailed written contract.
What to do: Your contract should include a detailed scope of work (not just 'kitchen renovation' but specific materials, fixtures, and finishes), a project timeline with start and completion dates, a payment schedule tied to milestones, a change order process, warranty terms, and a dispute resolution clause. If a contractor tells you 'we don't need all that paperwork,' find another contractor.
Red Flag #4: No Permit Discussion
If your contractor doesn't mention permits, either they don't plan to pull them or they don't understand the building code. Both are problems. Unpermitted work can result in fines, required demolition and reconstruction, and difficulty selling your home. Title companies and buyer's agents routinely flag unpermitted improvements, and they can kill a sale.
What to do: Ask specifically which permits will be required for your project, who is responsible for pulling them, and how inspections will be scheduled. Your contractor should handle this process as part of their service.
Red Flag #5: Unusually Low Bids
When one bid comes in 40% below the others, that's not a bargain—it's a warning sign. The contractor is either planning to cut corners on materials, doesn't understand the full scope of work, or plans to hit you with change orders once the project is underway.
What to do: Get at least three bids for any significant project. If there's a wide range, ask each contractor to explain their pricing. The differences are usually in material quality, labor approach, or scope interpretation. The lowest price is almost never the best value.
Red Flag #6: No References or Portfolio
An established contractor should have a portfolio of completed work and be happy to provide references from recent clients. Reluctance to share references suggests either they're new (which isn't necessarily bad, but you should know) or their past clients aren't satisfied.
What to do: Ask for three to five references from projects similar in scope to yours, completed within the last two years. Actually call them. Ask about communication, timeliness, budget adherence, and whether they'd hire the contractor again. If possible, visit a completed project in person.
Finding the Right Fit
Beyond avoiding red flags, look for a contractor who communicates clearly and promptly, is willing to explain their process and answer your questions, has experience with your specific type of project, understands local building codes and climate considerations, and treats their subcontractors and suppliers with respect—how they treat others tells you how they'll treat you when problems arise.
The right contractor is an investment in your home's value and your peace of mind. Take the time to vet them properly, and you'll avoid the costly mistakes I've spent two decades helping homeowners recover from.
