Real estate contractor license

Real estate contractor license DEFAULT

Contractor License from the Régie du bâtiment du Québec (RBQ license)

Whatever your needs as far as a contractor license from the Régie du Batiment du Québec (RBQ), we are there to assist you. We can counsel you with respect to the application criteria concerning your activities, your real estate projects or as to your qualification and the obtaining of the required license.

Our team will guide you in understanding the Building Act and its regulations.

  • Guidance and legal advice regarding your qualification and the obtaining of a contractor license
  • Review and analysis of the application criteria of the Building Act and its regulations
  • Preparation of applications for contractor licenses
  • Coordination of the contractor license process at the RBQ and the new home warranty plans with the Residential Construction Guarantee (la Garantie de construction résidentielle – GCR)
  • Renewal of contractor licenses and guarantees required under the guarantee plans and ancillary guarantees

YOUR TEAM

CATHERINE DEMERS

https://www.gascon.ca/en/catherine-demers/

CATHERINE DEMERS

Attorney

Gascon
AUDREY ROBITAILLE

manually,https://gascon.ca/en/audrey-robitaille/

AUDREY ROBITAILLE

Attorney, Partner

Gascon

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Sours: https://www.gascon.ca/en/contractors-license/

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On June 1, , the California Contractors State License Board (CSLB) will start accepting applications for a new classification of licensees – Class B-2 Residential Remodeling. The CSLB will continue to offer the Class B General Building license classification. The B-2 will be available to those whose principal contracting business involves working on existing homes with residential wood frame structures that require at least three unrelated trades or crafts for a single contract. Governor Gavin Newsom signed Senate Bill  into law on September 30, , adding this classification.

The Class B-2 license will enable licensure to those who are currently working on remodeling and small home improvement projects but that do not have the requisite experience to qualify for a Class B General Building license, lacking the requisite framing and rough carpentry experience. According to the CSLB, to qualify for the Class B-2 license, contractors and applicants will need at least four years of experience working in three or more trades or crafts for residential remodeling projects. As is the case for other classifications, contractors and applicants can substitute up to three years of the experience requirement with qualifying education. Contractors and applicants will also need to take and pass the requisite law and B-2 exam, as well as comply with any other licensure requirements (e.g., bonds, insurance, fingerprints, etc.).

According to the CSLB, the Class B-2 license has the following restrictions, including that the licensee will be limited to working on existing residential wood frame structures and will not be authorized to:

  • make structural alterations to load-bearing partitions and walls;
  • install or extend electrical or plumbing systems, but can make modifications to existing systems (e.g., install recessed lighting or alter plumbing for two shower heads); or
  • install or replace a heating, ventilation, and air conditioning (HVAC) system.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Why create an account?

Gerald L.

Gerald L.

from Los Angeles, California

posted about 9 years ago

I have an interest in buying foreclosed property, developing it than reselling it. Do you guys suggest i get my RE license first or get a contractors license first. sorry for the ignorance. but i can only take one class. and the contractors classes are filling up quickly.

J Scott

Top Subjects:
Rentals, Team, and Traditional Financing

J Scott(Moderator) -

Developer from Sarasota, FL

replied about 9 years ago

Why do you want to get either license at this point? What are your long-term goals? What would you do with those licenses?

Steve K

Steve K

Investor from Orlando, Florida

replied about 9 years ago

A contractors license will only benefit you if you're dealing with at least a few rehabs per year that require a permit to be pulled. I haven't calculated the cost this year but i'd estimate my annual cost to hold a contractors license is around $k per year. This number will change from state to state based on a number of factors.

If I were you and wanted one of the licenses i'd probably start with the RE license so at least you can gain access to MLS, handle your own property viewings, and kick your commission back into your deal.

Gerald L.

Gerald L.

from Los Angeles, California

replied about 9 years ago

I want RE license to gain access to mls and gain understanding in the buying and selling aspects of the business.
I want the contractors license to be able to determine quotes myself and be able to sort out general good and bad types of contractors.
I am assuming by going to the classes they will teach me the fundamentals of each practices. Thereby establishing me in a better position than someone who has no prior knowledge.
My long term goals are to move from single family homes to multi-family to apartment buildings. I would be rehabbing if necessary and doing the work myself if possible.
I know i sound young and naive, but that is because i am. I'm 26 and i only have k to start. So please feel free to slap me with some reality.
It's either i get into this business or open a laundromat. (which may require more depending on various circumstances)

Thank you for listening.

Account Closed

Account Closed

replied about 9 years ago

You don't really need either to be in this business, so why waste your time? Your reasoning for getting both licenses, from what I understand is to gain experience. You will not learn anything just by studying the RE or GC exam and getting the license.

What you are looking, you can teach yourself through this website, a little trial and error, and going out there and doing deals. I would focus on that.

As for making your decision, I vote Real Estate. Its More interesting then washing clothes. :-)

J Scott

Top Subjects:
Rentals, Team, and Traditional Financing

J Scott(Moderator) -

Developer from Sarasota, FL

replied about 9 years ago

If you plan to seriously pursue real estate investing and plan to buy properties off the MLS, then I think it's a great idea to get a real estate license. But, it's a decent amount of time, effort and money to do so.

As for a GC license, they don't teach you anything about contracting when you take those courses -- in fact, in most places, you need to have a lot of experience and apprenticeships in contracting before you'll even be considered for a GC license. If you don't have extensive construction experience, you probably aren't ready to go down that path.

Michael Pilarski

Top Subjects:
Flipping, Real Estate Finance, and Traditional Financing

Michael Pilarski

Investor from Murfreesboro, Tennessee

replied about 9 years ago

@Gerald L. I was contemplating the same thing you are, but decided to not get either after reading on this site extensively. You have one very good thing going for you at the moment and that is cash. I would get involved with your local REI club and find out who the investor friendly agents are. You may even want to ask on this site since there are a few people on here in your area. I would also venture to say that taking the GC class does not necessarily make you a good contractor or able to make accurate quotes. I would call a few GC in the area and see if you could stop by one of the work siites or take them out for a beer and ask them some questions. This business is all about who you know and integrity. What type of real estate investing are you wanting to do? J Scott is an expert at flipping and rehabs in his area and has since started branching out to other areas. Ask him some things you'd like to know?

Gerald L.

Gerald L.

from Los Angeles, California

replied about 9 years ago

After contemplating all of your great responses, i am going to passively pursue a RE license. Just to get access to a mls. One more question for you guys, with k should i leverage and buy a couple cheap multi units to collect rent. buy 1 foreclosure or REO, at 40% below mkt value with some money left to pay taxes and some repairs.

