Have a Project? A Lawyer’s Guide to Vetting Contractors in North Carolina

By Christian Lunghi 

Hiring the wrong contractor can turn a project into a headache or a lawsuit. The steps below are simple, practical checks you can do to lower your risk. They’re not foolproof and don’t guarantee a perfect job, but they can help you catch the big red flags. Use this as a checklist to confirm the basics, and if something feels off, talk to a construction lawyer before you sign. A little homework now is almost always cheaper than a mess later.

Confirm the Company Exists

You might be surprised how often this is overlooked. Before you look at prices or timelines, make sure you’re dealing with a real, accountable business: the one you can sue if you must.

How to check:

1. Google: NC Secretary of State business search.
2. Open the search page and enter the exact legal name of the company.
3. Open the entity record and confirm the status shows “Current/Active.” Also, check the formation date. A brand-new company can be a caution flag. Sometimes contractors “reset” under a fresh LLC after leaving creditors or disputes with a prior entity. It’s not proof of a problem, but it warrants investigation.
4. Save or print the profile for your records.

Red flags: No record with the Secretary of State, a Dissolved/Inactive status, or a brand-new entity with no track record. A total lack of online presence can be a caution flag (though many small, local contractors don’t invest in websites or marketing, so weigh it with the other checks). If they appear on the Better Business Bureau, scan the reviews and any complaint patterns (the letter grade matters less than consistent, recent issues).

Verify Licensing

The General Contractor’s License

In general terms, a General Contractor’s license (with the North Carolina Licensing Board for General Contractors) is required if the total cost of the project is $40,000 or more. A GC license is the key for larger jobs. Ask the GC for a license number and the qualifier’s name tied to the license. A qualifier is the licensed professional whose credentials a company uses to hold its license and is responsible for the company’s competence and code compliance.

Where to check:

1. Google North Carolina Licensing Board for General Contractors license search.
2. Search by name or license number.
3. Confirm the license for the company is “Active” and any Qualifier license(s) are “Active.”

Separate Trade Licenses

In North Carolina, a general contractor license does not cover the regulated specialty trades. They still need the specific trade’s license (or certification) for that scope of work, even if the cost of the project is less than $40,000.

Common examples: electrical (NC State Board of Examiners of Electrical Contractors), plumbing/heating/HVAC/fire sprinkler (NC State Board of Examiners of Plumbing, Heating & Fire Sprinkler Contractors), refrigeration (NC State Board of Refrigeration Contractors/Examiners), alarm/security systems (Security Systems Licensing Board), irrigation (NC Irrigation Contractors’ Licensing Board), well construction (NC Well Contractors Certification Commission within NC DHHS) and asbestos/lead abatement & renovation (NC DHHS, Health Hazards Control Unit).

To verify, ask which licensed trade will perform each part of the job, and get the license number and qualifier’s name. Then use the relevant board’s online license lookup to confirm the credential is active. Local permits usually must be pulled by the licensed trade doing the work, so the name on the permit should match the license you verified.

Take note that not every task in a specialty trade requires a licensed/certified pro in North Carolina. There are narrow exceptions (e.g., simple maintenance or “like-for-like” replacements, certain owner-occupant work under permit, or work by an employer’s in-house staff on its own premises). But anything that alters systems, such as new circuits or wiring changes, service panel work, gas line connections, new HVAC installs, refrigerant handling, new plumbing lines/vents, fire-sprinkler work, elevator work and alarm/security installs typically requires the trade’s license and often a permit.

The safe rule: if it’s more than basic maintenance, assume a trade license and a permit are required and confirm with your local inspections office or the relevant state licensing board.

Red flags: No license when the price requires one, wrong classification, or expired license. As for the GC license: some contractors will try to split up the job into smaller jobs, so they don’t breach the $40,000 threshold for licensure. If all the work is on the same property and being done at or around the same time, the NCLBGC will likely view it as a single project and add it all up. If it adds up to $40,000 or more, they likely need a GC license.

Insurance & (When Applicable) Bonding

Confirm the contractor can shoulder risk before any money changes hands.

