What Rules Do Contractors Have to Follow on Every Job?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

Contractors usually face extra rules on five things: written contracts, job permits, inspections, lien notices, and how and when they take payments. Most of these rules come from your state and city, and they vary a lot. A few federal rules also apply, like the Federal Trade Commission (FTC) rule that lets buyers cancel certain sales made at their home within three business days, and the Environmental Protection Agency (EPA) lead paint rule for homes built before 1978.

What this means

Contracts. Many states require a written contract for home improvement work over a certain amount, with specific terms like the license number, start and finish dates, total price, payment schedule, and cancellation notice. California’s contractor board, for example, requires the license number on every construction contract. Your contract terms are covered in 11.1.1 Service Agreement and 11.1.5 Change Order.

Cancellation rights. The FTC’s Cooling-Off Rule covers many sales made at the buyer’s home. The FTC says it applies to sales over $25 and gives buyers three business days to cancel. The seller must tell the buyer about this right. Your state may have its own, sometimes longer, cancellation rules for home improvement contracts.

Permits and inspections. Building, electrical, plumbing, and mechanical work usually needs a permit from the city or county before work starts, and inspections at set stages. Who pulls the permit, you or the owner, can matter for liability.

Lien notices. A mechanic’s lien lets unpaid contractors, subcontractors, and suppliers make a claim against the property. Many states require preliminary notices sent early in the job, and strict deadlines for filing. Some states also require you to give owners a notice explaining lien rights. Miss a step and you can lose your lien rights.

Payment rules. Some states limit how big a down payment can be, or require that payments match work completed. Some have prompt payment laws for subcontractors (see 10.7.2 Deposits and 10.7.3 Progress Payments).

Lead paint. The EPA says anyone paid to disturb paint in homes built before 1978 or in childcare facilities must be lead-safe certified (see 9.4.9 Environmental Requirements).

Made-up example: Northgate Remodeling signs kitchen jobs at customers’ homes. The owner has an attorney update the contract to include the state-required terms and the cancellation notice. He pulls permits before demo, schedules inspections on the job calendar, sends preliminary lien notices to protect his supplier payments, and checks the year each house was built.

Why it matters

Unpaid jobs. Missing lien notices or contract terms can cost you the right to collect.
Stop-work orders and fines for unpermitted work.
Rework. Failed or skipped inspections can mean tearing out finished work.
License discipline. Boards can act on contract and payment violations.
Reviews and complaints. Disputes often end up public.

Who this applies to

General contractors, remodelers, roofers, electricians, plumbers, heating and cooling contractors, painters, landscapers who build hardscapes, fence and deck builders, and handymen. Even small jobs can trigger these rules, so check your state’s dollar limits.

How to do it

Read your state contractor board’s rules on contracts, down payments, advertising, and cancellation notices.
Have a construction attorney review your contract for your state’s required terms.
Add the cancellation notice for jobs sold at the customer’s home.
Ask your city and county building departments which work needs permits and inspections.
Learn your state’s lien steps: who sends notices, to whom, and by when. Put those deadlines on each job’s calendar.
Set a payment schedule that follows state limits and matches work done.
Check the build year of each home before disturbing paint.
Track each job with a folder for the contract, permits, inspections, notices, and payments.

What proof to keep

Signed contracts and change orders
Signed cancellation notices for in-home sales
Permits and inspection sign-offs
Lien notices with proof of delivery
Payment records matched to the schedule
Lead-safe certificates and job records, if they apply

Common mistakes

Starting on a handshake. No written contract makes disputes hard to win.
Leaving out the cancellation notice on in-home sales.
Skipping the permit on “small” jobs.
Missing a lien deadline by a few days.
Taking too large a deposit where state law limits it.
Ignoring the build year on paint jobs in older homes.

When to get help from a pro

A construction attorney should review your contract and walk you through your state’s lien rules before your first job. Questions to ask:

What must my home improvement contract include in this state?
What are the lien notice steps and deadlines for my role on a job?
Are there limits on deposits or progress payments here?

Bill’s note

[Bill: add a short opinion. For example, what you’ve seen happen to contractor reviews when jobs go sideways over payments or permits, or what contractors you work with do to avoid it.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: whether any of SiteSmarty’s work falls under construction rules]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the requirement matrix row for construction rules]
[Result so far:]

Questions people ask

Does a contractor need a written contract? Many states require one for home improvement work over a set amount, with required terms. Even where it isn’t required, use one.

What is a lien notice? A notice that protects your right to make a claim against the property if you aren’t paid. Many states require it early in the job, with strict deadlines.

Do I need a permit for every job? Not every job, but most structural, electrical, plumbing, and mechanical work needs one. Ask your building department.

Can a homeowner cancel a contract I signed at their house? Often, yes. The FTC’s Cooling-Off Rule gives buyers three business days to cancel many sales over $25 made at their home. States may add more.

Do I need lead paint certification for old homes? Yes, if you’re paid to disturb paint in a home built before 1978. Firms must be certified and workers trained.

Audit check

Question: Does every job have a compliant written contract, the required permits and inspections, timely lien notices, and payments that follow state rules?
Pass looks like: Attorney-reviewed contract with required terms. Cancellation notice on in-home sales. Permits pulled and inspections passed. Lien notices sent on time. Deposits within limits.
Fail looks like: Verbal deals. Missing permits. Missed lien deadlines. Oversized deposits. No lead-safe certification on older homes.
Evidence to collect: Job folders with contracts, notices, permits, inspection sign-offs, and payment records.

Where this fits

Do this first: 9.5.2 State Licenses, 9.5.5 Special Permits

Do this next: 9.6.5 Financial Activity Rules

Sources

Federal Trade Commission (FTC), "Cooling-off Period for Sales Made at Home or Other Locations" (checked October 17, 2026)
EPA, "Lead Renovation, Repair and Painting Program" (checked October 17, 2026)
California Contractors State License Board, "Advertising Guidelines for Contractors" (an example of one state's rules) (checked October 17, 2026)
Google Business Profile Help, "Tips to improve your local ranking on Google" (checked October 16, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.