How to Check Out an HVAC Contractor in California Before You Sign

A furnace or air conditioner replacement is one of the larger purchases a homeowner makes, and it is made under pressure, often in a week when the house is uncomfortable. That is exactly when due diligence gets skipped.

The good news is that California gives you more to check than most states do, and most of it takes about ten minutes online. Here is the order to do it in, before you sign anything.

Start with the license lookup

The Contractors State License Board — CSLB — maintains a public record for every licensed contractor in California, searchable at cslb.ca.gov by license number, by business name or by personnel name.

In California, anyone performing construction work where the combined labor and materials come to $500 or more must hold a license. An HVAC replacement is comfortably over that line, so there is no version of this job where the licensing question does not apply.

Ask for the license number up front. A contractor who is reluctant to give you one has answered a different and more useful question.

What the license record actually shows you

The lookup is more informative than most people expect. Read the whole record, not just the green "active" status.

• Status and expiry. Active, expired, suspended or revoked, with the date the license was issued — which tells you how long the business has actually been licensed.
• Classification. HVAC work falls under C-20, Warm-Air Heating, Ventilating and Air-Conditioning. A contractor licensed only in an unrelated classification is not the right party for a changeout. Some general building (B) contractors can also perform this work in certain circumstances — if that is the situation, ask them to explain it.
• The contractor's bond. A bond is required to hold a license. The record shows the bond, the surety and the effective date. The required amount is set by statute and has changed over the years, so read the current figure off the record rather than assuming.
• Workers' compensation. The record shows whether a workers' comp policy is on file, or whether the licensee has filed an exemption declaring they have no employees. This matters to you directly: if an uninsured worker is injured at your house, you do not want that question to be open. A company sending a crew should have a policy, not an exemption.
• Disclosures. Any license history, outstanding judgments or disciplinary actions on record.

For reference, Cool Guys holds California CSLB #1156890 and is licensed, bonded and insured — you can run us through the same lookup you run anyone else through, and you should.

What has to be in the contract

California requires home improvement work to be done under a written contract, signed before work begins, and it requires specific content in it. Two items are easy to check and tell you a great deal.

The license number. A licensed contractor must put their license number on contracts, on bids and in advertising. If the number is missing from the paperwork in front of you, ask why before you ask anything else.

A real description of the work. The contract should describe the scope and the materials, the approximate start and completion dates, and the total price — not a single line reading "install new HVAC system." For a changeout, the document should name the equipment, say whether the indoor coil is included, state who handles the permit and any required testing, and set out the warranty terms. Our guide on comparing two HVAC quotes goes through those line items in detail, and the permit guide covers what the permit side should say.

Deposits and payments: the California limits

This is the rule most homeowners have never heard, and it is the one that protects the most money.

On a home improvement contract in California, the down payment may not exceed $1,000 or 10 percent of the contract price, whichever is less. Not ten percent on a large job — one thousand dollars, if ten percent would come to more than that. A contractor asking for half up front on a replacement is asking for something the law does not allow.

Payments after that are meant to track the work: a progress payment should not exceed the value of the work performed and materials delivered to that point. You should not be paid up in full on a job that is not finished.

Limits and requirements do change, so confirm the current rules with CSLB rather than taking a web page's word for it — including this one. CSLB publishes consumer guidance on exactly this.

The checks people skip

• Confirm the license matches the business you are hiring. Names can be similar and a license can belong to a different entity than the one on the invoice.
• Ask who is actually doing the work. Employees, or subcontractors? If subcontracted, are they licensed and covered too?
• Get the permit answer in writing. Who pulls it, and is it in the price? A quote that is lower because it omits the permit is a different job, not a better deal.
• Read the warranty as two numbers. Parts and labor are separate, with separate durations and sometimes separate parties honoring them.
• Do not pay in cash. A check or card leaves a record, and a record is what you will want if anything goes wrong.
• Be wary of urgency. "This price is only good today" is a sales technique, not a market condition. Equipment prices do not move by the hour.

If you want the softer version of this question — what changes about a company depending on who owns it — we wrote about that in family-owned versus corporate HVAC.

Frequently asked questions

How do I check if an HVAC contractor is licensed in California?
Use the CSLB's public lookup at cslb.ca.gov. Search by license number, business name or personnel name, then check the status, the classification (C-20 for HVAC), the bond, whether workers' compensation is on file, and any disclosures.

How much deposit can an HVAC contractor ask for in California?
On a home improvement contract, the down payment is limited to $1,000 or 10 percent of the contract price, whichever is less. Payments after that should not run ahead of the work actually performed. Confirm the current rules with CSLB.

Does the contractor's license number have to be on my contract?
Yes. A licensed California contractor is required to include their license number on contracts, bids and advertising. Its absence is worth questioning before you sign.

This page is general information for homeowners, not legal advice — CSLB is the authority on licensing and contract requirements, and rules change.

Happy to be checked out. Run our number, then get in touch with whatever questions the lookup raises. When you are ready for pricing, the replacement estimate is free, and you can read more about AC installation and replacement or AC repair first.