For most residential jobs of $1,000 or more, a Washington contractor has to give you a signed disclosure statement before work starts. A homeowner may sue the contractor's bond in superior court within two years, and, after a judgment entered after July 1, 2026, may apply to the Homeowner Recovery Fund for up to $25,000.

The written contract, the $1,000 disclosure, and cancellation

Get a written contract, compare at least three written bids, and do not pay in full until the job is done. Be cautious of pressure to "sign today," cash-only terms, or a request that you pull the building permit yourself. RCW 18.27.114 requires a specific "Notice to Customer" disclosure for many jobs. A contractor agreeing to repair, alter, or construct four or fewer residential units, or accessory structures on that residential property, when the bid or contract price is $1,000 or more, has to give you the disclosure statement before starting work. The same disclosure applies to commercial work when the price is $1,000 or more but less than $60,000. The notice states the contractor's registration number, the bond or deposit amount and expiration, that the bond might not cover your entire claim because it also covers other customers and suppliers, that you may withhold a contractually defined retainage, and that unpaid suppliers or subcontractors may lien your property. You sign to acknowledge receipt. The contractor has to keep the signed copy for three years and has to tell you if the registration expires, is revoked, or is suspended before the job ends. A contractor who skips this disclosure cannot bring or maintain a construction-lien claim on that contract. The disclosure does not apply to public works or to contractors contracting with other contractors.

Washington does not give every homeowner a three-business-day right to cancel every contractor contract. A three-business-day cooling-off period can apply when the sale is made away from the seller's usual place of business, including a visit to your home, under the federal door-to-door sales rule for sales of more than $25, and under RCW 63.14.154 for certain retail installment contracts. If your home is used as collateral for a home-improvement loan, federal Truth in Lending rules can also give you until midnight of the third business day to cancel. Those rights are limited. If you think one applies, cancel in writing and keep proof of when it was sent. For contracts signed at the contractor's place of business, do not assume you can cancel after you sign.

Bond claims and the Homeowner Recovery Fund

If a registered contractor walks off the job or does not meet the contract, you may file suit against the contractor and the bond in the superior court of the county where the work was done, or in a county where the contractor can be sued. For a residential homeowner's breach-of-contract claim, the summons and complaint have to be filed within two years from the date the claimed work was substantially completed or abandoned, whichever occurred first. Service of that suit is made on L&I, which then transmits it to the contractor and the surety. The bond may already be reduced by other claims, and employee-labor claims have priority. The surety is not liable above the bond amount. If the contractor caused property damage or injury, a claim may also go to the contractor's liability insurer; that path is separate from the bond.

The Homeowner Recovery Fund, created in RCW 18.27.410, is an additional step after the court case and the bond, not a substitute for them. Beginning July 1, 2026, a person may be eligible if all of the following are true:

• You are the owner-occupant, and the work was on your primary residence. Eligible property is a single-family dwelling or a multifamily dwelling of four or fewer units. Condominiums are excluded. In a multi-unit building, only the unit you actually live in counts as the primary residence.
• You have a final judgment, in a court of competent jurisdiction, against a registered contractor on a bond claim brought under RCW 18.27.040(3), and the judgment specifies actual damages. L&I's program page states that the judgment has to be ordered after July 1, 2026.
• You have proceeded against any existing bond covering the contractor, and the judgment has not been satisfied in full.
• You apply to the fund within 90 days after the civil action concludes.

Payment is limited to actual damages awarded in the judgment, after recovery on the bond. Attorneys' fees, court costs, and punitive damages are not paid from the fund. The maximum is $25,000 per contractor per parcel, or the unpaid judgment, whichever is less, and payments depend on available funds. If the fund cannot pay immediately, L&I places approved claims on a waitlist in the order received. If the application is approved, you assign your judgment rights, to the extent of the payment, to L&I before funds are issued. Applications can be filed through ProtectMyHome.net or by mail. L&I says review takes about 14 business days. The fund phone line is 360-902-5699, and the email is HRF@Lni.wa.gov.

The statute says the program does not create an entitlement, and payments depend on available funds. Keep the contract, the signed disclosure, photos, and proof of what you paid for a bond suit and any later fund application.

FAQ

When is the disclosure statement required?

Before work starts, on most residential contracts of $1,000 or more involving four or fewer units (and on many commercial jobs from $1,000 to under $60,000). The contractor has to keep a signed copy for three years. Without it, the contractor cannot pursue a construction lien on that contract.

Do I always have three days to cancel a contractor contract?

No. A three-business-day cooling-off period applies in limited situations, such as certain sales made away from the contractor's place of business, some retail installment contracts, and some loans that use your home as collateral. It is not a general right on every home-improvement contract.

How long do I have to sue the contractor's bond?

A residential homeowner's bond claim for breach of contract has to be started in superior court within two years after the work was substantially completed or abandoned, whichever happened first.

How much can the Homeowner Recovery Fund pay?

Up to $25,000 per contractor per parcel, or the unpaid amount of a qualifying judgment, whichever is less, and only for actual damages after you have proceeded against the bond. Apply within 90 days after the court case ends. Judgments need to be ordered after July 1, 2026.

Next step

Before work starts, get a written contract and the signed disclosure statement, and verify the contractor's registration. If a job later fails, talk with a licensed local agent or an attorney about a bond claim, and then about a Homeowner Recovery Fund application if a judgment remains unpaid.