Karen Margrave

Top Subjects:
Team, Rentals, and Single Family

Karen Margrave(Moderator) -

Realtor, General Contractor, and Developer from Redding CA

replied about 9 years ago

@Gerald L. Classes teach you what you need to know to pass the test period. You need to learn the trades to know the business, and that comes from putting time in and gaining experience. Having a license also puts an added burden of liability on you, as you are considered an "expert". If you don't have the knowledge to stand up to the expectation, don't get licensed. It's much cheaper to pay another contractor or real estate agent, that actually knows the business than it is to defend a lawsuit caused by something you missed or didn't know.

In California you cannot take the test to be a contractor without another contractor or someone signing a verification that you have the required experience in the field.

Sours: https://www.biggerpockets.com/forums/41/topics/real-estate-license-or-contractors-license
How To Start a Contracting Business and Have Success Immediately

Get the Latest News &#; Industry Insight from Crest!

If you’re interested in constructing homes and completing renovations, you may want to look into earning a contractor license in California. A licensed contractor is someone who has the expertise, education, and training necessary to perform remodeling projects, repair projects, and large home construction projects. Because of the many types of projects that a contractor can handle in California, numerous contractors choose a niche to focus on. For instance, a contractor may specialize in new home construction projects.

There are three main license typesavailable to you when seeking a contractor license, which includes class A, class B, and class C licenses. Class A licenses are available for general engineering contractors, while class B licenses can be sought by general building contractors. As for class C licenses, these licenses are available for specialty contractors. When you obtain one of these licenses, you can only perform the type of work that’s allowed under the license guidelines.

Keep in mind that not every remodeling or construction project requires a licensed contractor. In the event that the total costs for the project amount to $ or less, the contractor the homeowner hires doesn’t need to have a license. On the other hand, licensed contractors are always going to be more reliable and reputable than unlicensed ones. This article provides you with a closer look at what it takes to earn your contractor license.

Qualifications When Becoming a Contractor

qualifying to become a contractor

In order to become a licensed contractor in California, there are numerous requirements that you must meet. If you want to qualify for this type of license, you will need to be at least 18 years old. It’s also important that you’ve gained four or more years of the appropriate education or experience. While there aren’t any strict financial requirements for a contractor license, you will need to obtain a $15, bond before you’re able to get your license. A contractor bond is a monetary guarantee that you will adhere to all regulations and standards that a licensed contractor is expected to abide by.

If you find that you are unable to meet these requirements, you could qualify for a contractor license when working under another license holder. Since this individual is qualified to be a licensed contractor, they will serve as the qualifying individual for your license.

Before seeking a contractor license in California, you should also be aware of the reciprocity agreement that the state maintains. California has reciprocity agreements with Utah, Nevada, and Arizona, which means that someone who lives in one of these states may be able to apply for a California contractor license if they meet the rest of the requirements. The main requirement for someone seeking this type of license is that the trade and scope of the work must not vary when seeking a California contractor license. If the out-of-state contractor requirements are identical to the requirements held in California, it will be easier for you to obtain a license.

When you’re trying to make sure that you have the necessary experience to qualify for a contractor license, it’s important that the experience you have is at least journey-level experience. You must obtain four years of experience in the last 10 years. If you only have three years of experience over the past decade, you won’t qualify for this license.

The types of experience that are accepted when qualifying for a contractor license include journeyman, contractor, supervising employee, owner-builder, and foreman experience. Once you have the necessary experience, you can think about taking the licensing exam, which lasts for hours and covers a wide range of subjects.

Three General Classifications for the California Contractor’s License

three types of contractor's license

As mentioned previously, there are three general classifications that are available with a California contractor license. The three classifications that you can select from include:

  • Class A license – This license is available for general engineering contractors and is required for people who want to perform work that involves specialized engineering skills and knowledge. In fact, you can only work as a contractor or subcontractor on projects where this type of knowledge is necessary. The work that a class A contractor does can pertain to harbors, railroads, streets, airports, irrigation, bridges, and sewers.
  • Class B license – This is the most popular type of contractor license in California and is available to people who want to be general contractors. Class B contractors can enter into contracts that involve carpentry or framing. Someone with a general contractor license can work on all kinds of projects aside from ones that involve C well drilling or C fire protection.
  • Class C license – The class C license is available to anyone who wants to be a specialty contractor. There are around 60 different specialties that you can focus on when seeking this type of license, which include everything from masonry and fire protection to roofing and refrigeration. It’s important that you know exactly what kind of work you’d like to perform when applying for a class C license. Someone who has this type of license can only work on projects where their specialty is required.

Exemptions for a Contractor’s License

exemptions for a contractor's license

If you’re unsure of the need to obtain a contractor license, there are some exemptions that allow you to complete contractor work without having a license. These exemptions depend on the type of work that’s being performed and the person who’s doing the work. The main types of exemptions that you should be aware of are listed below.

Employee exemption

An employee may not be required to obtain a contractor license if they have no control over the final work results and if they don’t work in a business that’s been independently established.

Minor work exemption

As touched upon previously, you don’t need to have a contractor license to perform work that costs $ or less. Keep in mind that this exemption refers to total project costs. Work can’t be separated into smaller projects that are estimated at $ or less to qualify for this exemption.

Owner-builder exemption

When an owner-builder wants to improve an existing structure or build a new one on a property that they own, they can use employees or perform the work themselves without needing to obtain a contractor license. However, this exemption is only possible if the structure won’t be sold in the year following its completion.

Public employee exemption

If public employees are performing work on public projects, a contractor license isn’t required.

Owner-builder contracting exemption

This exemption applies when the owner-builder wants to hire a licensed contractor who can complete the project.

Manufacturer exemption

When a manufacturer installs or sells a finished product, a contractor license isn’t needed as long as the product isn’t added as a fixed part for the structure in question.

Owner-builder main residence exemption

If an owner-builder wants to improve their main residence, they can do so without a license. However, they need to have lived in the residence for at least one year. The exemption can only be applied to two homes in three years.

Applying for a Contractor’s License

When you want to apply for a contractor license in California, you can file an application on your own or alongside a qualifying individual. This application is known as the Application for Original Contractor License. The examination is waived if you’re applying with a qualifying individual. In the event that an examination is necessary, you will need to pay several fees to the CSLB. These fees include processing fees, a classification fee, and an initial licensing fee. You can submit your application by mail or in-person to the CSLB. The CSLB office is located at Business Park Drive in Sacramento, CA.

