Hiring and Checking a Building Contractor

Before you sign anything, verify the contractor in the public register, confirm that the licence covers the type and value of your project, and compare at least three itemised quotes on the same scope. A contractor who cannot show a valid licence and the right classes for your work is a risk you do not need to take. The checks below take an afternoon and cost nothing.

Start with the register, not the business card

In Portugal, construction contractors must hold an alvará (construction licence) issued under the legal regime for public works and private construction. The licence is not a formality: it states what the company is authorised to build, up to what value, and in which categories. A company that shows you a glossy portfolio but no licence number is asking you to carry its risk.

Verification works the same way in most jurisdictions: you look the company up in the official register, not on its own website. In Portugal the register is maintained by the IMPIC (Instituto dos Mercados Públicos, do Imobiliário e da Construção), and the licence data is public. You need the company's full legal name and its tax number (NIF), not the trading name on the van. Cross-check the address, the registration date and the licence status. If the licence is suspended, expired or held by a different legal entity than the one signing your contract, stop and ask why in writing.

This is also where you separate two things that are often confused: technical and administrative eligibility, and the actual quality of execution. A valid licence proves the first. It says nothing about the second. A contractor can be fully licensed and still deliver poor work, so the register is a filter, not a guarantee. Publications that follow the Portuguese construction sector, such as the Caderno de Obra, treat this distinction as a starting point: read the public records first, then judge the work on evidence from previous sites.

How do I verify a contractor in the public registers?

Work through four checks in order.

First, confirm the legal identity. Ask for the company's full name, NIF and commercial registration number. Compare them against the licence record. Mismatches between the entity that holds the licence and the entity that will invoice you are a common source of disputes, because the contract may end up with a company that has no licence at all.

Second, confirm the licence is active. The register shows whether the alvará is valid, suspended or cancelled, and the date of the last update. A licence that lapsed six months ago is not a licence.

Third, check the licence classes and the value ceiling. These are covered in the next section, but the point here is that the register tells you whether the company is allowed to take your type of work at your contract value.

Fourth, check for sanctions and disqualifications. Public procurement portals and sanction lists are searchable, and a company barred from public contracts is a signal worth understanding before you hire it for a private project. You are not obliged to replicate a public tender process, but the same public data is available to you and takes minutes to read.

Keep a dated print or PDF of each screen you check. If a dispute arises later, you will want to show what the register said on the day you hired.

How do I read a construction licence and its classes?

An alvará is structured, and each part answers a different question.

The licence number and validity dates tell you the document is current. The holder's identification ties the licence to a specific legal entity. The classes are the substantive part: they define the categories of work the company may perform, and each class is tied to a maximum contract value the company can take on. A company may hold several classes, and the ceilings differ between them.

Read the classes against your own project, not in the abstract. If you are renovating an apartment, you need the classes that cover building rehabilitation or the relevant specialty. If you are building a house from scratch, you need the classes that cover new construction at your budget level. A contractor whose licence ceiling sits below your contract value cannot legally take the job as it stands, whatever the verbal agreement.

Two practical traps. The first is the difference between the licence holder and the site team: the licence belongs to the company, while the people on site may be subcontractors. Ask who will actually execute the work and whether those subcontractors are licensed where their specialty requires it. The second trap is the assumption that a higher class means better work. It does not. Classes measure administrative capacity, not craftsmanship. A small licensed firm with a short client list you can actually visit may serve you better than a large one whose references are impossible to verify.

If any part of the licence is unclear, ask the contractor to walk you through it in writing. A contractor who cannot explain their own licence is telling you something useful.

How do I compare contractors' quotes for a private project?

Quotes are only comparable when they describe the same work. Most of the gap between the cheapest and the most expensive bid comes from what each one silently excludes, not from the price of the same materials.

Build a single scope document before you request any quote. It should list the rooms or areas, the works in each, the materials and finishes you expect, and what you will supply yourself. Send the identical document to every contractor. Any bid that arrives against a different scope is not a bid, it is a different project.

Then normalise the quotes into a table with the same line items. Look for these specific gaps:

• Demolition and removal of debris, including disposal fees.
• Site protection, scaffolding and access, which are often assumed rather than priced.
• Electrical, plumbing and drainage, sometimes listed as excluded and left to you.
• Permits, municipal fees and technical drawings, which may sit outside the quote.
• Finishes: tiles, paint, sanitary ware, and whether the price is per square metre or per unit.
• Timeline and payment schedule, including retention held until the final inspection.
• VAT treatment, and whether the quote is with or without it.

Once the table is complete, the ranking usually changes. The cheapest headline figure frequently becomes the most expensive once the exclusions are priced in. Ask each contractor to confirm, in writing, that their quote covers the full scope document, and to state explicitly what it does not cover.

Finally, treat the payment schedule as part of the comparison. A schedule that front-loads most of the money before the work is done transfers risk to you. Milestone payments tied to completed and inspected stages are the standard you should ask for, and a contractor who resists them is a contractor to reconsider.

What to put in writing before work starts

The contract should name the licensed legal entity, not a trading name. It should attach the scope document and the accepted quote, state the start and completion dates, set out the payment milestones and the retention, and describe how variations are priced and approved. Include the licence number and the classes relevant to the work.

Keep your verification file with the contract: the register printouts, the licence copy, the quotes you compared and the correspondence. If the work goes well, the file is harmless. If it does not, it is the difference between a conversation and a case.

None of this requires legal training. It requires reading public records carefully, asking the same questions of every contractor, and refusing to let a verbal assurance replace a document.