Sources: RCW 18.27.114; RCW 18.27.040; RCW 18.27.410; L&I, problems with a contractor; L&I, Homeowner Recovery Fund; Washington Attorney General, cancellation rights; L&I, Homeowner Recovery Fund fact sheet (F625-120-000).

Washington construction contractors have to be registered with Labor and Industries, bonded, and insured. General contractors post a $30,000 bond; specialty contractors post a $15,000 bond. Liability insurance is at least $200,000/$50,000, or $250,000 combined. Registration is not a skills test. Check L&I's Verify tool before you sign.

What registration means, and what it does not mean

L&I requires construction contractors to register if they construct, remodel, repair, or demolish buildings, roads, or other real property, or if they bid, advertise, or consult on that work. There are two classifications. A general contractor can perform most types of construction and can hire subcontractors in multiple specialties. A specialty contractor may perform only the specialty listed on the registration and may not hire subcontractors. Plumbing, electrical, elevator, manufactured-home installation, boiler, and asbestos work have additional education, examination, and licensing requirements. Electricians and plumbers, for example, are tested and certified by L&I in addition to any contractor registration.

L&I is direct about a limit of registration: Washington does not require contractors to pass a competency or skills test to become registered, except for those separately licensed trades. A current registration still matters. It is how you confirm that a bond and liability insurance are on file, that the business is known to the state, and that employees should be covered by workers' compensation. Working, advertising, or bidding without being registered is illegal and carries penalties. Unregistered contractors also leave you without the bond, and they can cut you off from the Homeowner Recovery Fund, which is available only after work by a registered contractor.

Some jobs, such as gutter cleaning, pruning, lawn care, and window washing, do not require contractor registration. If your project "adds to or subtracts from real estate," or if it is on L&I's list of registered specialties, verify the registration. L&I lists dozens of specialties, including roofing, painting, HVAC, tree removal, and manufactured-home set-up.

Use the Verify a Contractor, Tradesperson, or Business tool on L&I's website, or go to Lni.wa.gov/Verify. You can search by contractor registration number, UBI number, or a full or partial business or owner name. On the record, confirm:

• The registration is active on the day you hire, not merely that the company was registered in the past.
• The business name matches the name on the estimate, the contract, and the insurance certificate.
• A bond and general liability insurance are current, and the bond amount is $30,000 for a general contractor or $15,000 for a specialty contractor (the higher amounts have been required at renewal since July 1, 2024).
• Whether there are lawsuits against the bond, safety or construction citations, other business names, or an unpaid workers' compensation account.
• For electrical, plumbing, elevator, or manufactured-home work, that the tradesperson who will do the work is certified, not only that a company is registered.

L&I also offers ProtectMyHome.net and a Hire Smart worksheet, and it recommends getting at least three written bids, checking references, and refusing to pay in full before the work is done. The registration number has to appear on advertising, bids, estimates, and other solicitations.

Bond and insurance: what they can and cannot pay

The bond is a financial backstop, not a promise that the job will go well. A residential homeowner can sue the contractor and the bond in superior court for breach of contract, including improper work. The surety's total liability cannot exceed the bond amount, and the bond also covers labor, suppliers, and taxes, so it can be shared with other claimants. Liability insurance, at the required minimums, may cover damage to your property or injuries caused by the contractor's negligence; it often will not cover a simple failure to finish the job. Ask to see the insurance certificate, and consider having your own insurance agent review it on a large project, because some policies exclude construction defects or work outside the contractor's usual operations.

If the contractor has employees, verify that the workers' compensation account is current. If you hire an unregistered person, you may be treated as the employer, with wage, tax, and workers' compensation duties. When a registered contractor does not pay subcontractors or suppliers, those parties may still lien your property. Ask how the contractor will document payments and lien releases.

L&I's contractor information line is 1-800-647-0982. To report a fraudulent or unregistered contractor, use L&I's report-a-fraud options or call 1-888-811-5974.

FAQ

How do I check a Washington contractor's registration?

Use L&I's Verify tool (Lni.wa.gov/Verify). Confirm that the registration is active, that the bond and insurance are current, and that the name matches the contract. For electrical or plumbing work, also check the individual's trade certificate.

What bond amounts are required?

A $30,000 continuous surety bond for general contractors, and a $15,000 bond for specialty contractors, as required under RCW 18.27.040 and L&I's registration rules. An assigned savings account can be used instead of a surety bond.

Does a registered contractor have to pass a skills test?

Not for registration itself. L&I does test and license electricians and plumbers, and some other activities have extra licenses. Registration shows that a bond, insurance, and a business license are on file.

Is registration enough to hire someone?

It is the legal starting point, not a guarantee of workmanship. Compare written bids, check references and the Verify record, and get a written contract. Hiring an unregistered contractor also risks losing access to the Homeowner Recovery Fund.

Next step

Before you sign, look the company up in L&I's Verify tool, match the name and registration number to the written bid, and ask a licensed local agent if you want a second look at the contractor's insurance certificate or at your own policy during the job.

Sources: Washington L&I, register as a contractor; L&I, verify a contractor, tradesperson, or business; L&I, hiring a contractor; RCW 18.27.040; L&I, What You Should Know About Hiring a Contractor (F625-084-000).