The examination that you may need to take is centered around business and written law as well as the specific trade that you’re applying for. This exam lasts for around hours and is comprised solely of multiple-choice questions. There are many examination centers that you can attend, which include locations in San Diego, San Jose, Fresno, Norwalk, Sacramento, Oxnard, Oakland, and San Bernardino. Once your submitted application has been approved, the CSLB will send a notice that requests you to appear for the exam. This notice will include a comprehensive study guide that should help you prepare for the exam.

There are times when the exam could be waived by the CSLB. For instance, you could receive a waiver if you’re currently licensed and already have the same type of classification for the license you’re applying for. The same is true if you’ve been in good standing for this type of license at some point in the past five years. You might also be able to obtain a waiver if you’re an employee of an LLC or corporation and have worked as a contractor in a supervisory capacity.

Even if you’re eligible for a waiver, you must still fill out the experience section that’s found on the application. While it can take time to qualify for a contractor license, the steps you need to take to become a licensed contractor are simple and to the point. Once you meet these qualifications, make sure that you’re confident about the type of contractor you want to be before submitting your application.

Jason Somers, Crest Real Estate

Jason Somers, President & Founder of Crest Real Estate

With over 15 years of professional experience in the Los Angeles luxury real estate market, Jason Somers has the background, judgement and track record to provide an unparalleled level of real estate services. His widespread knowledge helps clients identify and acquire income producing properties and value-ad development opportunities.

Learn more about Jason Somers or contact us.

Sours: https://www.crestrealestate.com/obtaining-a-contractor-license-in-california/

Contractor license estate real

Thinking About Getting Your Real Estate Contractor&#;s License? Here&#;s What Investors Need To Know

Today’s real estate investors are expected to wear many hats, not the least of which may benefit from a real estate contractor license. From marketing on social media to executing precision selling strategies, there isn’t an integral component to investing that the average real estate investor isn’t intimately familiar with. In fact, you could very easily argue that today’s most prolific investors are those that have expanded their knowledge to account for anything and everything they may be confronted with over the course of a typical deal, which begs the question: Do I need a contractor&#;s license to flip houses?

With a real estate contractor license, it stands to reason that investors would be more equipped to handle an average, everyday rehab. After all, it can’t hurt to know how to remodel a bathroom or install some intriguing sizzle features. Can it? While the answer is almost a resounding no, some pros and cons need to be weighed before getting a real estate contractor license.

Quite honestly, it’s not really a question of whether or not you should get one, but rather if it’s worth it or not. While having a license can only help your prospects moving forward, there are some things you need to take into consideration. Namely, how you view your strategy moving forward. Are you going to treat real estate investing as an occasional hobby or like a business?

Do I Need A Contractor&#;s License To Flip Houses?

No, you do not legally need a contractor&#;s license to flip houses. There is absolutely no need to have a contractor&#;s license to flip houses. No state, or municipality for that matter, will require anyone to have a contractor&#;s license to flip houses. That said, a contractor&#;s license is a great tool to have for anyone that intends to flip houses. With a license, investors may work on the individual assets themselves instead of hiring a contractor. In fact, some investors prefer working on their own properties, but doing so will certainly take a lot more time. As a result, there’s an argument to be made that hiring a licensed contractor is more worth their while. After all, time isn’t just money; it’s everything.


[ Interested in learning how to flip houses?Register to attend a FREE real estate class and learn how to get started, right here in your local area. ]


Real estate contractor

Should I Get My Real Estate Contractor License?

The answer to this question lies in what you hope to accomplish. You see, whether or not you should get your own real estate contractor&#;s license will depend largely on what you want out of your career as an investor. For example, do you want to simply flip a single home, or do you have aspirations of running a successful home flipping business?

If you are content flipping a single property, I could argue that getting your real estate contractor license would be well worth the time and money it takes to do so. That said, I also think a real estate contractor license would benefit anyone looking to flip homes regularly. All things considered, it’s not so much a question of whether or not you should get licensed to contract, but rather if it’s worth it or not. Believe me, there is a difference. As I already alluded to, investors stand to benefit from obtaining their own real estate contractor license. If for nothing else, it’s better to have a license and not need it than to need it and not have it.

Benefits Of Getting Your Contractor&#;s License

  • Save money on labor

  • Work at your own pace

  • Higher profit margins

  • Network with other contractors

The most obvious benefit should go without saying: saving money on labor. If you are, in fact, licensed, it stands to reason you wouldn’t have to hire anyone to complete the jobs you are licensed to deal with yourself. That means you can save a significant amount of money on the rehab process. If you had your own real estate contractor license and were qualified for the specific task at hand, there’s no reason you couldn’t do the job yourself and save on the overhead that would come with hiring a professional. There’s also something to be said about doing a job the way you intended it to be done.

If you are intent on flipping a single home every now and then, you may benefit immensely from becoming a licensed contractor. Not only will you be able to save money on contractor costs, but you’ll be able to work at your own pace. It’s worth noting, however, that if you want to turn real estate investing into anything more than a hobby, it may not be worth getting your own real estate contractor license. You may be better off hiring professional contractors than becoming one yourself. That’s because, as an investor, your time may be better spent elsewhere: on activities that actually bring in money, like bringing in leads for example.

You see, as an investor, your time is invaluable; it’s not only money, it’s everything. Therefore, you need to make absolutely certain that you are spending your time on the most important activities for your company. And while it might seem like a good idea to save money on a contractor by doing everything yourself, you are essentially detracting from other aspects of your business. Inevitably, if you are working on the house, you can’t be bringing in new leads or discovering new ways to make money. So, you see, while having a contractor’s license is almost always a good idea, it’s not always smart to use it. Sometimes it pays to hire a professional; that way, you can be left to do more important things.

How To Become A Licensed Contractor In 5 Steps

If that wasn’t enough, there are more factors one needs to consider before they act on their intention of becoming a licensed contractor. For starters, obtaining a contractor’s license takes time. It is safe to assume becoming a licensed contractor will take most people up to five years. More specifically, it can take somewhere in the neighborhood of three years to complete an apprenticeship in a particular trade and a few more years after that to get to the point where you’re comfortable starting your own business. Even completing a degree in construction management can run upwards of four years or more.

