Before hiring a basement contractor in Minnesota, confirm a residential building contractor or remodeler license in the Department of Labor and Industry lookup, get liability and workers' compensation certificates, and ask who pulls the permits, how lien waivers are handled, who the subcontractors are, and how change orders, payments, warranty and cleanup work.
Good answers are specific and go in writing. Vague answers, a large upfront payment, or a request that you pull the permit are warning signs listed by Minnesota's Attorney General.
On this page
- Is the contractor licensed in Minnesota, and how do I check?
- What insurance should a basement contractor carry?
- Who pulls the permits, and who meets the inspector?
- How will you handle lien waivers?
- Who will actually do the work?
- When can you start, and how long will my basement take?
- How will we communicate during the project?
- How do you handle change orders?
- What warranty do you give on a finished basement?
- How will you control dust and clean up?
- Can I talk to recent clients and see your record?
- Basement contractor checklist: questions, why they matter, and what a good answer sounds like
- What should you check before you sign?
- How does this play out in a typical Twin Cities basement?
- Questions people ask
Is the contractor licensed in Minnesota, and how do I check?
Ask this first, because everything else depends on it. In Minnesota, a contractor who works directly with the owner of a one- to four-unit home in more than one special skill area needs a residential building contractor or remodeler license from the Department of Labor and Industry. A basement finish is framing, insulation, drywall, trim and flooring, at minimum, so a company that contracts with you for the whole job needs a license. A remodeler license covers existing structures; a building contractor license also covers new homes.
How to look up a license
Get the license number and check it yourself. DLI's license and registration lookup runs through its iMS system: choose "Continue as guest" and enter the number, or use the search for license holders. A current license shows a status of "Issued," and iMS can show whether there are enforcement actions against the license. DLI's tips for hiring a contractor add that licensed residential builders, remodelers and roofers have numbers starting with BC, CR or RR, and that registration numbers starting with "IR" are not licenses. You can also call DLI at 651-284-5069 or 800-342-5354.
The Attorney General's handbook adds that licensed contractors must show their license number on contracts and advertising, so a missing number on a bid is worth asking about.
Why the license protects you, not just the contractor
Two reasons. First, Minnesota's Contractor Recovery Fund can compensate homeowners for out-of-pocket losses from fraud, conversion of funds or failure of performance, but only when the contractor held an active residential building contractor or remodeler license when the contract was signed and when the work was done. DLI's fact sheet sets limits per claimant and per contractor, and you need a court judgment first. Second, the Attorney General notes that unlicensed contractors may carry less insurance and that a contractor who is required to be licensed but isn't cannot file a mechanic's lien.
What insurance should a basement contractor carry?
Ask for two certificates: general liability and workers' compensation. To hold a license, DLI requires liability coverage for "premises, operations and products, and completed operations" at minimum limits set by law, written by an insurer licensed in Minnesota, plus proof of workers' compensation. The Attorney General recommends asking for proof of liability insurance and a copy of the workers' compensation policy, because you may be liable if a worker is injured on your property, and suggests checking with your own insurer about your coverage during the project.
Look at the named insured, the dates and the limits. The business name on the certificate should match the company you are signing with. If the contractor uses subcontractors, ask whether each one carries its own coverage.
Who pulls the permits, and who meets the inspector?
The answer you want is "we do." The Attorney General explains that whoever obtains the permit is responsible for code compliance, and lists a contractor who asks you to get the permits as a warning sign. Some cities spell it out: the City of Blaine says a hired general contractor is required to obtain the permits, and that any plumbing or mechanical contractor must be listed on the application and licensed with the city or the state. Blaine handles electrical permits separately through the state's iMS system and requires a separate permit for a new or resized window.
Ask which permits they will pull, which inspections the job needs, and who will be home for each one. For a basement with a bedroom and a bath, there are usually several inspections between framing and final, and a missed one can stall drywall for days.
Check with your city: permit types and inspection sequences differ across Minnesota cities. See our Minnesota basement permit and egress guide.
