Hiring a Contractor in Kentucky: What to Ask Before You Sign

The relationship you have with your contractor is one of the most important and most risky relationships you will ever have as a homeowner. You are handing someone the keys to your biggest financial asset and trusting them to do right by your family, your money, and the roof over your head. When it goes well, it is one of the most rewarding experiences in homeownership. When it goes wrong, it can cost you tens of thousands of dollars, years of stress, and the kind of heartbreak that makes people swear they will never build or renovate again.

I am writing this guide because I am a licensed General Contractor, and I have seen too many homeowners get burned. I have taken calls from people mid-project whose contractor disappeared with their deposit. I have walked into homes where work was done without permits, without inspections, and without any regard for code. I have seen shoddy framing hidden behind fresh drywall and plumbing that would fail the first hard freeze.

The uncomfortable truth is that I am a contractor telling you how to vet contractors, and I think that is exactly why this guide matters. I know what good looks like because I do this work every day. I also know every shortcut, every excuse, and every red flag, because I have seen them all from the inside. My goal is to give you the tools to protect yourself so that whether you hire me or someone else, you end up with a contractor who earns your trust and delivers what they promised.

Kentucky's Licensing Reality: Why Vetting Matters Even More Here

Here is something most people do not realize: Kentucky does not require a statewide general contractor license for residential construction. Unlike states such as Tennessee, Virginia, or California, there is no state board you have to pass through to legally call yourself a contractor in Kentucky. Some cities and counties have their own local licensing requirements, particularly in Lexington-Fayette County and Louisville, but in much of Central Kentucky and the rural counties I serve, there is no formal licensing barrier at all.

What does that mean for you? It means that literally anyone can print business cards, put up a Facebook page, and start calling themselves a general contractor tomorrow. There is no exam, no background check, no proof of insurance, and no minimum experience required at the state level. That is not necessarily a bad thing for skilled tradespeople who have been building homes for decades, but it creates a wide-open door for inexperienced or dishonest operators to take advantage of homeowners who assume that the word "contractor" comes with some kind of built-in credential.

This makes your vetting process the only real safeguard you have. The state is not doing it for you. You need to do it yourself, and you need to do it thoroughly.

What to Ask Before You Hire a Contractor

Before you sign anything or hand over a dollar, here are the questions you should be asking every contractor you are considering. Do not feel awkward about asking them. A good contractor will expect these questions and answer them without hesitation. If someone gets defensive or evasive, that tells you everything you need to know.

1. Are you licensed and insured? Even though Kentucky does not require a state license, ask if they hold any local licenses and, more importantly, get proof of insurance. You need to see both workers' compensation coverage and general liability insurance. If a worker gets hurt on your property and the contractor has no workers' comp, you could be liable.
2. Can I see your insurance certificate? Do not just take their word for it. Ask for a current certificate of insurance, and then call the insurance company directly to verify it is active. Certificates can be forged or expired. A two-minute phone call can save you from a catastrophic liability situation.
3. Do you pull permits? A contractor who skips permits is cutting corners, full stop. Permits exist to make sure the work is inspected and meets building code. Unpermitted work can create safety hazards, tank your home's resale value, and cause insurance problems down the road. If they say permits are not necessary or they do not bother with them, walk away.
4. Can I see three recent projects similar to mine? Photos are great, but even better is driving by a finished project or walking through one. You want to see work that is comparable in scope to what you are planning, whether that is a full renovation or a new construction build.
5. Can I talk to your last three clients? Not your best three. Your last three. Anyone can cherry-pick a glowing reference. You want to hear from the most recent clients, because that reflects the contractor's current quality of work, reliability, and communication. Ask those references specific questions: Did the project come in on budget? On time? How did the contractor handle problems?
6. Who will be on site managing the work day to day? Some contractors juggle multiple projects and rarely show up in person, leaving a crew or subcontractors to make decisions. Know who your daily point of contact will be and how often the contractor personally visits the site.
7. What is your payment schedule? Never pay more than 10 to 15 percent up front. Payments should be tied to milestones, not arbitrary dates. More on this below.
8. What does your contract include? You are looking for a detailed scope of work, a project timeline, a payment schedule, and a clear change order process. If the contract is vague or missing any of these, ask for revisions before you sign.
9. What happens if you go over budget or over timeline? Every project has surprises, especially renovations on older homes. A good contractor will have a straightforward answer for how overages and delays are handled. A bad one will dodge the question or give you a blanket promise that it will not happen.
10. Are your subcontractors also insured? Your general contractor probably does not do every trade in-house. They hire electricians, plumbers, HVAC technicians, and others. Those subcontractors should carry their own insurance. If a sub causes damage or gets injured and they are uninsured, the liability can fall on you.

Red Flags That Should Stop You Cold

If you encounter any of these during the bidding or early conversation phase, consider it a serious warning sign. One flag might be explainable. Two or more and you should be looking for a different contractor.