What to require:

• General Liability (to cover property damage and some third-party claims).
• Workers’ Compensation (construction often involves multiple workers/subs). In North Carolina, most businesses with three or more employees must carry Workers’ Compensation insurance.
• If your municipality or HOA requires it (or for bigger jobs), ask about bonding.
• Verify coverage is active. Ask the contractor’s insurance agent to email you a current certificate of insurance directly.

Lawsuits, Liens, and Judgments in NC

Repeated disputes can point to nonpayment, poor workmanship, or cash-flow issues, but scale matters. High-volume contractors, especially on large or public jobs, are in court more often, and that fact alone isn’t a red flag. Use court and land records as a reality check and look for patterns: multiple recent suits or liens for the same problems (unpaid subs, failed inspections, faulty work), unsatisfied judgments, or disputes spread across different projects for faulty work. One or two isolated cases, especially older or quickly resolved, carry much less weight. The construction industry is litigation-heavy, and disputes arise for many reasons. The question isn’t “have they ever been sued?” but “does their record show a recurring problem you don’t want on your job?”

Quick note: This step takes a little savvy. Court dockets, pleadings, and liens aren’t always intuitive, and reading dispositions (“dismissed,” “consent judgment,” “satisfied”) can be tricky. If this feels outside your comfort zone, stick to the other checks or ask a construction lawyer for guidance before you draw conclusions. Plenty of reputable contractors find themselves in court — it’s not always their fault, and it’s part of doing business at scale.

Where you can look: NC eCourts Portal (Odyssey). Google North Carolina eCourts portal case search. Search the company and owner.

What to look for:

• Mechanic’s liens: A pattern of active liens by different subs/suppliers on different projects is more concerning than a single lien that was quickly canceled.
• Recent, unsatisfied judgments for nonpayment or defective work.
• Recent injunctions or public disciplinary orders are stronger warnings than minor, dated issues.

References the Right Way

If you’re committing a substantial sum of money, asking for references is smart and worth the effort. It’s the fastest way to test whether the contractor delivers on time, pays subs, and clears inspections.

You can ask for:

• Two or three recent jobs (last 12–18 months).
• One older job (2–5 years).
• A current jobsite you can drive by.
• Keep the scope and price range similar to yours.

Questions to ask these references:

• Did they finish on time/on budget?
• How did they handle change orders and surprises?
• Any trouble with permits or inspections?
• Did any subs/suppliers contact you about nonpayment?
• Would you hire them again?

Permits & Inspections

Most structural, electrical, plumbing, HVAC, and major renovation work requires a permit and inspections from your local inspections department.

What to do:

1. Call your local building inspections office and describe the project; ask if a permit is required.
2. Confirm who pulls the permit (typically the contractor).
3. Ask the contractor for the permit number and keep copies of inspection approvals and the final sign-off (e.g., Certificate of Occupancy).

Red flags: “We don’t need a permit” when the inspector says otherwise, or “We’ll just skip inspections.”

Evaluating the Contract

If you want real certainty about a contract, have a lawyer read it. Contract interpretation should be done by a licensed attorney, and small wording changes (or lack of wording) can swing thousands of dollars. That said, you can still spot a few obvious trouble signs that tend to cause headaches.

Red flags to watch for (at a glance):

• One-page, lump-sum quote with no materials, specs, or milestones.
• Large upfront deposit (beyond a modest amount or the cost of custom, non-returnable items).
• You pay for “time and materials” with no written cap or estimate.
• No written change-order process (or “we’ll sort it out later”).
• Vague payment triggers instead of inspectable milestones (e.g., “rough-in passed”).
• “No permits needed” when your local inspections office says otherwise.
• Mismatched names across the proposal, license, and insurance (not the same legal entity).

Biggest red flag? Trying to play lawyer. Have a licensed attorney analyze your contract.

Do some homework before a dollar changes hands. Verify the basics, ask a few hard questions, and trust your gut. Small checks up front can prevent big problems later. If anything feels off, or the paperwork reads like alphabet soup, stop and call a construction attorney. Spending a little on advice now is almost always cheaper than litigating a mess later.

This is general information for North Carolina projects and isn’t legal advice. If you hit a snag — liens, delays, defective work — call a construction lawyer early.