How to spot a cowboy builder: red flags with construction companies

Five signs that should make you stop

1. 100% advance deposit

A reputable construction company works with deposits linked to the progress of work, for example, a smaller amount at the start and the remainder after individual phases and handover. A demand for the full amount in advance, before any work begins, is one of the strongest signals that the company is managing its own cash flow, not your flat.

2. No contract, just an agreement over the phone

We don't need to sign anything; I trust you" sounds friendly, but it works only one way, without a contract, you have nothing to enforce if the deadline is delayed by three months or the work does not meet the specification. A standard works contract with deadlines, price and penalties for delay is not bureaucracy; it is basic protection for both parties.

3. "We'll start straight away

A company with references and a full calendar is usually booked solid for weeks or even months ahead. If someone is willing to come tomorrow, ask why: either they have no other job at the moment, which may be an innocent coincidence, or they are taking on work beyond their capacity, meaning it will be done at the expense of quality or another ongoing job.

4. References that cannot be found

We have been doing this for 15 years, with satisfied customers all over Prague" is a statement, not proof. A functional reference has an address, contact details for the owner and before/after photos. If a company offers a reference but refuses to provide the owner's contact details, or claims the reference flat "has already been sold and the owner moved out", treat it as a question mark.

5. Cash without a receipt

Payment outside of a bank account and without an invoice deprives you of proof that you have paid at all, and in the event of a complaint, of any possibility of seeking redress. A company that systematically prefers cash payments without documentation usually has a reason for avoiding a paper trail.

How our inspection works

Before we forward your enquiry, every company must pass seven filters: an active trade licence for construction work, a clean insolvency register entry for both the company and its directors, valid liability insurance, verifiable references for your apartment type and size, manually read reviews, tax compliance, and a standardised contract template. Any firm that fails these checks will never reach your email inbox, for details on exactly what we check, see sedmi filtrech on the homepage.

Verification does not reduce the risk to zero: no one can promise that without lying. It does, however, lower the chance of encountering any of the five warning signs mentioned above, as these usually appear in the insolvency register or in untraceable references before you sign anything.

A company that cannot handle seven simple filters will not be able to manage a reconstruction costing one million Kč either.

How to verify a company yourself

A basic check can be done independently, but this takes time that our verification saves. The Commercial Register shows how long the company has existed and who the director is. The Insolvency Register reveals whether insolvency proceedings are ongoing against the company or its director. The Trade Register confirms whether the company holds a regulated trade for construction work, not just an unregulated trade for "preparatory and finishing construction work".

The final step that is most difficult to fake is a phone call to a reference - not an email, but a phone call. A rogue trader can also be identified by how quickly they refuse to provide contact details for a reference or how evasive their answer sounds when asked "when was the last time you were there?".

Another good indicator is the format of the price quotation. A budget listed on a single line - "complete reconstruction 450 000 Kč" without an itemised breakdown, is difficult to check and even harder to claim against. Conversely, a quotation broken down by phases and materials shows that the company can justify its own calculation.

Before you begin, also read real renovation schedule and indicative prices depending on scope, so you know what constitutes a reasonable offer and what does not.