How will you handle lien waivers?
Minnesota's mechanic's lien law lets people who supply labor or materials to your basement file a lien against your house if they aren't paid, even if you paid your contractor. That is why this question belongs on your list.
Under Minnesota Statutes 514.011, a contractor who contracts directly with you and uses subcontractors or suppliers must put a lien notice in the written contract, or deliver it within ten days if there is no written contract. A contractor who skips the notice loses its own lien rights. Subcontractors and suppliers without a direct contract with you must send their own notice within 45 days after they first furnish labor or materials. The notice tells you that you may withhold amounts due to them until 120 days after completion unless the contractor gives you signed lien waivers.
The Attorney General's handbook adds the deadlines: a lien statement must be filed with the county recorder and delivered to you within 120 days after the last labor or material is furnished, and the lienholder must start foreclosure within one year. It recommends getting signed waivers from each subcontractor before final payment, and notes that if you hold a valid waiver, or paid the contractor in full before receiving a subcontractor's notice, you generally can't be made to pay twice. You can also ask a lienholder for an itemized statement, which must be provided within 15 days.
A good answer: "Our contract includes the lien notice. With each progress payment we give you waivers from us and from the subcontractors and suppliers paid from it, and you get final waivers before the final payment."
Who will actually do the work?
Most basements are built by a contractor and several trade partners. That's normal; ask who they are. The Attorney General recommends listing all subcontractors and material suppliers in the contract. Subcontractors who don't contract with you directly must be registered with DLI's construction contractor registration program, according to DLI, and the electrical, plumbing and mechanical trades carry their own licenses that you can check in the same lookup.
Ask who runs the job day to day. A basement involves eight or nine trades in sequence, and someone has to make sure the electrician has finished before the insulation goes in and the inspection passed before drywall.
When can you start, and how long will my basement take?
Ask for an anticipated start date, a completion date and the main milestones in between. The Attorney General recommends writing anticipated start and completion dates into the contract with a general allowance for reasonable delays; DLI suggests stating deadlines and what happens if they are missed. Ask what usually moves their schedule: inspection wait times in your city, material lead times on windows, cabinets or tile, and dry time for drywall compound. A contractor who names these is planning, not guessing.
Also ask whether your job will be worked on continuously, or whether crews rotate between several jobs. Neither is wrong, but you should know which to expect.
How will we communicate during the project?
Ask who your single point of contact is, how fast they reply, and how you'll hear about schedule changes, inspection results and decisions you need to make. Good answers are specific: a named project lead, a weekly update, a shared list of open selections with due dates. Ask how they'll tell you when a choice has to be made, because a late tile pick can hold up a tiler for a week.
Ask for decisions in writing. A text that says "go ahead with the bigger closet" is not a change order, and Minnesota law requires change orders in writing.
How do you handle change orders?
Minnesota Statutes 326B.809 requires a licensed contractor's change orders to be in writing, like the original contract, with the scope, materials and price. The Attorney General recommends a contract clause saying the contract can't be modified without the written consent of both parties, and putting major changes in writing before work proceeds. DLI's tips say every change should be a written change order you sign.
Ask how they price changes, whether the schedule effect is shown, and what happens when something unexpected is found behind a wall. In a basement that usually means water, an old wiring splice, or a duct that won't fit the soffit planned for it.
What warranty do you give on a finished basement?
Two layers apply. Minnesota's statutory warranties under chapter 327A, as summarized by the Attorney General, start when a home improvement project is completed and cover one year for faulty workmanship and defective materials, two years for faulty installation of plumbing, electrical, heating and cooling systems, and ten years for major construction defects, with a notice process that starts with telling the contractor in writing within six months of discovering the problem. On top of that, a contractor can offer its own written warranty.
Ask what their warranty covers, how long it lasts, how you file a claim, and whether they hand over manufacturer warranties for flooring, windows, fixtures and fans at closeout.
How will you control dust and clean up?