Regardless of the path you take, you are looking at an investment of at least a couple of years, if not nearly half a decade. During that time, you’ll have to meet several criteria, not the least of which include:

  1. Choosing a class and specialty: Most states will require you to apply for a contractor’s license of a certain class. More often than not, the class will determine the monetary value of projects you will be able to work on. Next, you will have to choose a specialty, if desired. However, as an investor, it may be best to stick with the most common classification: the general contractor.

  2. Name and register your company: To practice as a licensed contractor, you must register your company with your state and/or local authorities. The license will certify that your company is legally able to operate in a given state.

  3. Pass a contractor’s examination in your state: Each state will have a test, or series of tests, that one must pass to operate a contractor’s business legally.

  4. Pass a background check: It’s not uncommon for most states to require their applicants to pass a criminal background check before they can receive their license.

  5. Submit your application: Once all of these steps have been completed, it’s time to submit your application. Provided you meet the requirements, you will receive a license to operate as a contractor in your state.

The process outlined above is a general guideline and by no means a step-by-step process for each state. In fact, each state’s requirements will vary dramatically, but the above illustrates that receiving a license takes both time and money, two things not every real estate investor will be willing to give up.

In addition to the upfront costs and time investment, licensed contractors will only be able to operate in the states they are currently licensed in. Now, as a contractor, that’s not a big deal, but as an investor, it significantly limits the pool of properties you can acquire and work on yourself. Out of the gate, you are limited to investing in your own state, which could prevent you from acquiring a great flip candidate just one municipality over.

General Contractor License Requirements

License are only granted to qualifying contractors to avoid faulty or dangerous work being done. In other words, contractors must meet certain standards to qualify for a license. While the qualifications are different in every state, here&#;s an example of the requirements contractors in California must meet:

  • They must be at least 18 years of age

  • They must have a valid drivers license or U.S.A. Issued Identification

  • They must have a Social Security Number or ITIN Number

  • They can&#;t currently be on probation or parole

  • They must have at least four yeas of &#;journey&#; level experience

  • They must have a signature from a qualifying individual

  • They must have a way to prove their experience

What Do General Contractors Do?

Aptly named, general contractors have become synonymous with a wide variety of building projects in individual clients&#; homes. More specifically, however, general contractors will organize and orchestrate all of the activity taking place on their respective construction sites. It is the general contractor, after all, who will oversee the day-to-day operations and management of subsequent vendors and tradesmen, and tradeswomen.

In their simplest form, general contractors are construction managers hired by clients to oversee construction projects. They are qualified to complete the task themselves, but they usually work and coordinate with subcontractors to get the job in a timely fashion. In doing so, the general contractor will start by assessing the project at hand (everything from the physical building to the warrants and legal paperwork). Upon accepting a job, the general contractor will submit a bid for the client to consider. The bid simultaneously gives the client an idea of how much the services will cost and allows them to compare general contractor pricing.

If the bid is accepted, the general contractor will align himself with the appropriate subcontractors. The general contractor will oversee the work being done by the subcontractors and serve as the point of contact.

Summary

Becoming a licensed contractor can be a great move for any investor looking to flip properties. The experience alone could prove invaluable on a daily basis. At the very least, it’ll give you a better idea of how to approach your next rehab, but I digress. While a real estate contractor license can be a great tool for investors that know how to use it, there isn’t always a need. Most notably, today’s investors intent on flipping multiple houses at a time would be better off hiring professional contractors than working on the homes themselves. That way, you won’t hold back any projects by doing the job yourself. Instead, hiring the right professionals for the job will prove efficient while simultaneously freeing up your time for what matters the most: money-producing activities.


Key Takeaways

  • It’s not so much a question of whether or not you should become a licensed contractor, but rather it’s worth it or not.
  • Getting your real estate contractor license can be a good move for those looking to flip a low volume of properties.
  • Anyone looking to run a real estate investing business, where they are flipping several homes at a time, may not need to become a licensed contractor.
Sours: https://www.thanmerrill.com/real-estate-contractor-license/
HOW AND WHY I BECAME A GENERAL CONTRACTOR

As a general contractor, you’re responsible for making sure your projects run smoothly and your clients and subcontractors are happy.

To make sure you can focus on providing the best quality work, you’ll need have all your paperwork in order, including meeting the general contractor license requirements in your state.

While some states require you to obtain a license from the state or local government (depending on the type of work you plan to do), others don’t require any special licenses for minor repair work, such as painting or home improvement projects that cost less than $1, Since each state has such variable specifications, it’s important to carefully research everything you need to do before you spend money on an application.

You will also need to make sure you have the right general contractor insurance, which is required to get a license in many states. Your clients might also ask you to have coverage before they'll work with you. Insurance helps to protect you against claims related to property damage and injuries caused by your business. It also helps pay for court costs and legal fees you may incur to defend your business against a claim.

We’ve put together a state-by-state list of general contractor licensing requirements to make it easier for you to find what you need.

These are the main topics we’ll cover:

  • The different types of general contractor licenses 
  • How to get your general contractor’s license 
  • Requirements you’ll need for each type of contractor license
  • Insurance requirements to protect your business

The list is in alphabetical order and includes links for additional resources in each state.

Alabama

General contractors must have a state license in Alabama to work on any construction, alteration, maintenance, repair or demolition project that costs more than $50, You’ll also need a license if you work on residential projects over $10, or swimming pools over $5,

Alabama requires three references as part of the license application. You’ll also need financial statements prepared by a certified accountant and other proof that your business is registered.

The license is awarded by the Licensing Board for General Contractors. Applicants must pass a trade exam, and a business and law exam. You’ll also need to document your work experience and show proof of general liability insurance. Your application with required fees —  $ for general contractors, $ for subcontractors — must be submitted at least 30 days before quarterly board meetings.

Learn more about general contractor license requirements in Alabama.

Alaska

General contractors must hold a state license to work in Alaska. There are three classifications of licenses which are awarded by the Department of Commerce, Community, and Economic Development, Division of Corporations, Business, and Professional Licensing. These construction licenses include:

  • General Contractor with Residential Contractor Endorsement - Can oversee new home construction or can undertake residential work that is more than 25% of the value of the structure. You’ll need to complete a hour cold climate course and pass an exam.
  • General Contractor without Residential Contractor Endorsement - Can undertake commercial work or residential remodel work less than 25% of the value of the structure. No exam is required.
  • General Contractor Handyman - You’ll be able to undertake residential or commercial work valued at less than $10,

You must hold general liability insurance and worker’s compensation insurance.

