How to Hire a Contractor in Texas: A Homeowner's Vetting Checklist

Every contractor's truck says the same two words: "licensed and insured." In Texas, one of them is close to meaningless. There is no statewide license for a residential general contractor here — no state exam, no state license number to look up, no state board that vetted the person about to open up your walls. So when a remodeler tells you they're "licensed," the honest question is: licensed to do what, and by whom?

Hiring well in Texas isn't about finding the right license. It's about verifying the specific things that are verifiable — the insurance, the state-licensed trades, the contract, the paper trail. Here's the checklist we'd run ourselves, written for homeowners in Allen, Plano, Frisco, McKinney, and Prosper.

First, know what "licensed" does and doesn't mean here

Texas is one of the few large states with no statewide license for general contractors. The person coordinating your remodel or addition doesn't answer to a state licensing board the way a real estate agent or a master electrician does. Contracting is regulated at the city level — many Collin County cities require a contractor to register, and show proof of insurance, before they can pull a permit — while the specialty trades are licensed by the state.

That one fact reshapes everything. You can't lean on a license number that doesn't exist; you have to check the things below yourself. The good news: they're all checkable in an afternoon.

Verify the trades that ARE state-licensed

Here's the nuance that trips people up. Your general contractor has no state license — but the people touching your wiring, pipes, and gas do, and those licenses are real, current, and searchable.

• Electricians are licensed by the Texas Department of Licensing and Regulation (TDLR). Everyone from apprentice to master electrician holds a TDLR number you can verify.
• HVAC — air conditioning and refrigeration — contractors are also licensed by TDLR, under a separate program.
• Plumbers answer to a different body entirely: the Texas State Board of Plumbing Examiners (TSBPE), not TDLR. Classes run from apprentice up to Responsible Master Plumber.

The move: ask who is actually performing the licensed work, get names or license numbers, and confirm each is active — electricians and HVAC on TDLR's public license search, plumbers on the TSBPE site. A contractor who can't tell you which licensed plumber is running your gas line is one who may be planning to hand it to someone who isn't licensed at all.

Get a Certificate of Insurance — and call the carrier

Ask for a Certificate of Insurance (COI) showing two things: general liability (damage to your home) and workers' compensation (injuries to the crew). Then do the part almost nobody does: verify it with the carrier. A COI is a PDF — PDFs get edited, and policies lapse. Call the agent listed on it, confirm the policy is active and covers this kind of work, and ask to be named as an additional insured.

Workers' comp deserves special attention in Texas, because Texas is the only state where private employers can legally skip it. A contractor here can run entirely without workers' comp and still be operating legally. That matters to you: if an uninsured worker is hurt on your property, the fallout can land on your homeowner's policy — or on you. Verify the coverage is real; don't assume the crew is covered.

"Bonded" is not "licensed" — ask what the bond covers

Because there's no state GC license, there's also no statewide contractor bond. "Bonded" usually means the contractor carries a surety bond, sometimes one a city requires in order to register. It's a fair thing to ask about — an insured and bonded contractor is a reasonable baseline — but understand what it is: a bond is a limited financial backstop, not proof of skill and not a substitute for the insurance and contract checks above. Ask what the bond actually covers, and for how much.

Demand a written, fixed scope and a milestone payment schedule

The contract is where most remodeling nightmares are won or lost. You want a written, fixed scope — rooms, materials, allowances, and finishes spelled out — tied to a payment schedule keyed to milestones, not the calendar. Draws should follow completed, inspectable work: a piece at demo, at rough-in, at drywall, at substantial completion, with a final portion held back until the punch list is done.

What you don't want is a large deposit before anyone lifts a hammer. Texas sets no legal cap on deposits, so this is on you to negotiate — but your money isn't unprotected. Under the Texas Construction Trust Fund Act (Property Code Chapter 162), payments you make for work on your home are legally trust funds, the contractor is the trustee, and diverting that money to another job instead of paying for yours can be a criminal offense. A modest deposit to secure materials and a start date is normal; handing over a third of the job up front is not. If you want to sanity-check the overall number first, ballpark it with our cost estimator.

Make lien waivers part of every check you write

This is the step homeowners skip and later regret. In Texas, an unpaid subcontractor or supplier can put a lien on your home — even for work you already paid your contractor for. Your defense is a paper habit: collect a lien waiver from the contractor (and, on bigger jobs, from key subs and suppliers) tied to each payment, hold the statutory 10% retainage for 30 days after completion, and get a final bills-paid affidavit before the last check. A contractor who treats lien waivers as routine is telling you they run a clean payment chain. One who bristles at them is telling you something too.

Ask for references with real addresses — then go look

Anyone can print a testimonials page. Ask instead for three recent jobs with real addresses, ideally similar in scope to yours, and actually drive by. Better still, ask to speak with those owners: Did the crew show up? Did the number at the end match the number in the contract? Were change orders handled in writing? A remodeler proud of their work hands this over without flinching. Photos are nice; a homeowner two neighborhoods over who'll take your call is worth ten of them.

Confirm the contractor pulls the permits — in their own name

Ask one question and listen closely: "Who pulls the permit?" The right answer is always "we do, in our name." When the contractor pulls the permit, they put their name on the accountability line, and the city's inspectors become a second set of eyes on the work.

Watch for the dodge. In Allen, a contractor who asks you to pull the permit as the homeowner is asking you to sign a Homeowner's Affidavit — which shifts liability for the work onto you and lets them off the hook. Cities handle this differently: Frisco requires contractors to register with the city before they can even submit for a permit; Prosper charges a $300 nonrefundable application fee on new homes and requires engineered plans for additions over 400 square feet; Plano and McKinney run their reviews through online portals on their own timelines. A contractor who works your city regularly knows these rules cold. Our guide to building permits in Collin County walks through each one.

Know your rights after you sign: the RCLA

One more thing worth knowing before you hire, because it shapes how you'll handle a dispute. Under the Texas Residential Construction Liability Act (Property Code Chapter 27), if a defect shows up you generally can't just sue — you must first send the contractor written notice by certified mail at least 60 days before filing, and the contractor has the right to inspect and make a written offer to repair. This "right to cure" cuts both ways: it protects good contractors from ambush lawsuits, and it gives you a structured, on-the-record path when something is genuinely wrong. Keep every contract, change order, and text in one place so the process is ready when you need it.

The Collin County hiring checklist

Before you sign anything:

1. Skip the "licensed" claim — there's no state GC license to verify.
2. Verify the state-licensed trades — electricians and HVAC at TDLR, plumbers at TSBPE.
3. Get a COI and call the carrier — general liability + workers' comp, active, you as additional insured.
4. Understand "bonded" — ask what the bond covers and for how much.
5. Insist on a fixed written scope and a milestone payment schedule, with a modest deposit.
6. Require lien waivers with every payment, and hold 10% retainage.
7. Check three references with real addresses — and go look.
8. Confirm the contractor pulls the permits in their own name.

Hire the whole picture, not a license number

The reason "licensed" fails as a filter in Texas is the same reason single-point accountability matters so much here: with no state gatekeeper, the burden of vetting falls on you, and the best protection is one insured, accountable party standing behind the entire job. The Remo Guys is an insured and bonded design-build general contractor based in Allen, serving Allen, Plano, Frisco, McKinney, and Prosper — one team from design and permits to the final build. If you'd like a straight answer on how we handle contracts, insurance, and permits, request a consultation and we'll walk you through all of it.

This article is general information for Collin County homeowners and is not legal advice. For a specific contract or dispute, consult a licensed Texas attorney.