Finishing a basement makes a lot of dust, and most of it is drywall. The Attorney General recommends addressing debris removal in the contract. Beyond that, ask practical questions: how they'll protect the stairs and the main floor, where the dumpster or debris pile goes, how they'll keep sanding dust out of the furnace, and what a final clean includes. The basement is next to your furnace, so it's worth asking what they do about the filter and return air during sanding.
Can I talk to recent clients and see your record?
Ask for references from recent basement projects and call them. The Attorney General suggests calling former customers, checking with the Better Business Bureau and searching Minnesota court records for lawsuits or judgments. DLI adds asking for a Minnesota business address, not a P.O. box, and a local phone number, and checking the contractor's litigation history on the state court system's website.
When you call a reference, ask what changed during the job and how it was handled. That tells you more than whether they liked the result.
Basement contractor checklist: questions, why they matter, and what a good answer sounds like
| Question | Why it matters | A good answer sounds like |
|---|---|---|
| What is your Minnesota license number? | A residential building contractor or remodeler license is required for multi-trade work for homeowners; the Recovery Fund only covers licensed contractors | "It's CR or BC followed by the number, and it's on our contract. Look it up on DLI's site." |
| Can I see your liability and workers' comp certificates? | You may be liable if an uninsured worker is hurt on your property | "Yes, here they are, in our company name, current through the end of the job." |
| Who pulls the permits? | Whoever pulls the permit is responsible for code compliance | "We pull building and trade permits and meet every inspector." |
| How do you handle lien waivers? | Unpaid subs and suppliers can lien your house | "The lien notice is in the contract, and you get waivers with each payment and before final." |
| Who are your subcontractors? | The Attorney General recommends listing them in the contract | "Here are our electrical, plumbing and HVAC partners and their license numbers." |
| What is the payment schedule? | A large upfront payment is a stated red flag | "A modest deposit, then payments at inspected milestones, final after the final inspection." |
| What are the start and completion dates? | Dates in writing give you a basis to ask questions | "Start week of X, done about Y weeks later; here's what could move it." |
| How do you price and approve changes? | Minnesota requires change orders in writing | "Written change order with price and schedule effect, signed by you before we start." |
| Who is my contact, and how often will I hear from you? | Missed selections and silence cause delays | "Your project lead, a weekly update, and a list of decisions with due dates." |
| What warranty do you provide? | Your contract warranty adds to the statutory one | "Here's our written warranty, and you'll get every manufacturer warranty at closeout." |
| How do you control dust and clean up? | Drywall dust travels through the house | "Protection on the stairs, filter care during sanding, daily sweep, final clean." |
| Can I call recent basement clients? | Past customers show how problems were handled | "Here are three from this year. Ask them anything." |
What should you check before you sign?
- The bid describes the work, materials and total price in writing, as Minnesota Statutes 326B.809 requires, and you've received the written performance guidelines.
- The license number on the contract matches what you found in DLI's lookup.
- The lien notice is in the contract if subcontractors or suppliers will be used.
- Oral promises are in the paper. The Attorney General warns that anything left out may become a costly extra.
- If the contractor approached you first, you have a three-business-day right to cancel, according to DLI.
- Don't sign an estimate or authorization form until you've decided to hire; DLI notes these are often binding contracts.
For what each line of the bid should say, see our companion guide on how to read a basement bid, and the basement finishing cost guide for what each line typically costs.
How does this play out in a typical Twin Cities basement?
Picture a 2004 house in Maple Grove: poured walls, 8 ft ceilings, a beam with the duct trunk beside it, a sump in the corner, about 1,100 sq ft. The plan is a family room, a guest bedroom with a new egress window, a bath and storage.
That job touches almost every question above. The egress window needs its own permit in many cities and an excavation, so ask who digs, who pulls that permit and when the window goes in relative to framing. The bath may need an ejector pump, so ask which licensed plumber does the work and whether waivers from that plumber come with each payment. The new bedroom needs heat and air, so ask whether the HVAC partner adds supply and return runs or just a register off the trunk. The furnace sits next to the drywall sanding, so ask how they'll protect it. If a contractor answers those specifically, you've likely found one who plans the work before starting it.