• Asks for 50 percent or more up front. This is the single most common pattern in contractor fraud. A large up-front payment gives them little incentive to come back and finish the work, and if they disappear, your money goes with them.
• No written contract. A handshake deal has no legal protection for either party. If there is no contract, there is no project.
• No insurance or will not show proof. This is non-negotiable. Walk away.
• Will not pull permits. This puts your safety, your investment, and your future sale at risk.
• No physical business address. A P.O. box alone is not enough. Legitimate contractors have a real business presence you can verify.
• Pressures you to decide immediately. High-pressure sales tactics have no place in residential construction. A good contractor wants you to make an informed decision, not a rushed one.
• Cannot provide references. Everyone has to start somewhere, but if someone claims years of experience and cannot produce a single reference, something does not add up.
• Shows up to the estimate in a rush and does not measure or take notes. Accurate estimates require accurate measurements. If they are just eyeballing it, their bid is a guess, and guesses lead to change orders.
• Drastically undercuts every other bid. If one bid comes in 30 or 40 percent below the others, that is not a deal. That is either a contractor who does not understand the scope, one who plans to cut corners, or one who will make up the difference through change orders once you are committed.
• No clear payment schedule tied to milestones. Vague payment terms like "pay as we go" leave you with no leverage and no clarity.

How Payments Should Work

The best protection you have during a construction project is a payment schedule tied to completed milestones. This means you pay for work that has actually been done and verified, not work that has been promised. Understanding how construction financing works in Kentucky will also help you structure your payments wisely.

Here is a reasonable milestone-based payment schedule for a typical home build or major renovation:

• 10 percent at contract signing — This covers initial mobilization, material ordering, and scheduling.
• 20 percent at foundation and framing completion — The structure is up and you can see the bones of the project.
• 25 percent at rough-in completion — Plumbing, electrical, and HVAC are in the walls and inspected.
• 25 percent at drywall and finishes — Walls are closed, painting is done, cabinets and fixtures are going in.
• 20 percent at final completion and punch list — Everything is done, inspected, and the punch list is resolved.

The most important rule: never pay the final payment until the punch list is complete. The punch list is your leverage. It is the list of items that still need to be finished, corrected, or touched up before the project is truly done. Once you hand over that last check, your leverage disappears. Hold it until everything is right.

What a Good Contract Looks Like

A construction contract should not be a single page with a total price and a handshake. It should be a detailed document that protects both you and the contractor. Here is what to look for:

• A detailed scope of work. Not "renovate kitchen" but a line-by-line description of what is being done, what materials are being used, and what finishes are included. Brand names, model numbers, and quantities where applicable. This is what you are paying for, and it needs to be specific enough that there is no room for misinterpretation.
• Start date and estimated completion date. Both should be in writing, with language about what constitutes an acceptable delay, such as weather or material backorders, versus an unacceptable one.
• Payment schedule tied to milestones. As outlined above.
• Change order process. Changes happen on every project. The contract should spell out how changes are requested, priced, approved in writing, and added to the project timeline. No verbal change orders. Everything in writing.
• Warranty language. What does the contractor warrant, and for how long? A standard workmanship warranty is one year. Some items, like roofing or HVAC, may carry manufacturer warranties that are separate.
• Lien release requirement. The contract should state that lien waivers will be provided at each payment milestone. This is critical, and I will explain why next.

Lien Waivers: The Protection Most Homeowners Do Not Know About

A mechanics lien is a legal claim that a contractor, subcontractor, or material supplier can place on your property if they are not paid for work or materials. Here is the scenario that catches homeowners off guard: you pay your general contractor in full, but your general contractor does not pay their electrician or their lumber supplier. That unpaid sub or supplier can file a mechanics lien against your home, and you could be forced to pay again or face a legal battle to clear the title.

The solution is lien waivers. At each payment milestone, require your general contractor to provide a signed lien waiver from themselves and from every subcontractor and material supplier who worked on that phase. A lien waiver is a document that says "I have been paid for this work and I waive my right to file a lien for it."

This is standard practice in commercial construction, but many residential homeowners do not know to ask for it. Ask for it. Make it a requirement in your contract. It is one of the most powerful protections you have, and a reputable contractor will not hesitate to provide it.

The Cheapest Bid Is Almost Never the Best Bid

Getting three bids is standard advice, and it is good advice. But the purpose of three bids is not to find the cheapest price. It is to find the best value from a contractor you trust. Knowing the real cost to build a house in Kentucky will help you recognize when a bid is unrealistically low.

When you line up three bids and one comes in dramatically lower than the other two, resist the temptation to jump on it. There are really only a few explanations for a bid that is 25 to 40 percent below the competition:

• They do not fully understand the scope of your project and are underestimating the work.
• They plan to use cheaper materials or cut corners on labor.
• They are going to make up the difference with change orders once you are locked in and the walls are open.
• They are desperate for work, which raises questions about why other clients are not hiring them.

The middle bid from a reputable, well-referenced contractor is usually the best value. It reflects a realistic understanding of the work, fair pricing for quality materials and labor, and a contractor who has enough demand that they do not need to lowball to win jobs.

Price matters, obviously. But the cheapest project that has to be redone is far more expensive than the fairly priced project that gets done right the first time.

Hiring a Contractor Does Not Have to Be Stressful

If you have read this far, you now know more about hiring a contractor than most homeowners ever learn, usually the hard way. The process does not have to be intimidating. It comes down to asking the right questions, requiring documentation, structuring payments to protect yourself, and trusting your instincts when something feels off.

I am one of the few people in Central Kentucky who works as both a REALTOR® and a licensed General Contractor. That means I understand the build process from the ground up, and I also understand how construction quality affects a home's value, insurability, and resale potential. Whether you are planning a new build on your own land, a major renovation, or you just want someone to look over a contractor's bid before you sign, I am happy to be a resource.

The right contractor will welcome your questions, provide documentation without being asked twice, and treat your home and your money with the same respect they would want for their own. That is the standard, and you deserve nothing less.