Arizona

Any general contractor who builds, alters, repairs, adds to, subtracts from, improves, moves, wrecks or demolishes any structure must hold a state contractor license to work in Arizona. There are a number of different classifications of licenses awarded by the Arizona Registrar of Contractors. They include:

  • General Residential Contractors License
  • General Commercial Contractor License
  • General Dual License Contracting - includes both residential and commercial contracting license

To receive a general contractor license, you must pass the trade exam, as well as the business management exam. You must show proof of four years of experience and show proof of a bond.

Arkansas

All general contractors in Arkansas must have a state general contractor license to do any work worth more than $2, There are a number of different classifications of licenses awarded by the Contractors Licensing Board. These include:

  • Commercial License - Allows you to work on projects worth more than $50, This allows you to also do residential work in the same classification as your commercial license.
  • Restricted Commercial License - You can only work on commercial projects worth less than $,
  • Residential Builders License - Allows you to do work on any single-family residence where the work is worth more than $2,
  • Residential Remodeler Limited License - You can do home improvement work worth up to $50,
  • Residential Remodeler Unlimited License - You can do any size home improvement projects.

For all licenses, you must provide a financial statement, proof of a bond, and proof of worker’s compensation insurance. You need to pass a business and law exam. You’ll need to select your specialty or classification.

A building (commercial or residential) classification does not require a trade exam. You will require references who can detail your work experience.

Learn more about general contractor license and insurance requirements in Arkansas

California

All general contractors in California must hold a state license from the California Contractors State License Board for any work worth more than $

There are three types of contractor licenses in California: 

  • Class A General Engineering Contractor: The license for specialized engineering projects
  • Class B General Building Contractor: The license for managing projects involving two or more unrelated trades
  • Class C Specialty Contractor: The license for performing different types of construction work or particular trades. Class C contractors can’t be general contractors on projects that involve multiple trades.

You can apply for a general engineering contractor or general building contractor license. You must have had four full years of experience in the past ten years at a journeyman level or as a foreman, supervisor, or contractor, in the classification in which you’re applying.

You’ll need to show proof of a bond or cash deposit of $15,, and that you meet all the requirements before you take the trade exam, as well as a business and law exam. You’ll also have to submit your fingerprints and take an Asbestos exam. Next steps include posting your bond and showing proof of workers’ compensation insurance if you’re going to hire any employees.

Several fees are also involved, including a $ application fee and a $ license fee. Once you have a license you’ll need to renew it every two years, which costs $

Learn more about general contractor license requirements in California.

Colorado

General contractors do not need a state license to work in Colorado. However, many local governments have contractor license requirements. A good starting point is to contact the local government in the town or city where you’re going to work..

For example, Denver contractors must pass an exam, have a supervisors certificate and meet other standards set by the Denver Community Planning & Development Office. Several cities require contractors to have active insurance, as well.

There are a few different types of general contractor licenses available in Colorado but not all types are offered in every area.

The most common types of licenses are:

  • Class A license: This license allows contractors to work on any building project, no matter how big or small. 
  • Class B license: This license allows contractors to work on most residential and commercial building projects.
  • Class C license: This license limits contractors to working on residential buildings for single-family dwellings or multi-family dwellings. 

To qualify for a license, contractors will need to pass an International Code Council (ICC) exam and already have a general liability policy with at least a $, policy limit. After you’ve satisfied the requirements and your application is submitted, it usually takes a few weeks for review, depending on the municipality. Applications that were submitted through the mail system may also take longer than applications submitted online or in person.

Learn more about Colorado general contractor license requirements.

Connecticut

Connecticut does not require general contractors to hold a state license. However, if you do work on residential properties you’ll be considered a home improvement contractor and you’ll need to register with the Department of Consumer Protection.

Delaware

General contractors in Delaware do not require a trade license, but you will need to obtain a business license and register with the Delaware Division of Revenue.

Florida

As a general contractor, you must have a state license to work in Florida. The license is awarded by the Florida Department of Business and Professional Regulation.

There are different types of licenses based on what kind of classification your business falls under: 

  • A certified license allows contractors to work anywhere in the state
  • A registered license allows contractors to only work in specific areas in the state

Choose your license once you’ve decided what type of contracting work you’ll do:

  • General contractor - CG and RG - the license is unlimited regarding the type of work you can perform. You will need to show at least one year of experience constructing structures four stories or higher. You must have experience in four of seven specific categories.
  • Building contractor - CB and RB - limited to the construction of commercial buildings or residential buildings that don’t exceed three stories in height, or the remodeling, repair or improvement of any size structure.
  • Residential contractors license - CR and RR - limited to work on residences that are no more than two stories in height

You’ll need to show proof of four years of experience, or a combination of education and experience (with up to three years of education are able to substitute for experience). You must show proof of financial stability, as well as liability and worker’s compensation insurance in Florida. You’ll need to pass a trade exam, as well as a business and law exam. You may be able to register with the state and then apply for a trade license at the local, county or city level.

Florida is unique in that it requires you to pass your state certification exam before you can apply for your general contractor license. You need to schedule your exam with Professional Testing, Inc. Note that the exam is only available to be taken in February, April, June, August, October, and December.

Learn more about Florida general contractor license and insurance requirements.

Georgia

You'll need to get a contractor license in Georgia if you plan to work on projects valued at $2, or higher. The state takes a tiered approach for licenses based on the projects you're working on. You'll also have to meet minimum insurance requirements, as well as education or work experience requirements:

  • A diploma or transcript in engineering, architecture, project management, or building construction. 
  • A diploma or transcript showing college-level coursework and work experience commensurate with at least four years of university experience. 
  • At least four years of work experience in construction, of which two were working for a general contractor. 

There are four different kinds of licenses in Georgia for general contractors: 

  • General Contractor: This license is for work that exceeds $2, on private, commercial, industrial, public, and other building projects. 
  • General Contractor-Limited Tier: This allows for the same work as basic contractor license but with contract amounts of $, or less.
  • Residential-Basic Contractor: This license is limited to projects with detached one-family and two-family residences and one-family townhouses (not over three-stories) and adjacent structures.
  • Residential-Light Commercial Contractor: This license is the same as residential-basic, with the addition of projects related to multifamily and multi-use light commercial buildings and adjacent structures.

Note that for Residential Basic and Light Commercial license applications, your proof of net worth can be in the form of a $25, surety bond in the individual or business organization’s name. For all other applications, you will need a signed financial letter referenced by a certified accountant.

Learn more about Georgia general contractor license and insurance requirements.