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Design my basement with EmmaQuestions people ask
Does a basement contractor need a license in Minnesota?
Yes, if they contract directly with you for work in more than one skill area, which describes nearly every basement finish. Minnesota requires a residential building contractor or remodeler license from the Department of Labor and Industry. Single-skill specialty contractors generally don't need that license, though trades like electrical and plumbing carry their own.
How do I look up a contractor's license in Minnesota?
Use the Department of Labor and Industry's license and registration lookup: continue as a guest and enter the license number. A current license shows "Issued," and the system can show enforcement actions. Residential contractor license numbers start with BC, CR or RR; an "IR" number is a registration, not a license.
What is the Minnesota Contractor Recovery Fund?
A state fund that can compensate homeowners for out-of-pocket losses caused by a licensed residential building contractor or remodeler, such as fraud, conversion of funds or failure to perform. You need a court judgment against the contractor first, and the contractor must have been licensed when you signed and when the work was done. Hiring an unlicensed contractor means you can't use it.
What is a lien waiver, and do I need one for a basement?
A lien waiver is a signed statement from a subcontractor or supplier giving up the right to file a mechanic's lien for work they've been paid for. In Minnesota, subs and suppliers who aren't paid can lien your house, so collect waivers with each progress payment and before the final payment. With a valid waiver, you generally can't be made to pay twice.
Should I hire a contractor who asks me to pull the permit?
Be cautious. Minnesota's Attorney General lists asking the homeowner to obtain permits as a red flag, because whoever pulls the permit is responsible for code compliance. A licensed contractor finishing your basement should pull the permits and meet the inspectors.
What questions should I ask a basement contractor's references?
Ask what changed during the job and how it was handled, whether the schedule held, how cleanup and dust were managed, and whether they'd hire the contractor again. Minnesota's Attorney General also suggests checking court records for lawsuits or judgments.
Sources (9)
- Minnesota DLI: Residential contractor licensing — Who needs a residential building contractor or remodeler license, remodeler vs building contractor, exemptions, required liability coverage and workers' compensation proof, subcontractor registration
- Minnesota DLI: License and registration lookup — How to use DLI's iMS lookup, Issued status, enforcement actions
- Minnesota DLI: Tips for hiring a contractor — License number prefixes BC, CR, RR and IR, DLI phone numbers, written contract checklist, payments, references and Minnesota address, court records, three-business-day cancellation, authorization forms
- Minnesota DLI: Contractor Recovery Fund — Contractor Recovery Fund purpose, licensed-contractor requirement at signing and during work, judgment required
- Minnesota DLI: Contractor Recovery Fund fact sheet (PDF) — Recovery Fund per-claimant and per-licensee limits, judgment and two-year application deadline
- Minnesota Attorney General: Home Building and Remodeling handbook (PDF) — License number on contracts, unlicensed contractors and liens, insurance and workers' comp advice, permits and code compliance, listing subcontractors, dates, change orders, lien waivers, 120-day lien statement, one-year foreclosure, 15-day itemization, chapter 327A warranties, references, cleanup
- Minnesota Statutes 514.011: Mechanic's lien notices — Contractor lien notice in the written contract or within ten days, subcontractor 45-day notice, 120-day withholding unless lien waivers are provided
- Minnesota Statutes 326B.809: Written contract required — Contracts and change orders in writing with services, materials and price; performance guidelines
- City of Blaine: Basement and room finish permits — Example city: general contractor obtains permits, plumbing and mechanical contractors listed and licensed, separate electrical and window permits
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- How does finishing a basement actually go, and what should you fix before the walls go up?
- What does a basement bedroom need to be legal in Minnesota?
- What does $50K, $65K or $80K buy in a Twin Cities basement?
- How much does it cost to finish a basement in the Twin Cities? (2026)
- How do you keep a finished basement from getting moldy?