Most people don't realize that there are a series of important facts they should know about their building contractor before hiring them to build or renovate their home. First, make sure that the contractor you are dealing with is registered with the state as Home Improvement Contractor ("HIC") and has a Construction Supervisor's License ("CSL"). Contractors who have registered as an HIC are required to pay a fee to a Guaranty Fund held by the Office of Consumer Affairs that may be available to partially reimburse the homeowner if the contractor does not perform or performs negligently. A Construction Supervisor's License can only be obtained after the contractor has passed a test showing that he or she has knowledge of the building code, which will be important when the work is reviewed by a building inspector. More detailed information regarding HICs and CSLs can be found on the website for Massachusetts Office of Consumer Affairs and Business Regulation. This website also details the complaint process homeowners can use when something goes wrong.
Another important thing to check is whether the contractor has adequate insurance. Ask contractors providing you bids to show you proof of insurance that is current and that has adequate coverage limits for the type of project you are doing. Contractors should carry, at a minimum, property damage and personal liability insurance.
Ask your contractor to provide you with a contract that itemizes all of the various categories of work that will be done and the prices that will be charged for each segment of the work, and ask whether the prices are just estimates or fixed costs.
Although it is common for some money to be paid to a contractor up front to allow for the purchase of materials, negotiate the contract so that you, for the most part, pay in installments as the work is done. Make sure that, at the end of the project, you retain enough money so that the contractor is incentivized to finish all of the punch-list items that need to be completed before the project is truly done.
Finally, get references from the contractor of other people that he or she has done similar jobs for. Contractors that have plenty of good references are far more likely to do a good job for you.