Hawaii

General contractors must hold a state license in Hawaii to do any commercial, residential or public works that are worth more than $1, or require a building permit. The Department of Commerce and Consumer Affairs, Professional and Vocational Licensing Board awards a number of licenses including general engineering contractors (fixed works projects) and general building contractors (construction of structures using more than two unrelated trades). To qualify for a license, you must show proof of liability and worker’s compensation insurance. You’ll need to pass a trade exam, as well as a business and law exam.

Idaho

Any general contractor who performs construction work worth more than $2, must be registered with the Idaho Contractors Board. There is no state licensing requirement for general contractors in Idaho.

Illinois

Illinois does not have a state license requirement for general contractors. However, you will have to get a license and insurance before you can start work in many local jurisdictions.

For example, Chicago requires specific licenses based on the value of projects your business will work on. It also has minimum requirements for contractor business insurance.

You might be able to work out a license reciprocity agreement in Illinois if you already have a contractor license in another state. If not, you’ll need to apply for a license from scratch:

  • Provide a description of the work and services you aim to perform
  • Specify the classification of license for which you are applying for
  • Clarify your business structure and provide additional company information
  • Identify and verify by affidavit that the applicant or member of your business entity is financially stable
  • Submit your certificate of insurance with the City of Chicago as additionally insured and policy limits ranging from $1 million to $5 million depending on the sizes of your projects
  • Sign and complete the application

You must also pay all licensing fees, which vary according to license class: 

  • Class A – $2, fee for an unlimited contract amount
  • Class B – $1, fee for projects up to $10,,
  • Class C – $ fee for projects up to $5,,
  • Class D – $ fee for projects up to $2,, 
  • Class E – $ fee for projects up to $,

Once you have your license, you need to renew it every year.

Learn more about general contractor license and insurance requirements in Illinois.

Indiana

General contractors don’t need a state license to work in Indiana. Make sure to check the licensing requirements with local governments before you begin work.

Iowa

There are no state licensing requirements for general contractors in Iowa. However, any construction contractor (individual or business) who earns at least $2, a year doing construction work, must register with the Iowa Division of Labor.

Kansas

General contractors don’t need to hold a state license to work in Kansas. However, there are local licensing requirements so make sure to check these before you begin work.

Kentucky

You don't need a state general contractor license to work in Kentucky. All licensing is done at the local city/county level so make sure to check this before you begin work.

Louisiana

General contractors must have a state license to work in Louisiana. There are five types of licenses you should consider, all of which are awarded by the Louisiana Licensing Board for Contractors:

Residential contractor license - Covers construction and home improvement projects worth more than $75, You’ll need to pass an exam to show a financial statement and proof of general liability and workers' compensation insurance.

Commercial contractor license - Covers commercial projects worth more than $50, You’ll need to submit a financial statement and must pass the trade exam, as well as the business and law exam.

Residential specialty licenses: These are a requirement for residential subcontractors undertaking projects in a specialized area, such as swimming pools, roofing or masonry that are valued over $7,

Mold Remediation License: You’ll need this license for any mold remediation project.

Home Improvement Registration: If you plan to do any home repair or improvement projects valued between $7, to $75,, and you don’t have a residential or commercial license, you’ll need this license. 

After you figure out which type of license you want, you need to apply for the license itself:

  • Fill out your application
  • Prepare your notarized financial statements
  • Pick a legal representative
  • Pass the exam
  • Get insurance (you must have proof of general liability insurance coverage and a certificate of insurance for active workers’ compensation insurance)
  • Pay relevant fees
  • Get approval from the Louisiana State Licensing Board for General Contractors

Once you’ve completed all these steps, submit your application for board approval.

Learn more about Louisiana general contractor license and insurance requirements.

Maine

As a general contractor, you don’t need a state license to work in Maine. However, if you undertake any home improvement or home construction jobs worth more than $3, you must provide a written contract. There may be local licensing requirements so make sure to check these before you begin work.

Maryland

As a general contractor, you may or may not need a state license, depending on the work you do. For new home construction, you don’t need a state license, but you do need to register with the Home Builder Registration Unit of the Office of the Attorney General. If you plan to do work on existing residential property, you will need to get your Maryland Home Improvement Contractor’s License (MHIC) from the Maryland Department of Labor, Licensing and Regulation. 

If you undertake any home improvement projects, you will need a license which is issued by the Maryland Home Improvement Commission. In this case, you’ll need to show proof of two years of work experience in home improvement or construction or related education. You’ll also need to show proof of financial solvency and proof of insurance (at least $50, of contractors liability insurance). You must pass a business and law exam.

MHIC licenses cost $ the first time you apply and the licensing exam costs $ License renewals cost $ and are required every two years. General contractors are also required to contribute $ with each renewal fee to a guaranty fund to help Maryland homeowners recoup losses if a licensed contractor fails to complete a project. 

Commercial contractors must register at the city/county level. You’ll apply for a construction license with the Clerk of the Circuit Court in your county if you plan to work on new construction projects, excavating or curbing and paving streets or sidewalks.

The Marine Contractors Licensing Board handles licensing for general contractors that work projects involving waterfront structures, such as boathouses, piers, ramps and wetland observation decks.

Learn more about Maryland general contractor license and insurance requirements.

Massachusetts

As a general residential contractor in Massachusetts, you must be registered and licensed. You must hold a Home Improvement Contractor registration to perform ordinary repairs to an existing property. To work on larger projects on existing properties, you must also hold a Construction Supervisor License from the Office of Public Safety and Inspections. You can apply for an unrestricted license, a one- and two-family dwellings license or a specialty license. You must show three years of experience in building construction or design, and you must pass an exam. Contractors who build new homes or work on commercial buildings only are exempt.

Michigan

As a general contractor you’ll need a Residential Builders license or a Maintenance & Alterations Contractors license to construct, repair, alter, add to, subtract from or improve a residential structure or a combined residential and commercial structure. You’ll need to complete a hour pre-licensure course and you must pass a test. The general contractor license is awarded by the Department of Licensing and Regulatory Affairs (LARA). Commercial construction contractors must contact their local county building offices for permits or licenses.

Minnesota

A general commercial contractor does not need a state license to work in Minnesota. However, a residential building contractor or remodeler does need a license. The Residential Building Contractor license is awarded by the Department of Labor and Industry. You’ll need to show proof of liability and worker’s compensation insurance. You must pass a trade exam, as well as a business and law exam.

Mississippi

General commercial and residential contractors must hold a state license to work in Mississippi on projects worth more than $50, The licenses are awarded by the Mississippi State Board of Contractors. You’ll need to pass a trade exam, as well as a business and law exam. You must show proof of general liability insurance.

