Do You Have to Tell the Client You're Subcontracting?

No law requires you to proactively disclose subcontracting to a private client in most jurisdictions. The real question is what your prime contract says - because if that contract includes a clause requiring consent or notification before you subcontract, that clause is what governs, and breaching it is a real problem. The law itself is permissive; the contract is where the actual obligation usually lives.

I have run construction arbitrage - winning prime contracts and subbing out the physical work - across hundreds of jobs. Most clients have no idea and have no right to know under the contract. Some commercial contracts require a conversation. The skill is knowing which situation you are in before you sign.

What the law actually says about disclosing subcontracting#

Subcontracting is standard and legal everywhere. No law in the US, UK, Canada, or Australia says you must proactively inform a private client that you are subcontracting the work. The main contractor model - winning the job, subbing the trades, keeping the spread - is how the whole industry works, from sole-trader GCs to tier-one commercial builders.

What the law does say, universally, is this: you remain fully liable to the client for the subcontracted work. The client's contract is with you. When a sub does bad work, the client calls you. You can pursue the sub for indemnity through your subcontract - and a well-drafted subcontract will give you that right - but that does not remove your primary obligation to the client. The accountability stays with whoever signed the prime contract.

That is actually the right frame for any client conversation about subcontracting. Your value is not personal labour. It is accountability, coordination, and the guarantee that the job gets done right. You own that regardless of who holds the tools.

When your contract requires you to disclose or seek consent#

This is where the practical answer lives. Many prime contracts - particularly in commercial, institutional, and public sector work - include a subcontracting clause that places conditions on who you can use and how. Read the subcontracting clause before you sign the prime contract, every time.

Common clauses you will encounter:

Consent to subcontract. The contract requires the client's written approval before you subcontract significant portions of the work. Some require a blanket approval at the start; others require approval trade by trade. If this clause exists and you subcontract without getting the consent, you are in breach. The client can potentially terminate the agreement, withhold payment, or claim damages.

Notification requirement. Less restrictive than consent - you must inform the client that you are subcontracting and who to, but you do not need active approval. Read the clause precisely. Notification after the fact is not the same as notification before.

Approved subcontractor list. The contract names specific companies or requires that subs meet certain criteria - minimum insurance thresholds, particular certifications, or pre-qualification with the client. If the contract says subs must be pre-approved, using an unapproved sub is a breach even if the work is excellent.

No subcontracting clause. Rare but it exists, usually in contracts where the client specifically hired you for your personal expertise or relationship. In that case, subcontracting may constitute a fundamental breach. If you see this, do not sign it as a construction arbitrage operator.

On smaller residential and trade jobs - kitchen renovations, bathroom refits, painting, landscaping - the contract is often a simple one-page agreement or a quote accepted by email. These contracts rarely address subcontracting at all. In that case, the default legal position applies: you can subcontract without disclosure.

California: disclosure on request#

California is the clearest example of where state law adds a specific disclosure rule. Under SB 517, licensed contractors on home improvement contracts must disclose subcontractor information upon the client's request. If a client asks who the electrician is, what their license number is, or how to contact them - you must provide it. The required details are: name, contact information, license number, and license classification.

This is a disclosure-on-request obligation, not an upfront duty to volunteer the information. You do not need to hand the client a sub list when you show up on day one. But if they ask, you must answer. And because you are the contractor of record, you remain responsible for ensuring every sub you disclose holds a valid CSLB license in the correct trade class.

The practical takeaway: if you are working on California home improvement jobs, know your subs' license numbers before work starts. The CSLB's online verification tool gives you their status in seconds. That check protects you twice - against client disclosure requests and against the licensing liability I covered in is it illegal to subcontract work without a license.

UK: no general disclosure requirement, but read the contract#

UK law has no blanket requirement to tell a client you are subcontracting on private construction work. Main contractors have subcontracted trades for as long as the industry has existed - it is entirely standard practice and the law does not require disclosure.

The contract governs. Standard JCT forms - the most commonly used in the UK - permit subcontracting as a default on most trades. There is one specific exception: JCT design-and-build contracts include a clause (previously numbered 3.7.2 in the JCT DB form) that requires the employer's consent before the contractor subcontracts the design portion of the work. If your contract is a design-and-build arrangement, flag this before you sub out any design work.

For named subcontractors - where the client specifies which company they want for a particular trade - JCT allows the employer to list approved options. The contractor picks from that list. This is the client influencing the sub selection without retaining direct liability for the sub's performance, which stays with you as the main contractor.

The CIS compliance requirement is separate from disclosure. Before you pay your first sub in the UK, register with HMRC as a CIS contractor. Verify every sub's status with HMRC before their first payment. File monthly returns. That is the compliance layer that matters here - not a disclosure obligation to the client. Full CIS detail at GOV.UK.

What happens if a client asks directly#

This is where every construction arbitrage operator needs to be clear-headed. The legal question and the practical question are not the same.

Legally, in most cases you are not required to disclose. But if a client asks directly - "are you doing this work yourself or are you using subcontractors?" - you must answer honestly. Telling a client you will personally perform work that you plan to subcontract out is misrepresentation. That creates legal exposure well beyond a simple disclosure question: it can void the contract, open you to a fraud claim, and torpedo a client relationship you worked to build.

The honest answer is also the professional one. Most clients do not care who physically performs the work. They care that the job gets done on time, to spec, and without drama. When someone asks, I tell them plainly: I coordinate specialist trades for every job, which is how I can guarantee the right person for every element of the project. That is not a weakness. That is the value proposition of the model.

The client is buying the outcome and the accountability - not the person holding the tools. Own that frame and you will never feel awkward about how you run the operation.

The practical checklist before every prime contract#

Before you sign any prime contract, go to the subcontracting clause and ask three questions:

1. Does this require consent to subcontract? If yes, get it in writing before you start.
2. Does it require notification? If yes, document the notification and when you sent it.
3. Does it specify required standards for subs - insurance thresholds, certifications, pre-qualification? If yes, confirm your subs meet those standards before you assign them.

On residential jobs with no formal contract, the answer is typically: no restriction. On commercial jobs with proper contracts, the clause will be there. Find it and read it.

For the full picture of what the law says about subcontracting the physical work itself, see can a general contractor subcontract all the work. For the licensing compliance layer that sits underneath both questions, see do you need a contractor license for construction arbitrage. And for the global legality picture of the model, is construction arbitrage legal is where to start.

The next step#

If you are running this model and want the practical side - how to handle client conversations, how to structure your prime contracts, how people are actually managing this at scale - the room where that gets done is Construction Arbitrage Players on Skool.

The complete system, including the contract and compliance layer, is in THE FAMILY SECRET - How Construction Arbitrage Really Works, coming soon.

This is general information, not legal advice. Disclosure requirements, contract law, and CIS rules vary by jurisdiction and change. Verify with a qualified construction solicitor, attorney, or the relevant licensing authority before entering any prime contract.

Last checked: 4 July 2026.