Missouri

There is no state licensing requirement for general contractors in Missouri, but there may be general contractor license requirements on a local level that you need to check before you begin work.

Montana

There are no licensing requirements for general contractors in Montana. However, a construction contractor who has employees must register with the Department of Labor and Industry.

Nebraska

A general contractor doesn’t need a state license to work in Nebraska. However, if you do any work that is considered construction, alterations, renovations, additions, installations or repairs, you’ll need to register with the Department of Labor.

Nevada

General contractors, defined as “businesses or individuals who construct or alter any building, highway, road, parking facility, railroad, excavation or other structure in Nevada,” must hold a state license. The license is awarded by the Nevada State Contractors Board. You must show proof of worker’s compensation insurance and proof of a bond. You are required to show proof of four years experience at a journeyman level or as a foreman, supervising employee or contractor. You’ll need to pass a trade exam, as well as a business and law exam.

New Hampshire

General contractors do not need a state license to work in New Hampshire. However, make sure to check local licensing requirements before you begin work.

New Jersey

There are no state licensing requirements for general contractors in New Jersey; however you will need to register for a home building license with the New Jersey Department of Community Affairs or for a home improvement license with the New Jersey Division of Consumer Affairs. Commercial construction contractors are licensed at the city or county level.

If you have an incorporated business you might need to include your trade name certificate, certificate of incorporation, certificate of formation or registration of alternate name with your application. And if you created your business in another state, you’ll also need to show a certificate of authority proving you’re allowed to work in New Jersey. 

You’ll receive a registration number when your application is approved, which you must include in all ads, contracts, business documents, messaging to customers, and on your business vehicles. 

It’s important to renew your license every year before March If you’re found working without a general contractor license in NJ, you could be fined $10, the first time and $20, for each additional offense. 

Learn more about New Jersey general contractor license and insurance requirements.

New Mexico

General contractors must be licensed by the state to work in New Mexico. There are multiple classifications of contractors licenses issued by the New Mexico Department of Regulation and Licensing. These include GB-2 Residential and GB General Building. You’ll need to show proof of four years of experience. You can substitute up to two years of education for experience. You must pass a trade exam, as well as a business and law exam.

New York

A general contractor is not required to hold a state license in New York; however, local governments within the state do have licensing requirements and you need to check these before you begin work.

North Carolina

General contractors must have a state license to work in North Carolina if the projects they work on are worth more than $30, The general contractor license is awarded by the North Carolina Licensing Board for General Contractors.

There are multiple classifications of licenses, and you can be licensed in more than one classification if you meet the qualifications. These include building contractor, residential contractor, highway contractor, public utilities contractor, and special contractor.

In order to become a general contractor in NC, you must:

  • Be at least 18
  • Answer questions about your background
  • Be legally registered to conduct business
  • Pass the National Accredited Building Examination given by the National Association of State Contractors Licensing Agencies (NASCLA)
  • Have the finances available to back up projects of $30, or more

After you apply online, the licensing board will send you instructions on how to sign up for the right exams. The board will review your exam and send you your license once you’re approved. 

The licensing is complete after a clean background check and the entire process typically takes around 30 days.

Learn more about North Carolina general contractor license requirements.

North Dakota

All contractors in North Dakota require a state license to work on projects worth more than $4, A contractor is considered any person who constructs, repairs, alters, dismantles or demolishes “bridges, highways, roads, streets, buildings, airports, dams, pipelines, and every other structure, project, development or improvement” of property. You must apply for Class A, B, C or D according to the scope of the work you plan to do. You must show proof of insurance before you’ll be granted a license from the Secretary of State.

Ohio

A general contractor does not need a state license to work in Ohio for small projects that cost less than $1, Licenses are only required for electrical, plumbing, HVAC, hydronics and refrigeration, for which you’ll need to get a statewide license issued by the Ohio Construction Industry Licensing Board (OCILB).

To apply for a statewide contractor license in Ohio, you’ll need to: 

  • Be 18 or over
  • Be a U.S. citizen or legal alien with proof of residence
  • Have worked as a tradesperson for at least five years, be a registered engineer or have equivalent experience 
  • Not have been convicted of a crime 
  • Pass the exam
  • Prove you have at least $, in contractor liability insurance
  • Pay a $25 application fee

You can apply for a general license at the local level if you aren’t going to be specializing in any trades (HVAC, electrical, plumbing, hydronics or refrigeration). Be careful to note that different parts of Ohio have different rules for how to get a general contractor license so it’s important to know both the state and the city requirements before you apply. 

Learn more about Ohio general contractor license requirements.

Oklahoma

General contractors do not need a state license to work in Oklahoma. There may be licensing requirements at the local level so be sure to check these before you begin work.

Oregon

A general contractor must hold a state license to work in Oregon. A contractor is considered any person who is paid to do any construction work that involves an improvement to real property. You can apply for a residential contractor license, a commercial license or a dual residential and commercial license. The license is awarded by the Oregon Construction Contractors Board. You must complete pre-license training and take a test. You’ll also need to show proof of liability and worker’s compensation insurance.

The rules for obtaining a license in Oregon are more strict than in some other states. Before you can submit an application you need to register your business with the state and figure out what kinds of buildings you plan to work on (residential, commercial or both) as well as the type of work you’re going to do. 

You’ll then need to complete and pass a hour training course if you haven’t already passed the NASCLA commercial exam. You can take this course online ($$), in person ($$) or in a self-study format ($$). It costs $60 to take the exam.

You need to have a surety bond in the amount required for the type of license you want, general liability insurance and workers’ compensation insurance, as well as Oregon Business and Federal Employer identification numbers.

If you’re 18 or over you can then submit your application to the Construction Contractors Board (CCB), along with your supporting documents and a $ fee. If you’re approved, your license is valid for two years. The CCB license number assigned to your business must appear on all your advertising. And you must complete continuing education every two years to renew your license.

Learn more about Oregon general contractor license requirements.

Pennsylvania

General contractors and commercial contractors do not need a state license to work in Pennsylvania. However, if you do more than $5, worth of work on home improvement projects per year, you’ll need to register with the Attorney General’s Office.

Rhode Island

There is no licensing requirement for general contractors in Rhode Island; however, there is a comprehensive registration process. All contractors and subcontractors who are involved in commercial construction, home construction, alterations, remodeling or repairs to property, must register with the Contractors’ Registration and Licensing Board. You must complete five hours of pre-license education and must show proof of liability insurance.

South Carolina

General contractors will require a General and Mechanical Contractors License to work in South Carolina on any commercial construction jobs worth over $5, The general contractor license is awarded by the South Carolina Department of Labor, Licensing and Regulation. You’ll need to show proof of two years of experience in the past five year and pass a trade exam, as well as a business and law exam.

South Dakota

General contractors are not licensed at the state level in South Dakota. Before you begin work, check with local and county governments as there may be local licensing requirements.

Tennessee

General contractors must hold a contractors license before they can bid on or negotiate prices for any projects that are worth $25, or more. This applies to any person who oversees or performs any construction, repair or installation for buildings, land, highways, public utilities, and more.

You’ll need to show proof of experience, proof of insurance, and a financial statement. You’ll also need to pass a trade exam, as well as a business and law exam. General contractors are licensed by the TN Department of Licensing and Insurance, Board for Licensing Contractors.

Learn more about general contractor license and insurance requirements in Tennessee

Texas

Texas does not require a general contractor license at the state level. However, there are local licensing requirements in some cities, so make sure to check with your city or county before you start any work.

It’s also a requirement for every business to have a Texas Business License.

Before you apply to work as a general contractor in Texas, you first need to figure out which category you’ll be working under and what you need to do to obtain that specific license. If you’re planning to work as an electrician, plumber or HVAC technician, you should familiarize yourself with the requirements for each of those trades:

Although it’s not mandatory to have a general contractor state license, you may need to get one from your local municipality. The rules can vary a lot by city or district so it’s a good idea to research your local area to figure out exactly what’s needed. 

Learn more about Texas general contractor license and insurance requirements.

Utah

A general contractor requires a state license to do any work in Utah that is worth more than $3, The B General Building Contractor License is awarded by the Utah Division of Occupational and Professional Licensing. To qualify, you must show proof of general liability and worker’s compensation insurance, as well as proof of financial responsibility. You need to show two years of experience in the past ten years. You’ll need to pass a trade exam and a business and law exam.

Vermont

General contractors do not need a state license to work in Vermont; however there may be local requirements, so you'll want to make sure to check these before you begin work.

Virginia

General contractors must have a state license, issued by the Department of Professional and Occupational Regulation, in order to work in Virginia.

You need to choose the license classification you want to be licensed for, most specifically Commercial Building Contractor or Residential Building Contractor. There are three license classes (A, B or C), depending on the scope of the work you plan to do:

  • Class A licenses: for individual projects worth up to $10, with a maximum of $, per year. You must have two years of experience.
  • Class B licenses: for individual projects of up to $, with a maximum of $, per year. You must have three years of experience.
  • Class C licenses: unlimited. You must have five years of experience.

For all classes of licenses, you must complete a pre-license education course approved by the Board of Contractors and then pass an exam.

Learn more about Virginia contractor license requirements.

Washington

As a general contractor in Washington, there is no state licensing requirement, but you’ll need to register with the Washington State Department of Labor & Industries. This will allow you to “supervise numerous building trades or crafts.”

You’ll need to show proof of a $12, surety bond and proof of general liability insurance. You also must pass an exam.

Learn more about general contractor requirements in Washington.

West Virginia

General contractors who do any work on projects worth more than $2, require a general contractor license to work in West Virginia. The license is issued by the West Virginia Division of Labor. There are multiple classifications of licenses, including general building and general engineering. You’ll need to pass a trade exam, as well as a business and law exam. You must also show proof of worker’s compensation insurance, and you may require a wage bond.

Wisconsin

A general contractor must hold a Dwelling Contractor Qualifier license to work in Wisconsin on any construction projects worth more than $1, This includes construction, alterations, and improvements on residential, commercial, and public works projects. You must complete a hour education course approved by the board and pass a test, and you must show proof of insurance. To obtain building permits, your business must hold a Dwelling Contractor license.

Wyoming

General contractors do not need to hold a state license to work in Wyoming. Licensing is done at the local level so check with your city or county before you begin work.

Contractor license info by state

Learn more about contractor license requirements in the following states:

This information has been provided as a service. It is correct and up-to-date to the best of our knowledge; however, it is in no way intended to offer legal advice and you must always consult with local authorities before you make any business decisions. Regulations and requirements may change at any time.

Matt Crawford image

By Matt Crawford

Matt Crawford is Associate Content Director at Next Insurance and a small business insurance specialist.

Sours: https://www.nextinsurance.com/blog/general-contractor-license-requirements/

Similar news:

Mike is a journeyman carpenter and I recommend him to my real estate investing colleagues every now and then when they need a hand rehabbing an investment house. He’s a hard worker and ambitious. I like that. The other day he tentatively asked me a few questions about my own career in real estate investing. It seemed he had more on his mind than just casual curiosity and one of his questions got more complicated than he anticipated.

He was wondering: Do I need a contractors license to flip houses? Mike has the skills to renovate houses and he wanted to use those skills to up the ante on his income potential. He planned to find fixer-upper homes for sale, rehab them himself, then sell at a profit. I believe Mike has a pretty good plan but, unfortunately, there’s no one-size-fits-all answer to his question.

Do I Need a Contractors License to Flip Houses?

Do I Need a Contractors License to Flip Houses?

Mike’s question is complicated because the laws on whether you need a contractors license to flip houses differ widely from place to place. Some states require a contractors license for any contracting work, while others currently don’t require one at all. The answer may also depend on your annual volume of your work or on how contracting is defined. Is it contracting, for instance when you are working on your own investment house? Is it your house if it belongs to your LLC? Only your local authorities can say. You may be required to obtain a contractors license from the state, county and sometimes even city—or, all three. To give you an idea of the scope of variation nationwide, we can look at a few examples of the current rules for licensing contractors:

  • Several states, such as Alaska, Michigan, Nevada, New Mexico, and Utah, require licensing for any contracting work.
  • Texas and Maine have no licensing for general or residential contractors.
  • Delaware only requires licenses for jobs worth over $50,, while South Carolina requires them for jobs worth $ or more.
  • Pennsylvania issues a home improvement contractors license and individual cities issue an array of other licenses, including for general contracting. There are complex webs of reciprocal recognition among the cities. Indiana, Kansas, Kentucky, New York, Ohio, South Dakota, Vermont have similar systems.

It’s important to dig deep to find out what your local requirements are. You could find yourself in a serious bind when rehabbing houses to sell without a contractors license if you are required to have one. Working without the required licensing or permits could have severe legal consequences, such as fines or even jail time. You may even find that rehabbing a house without those permits undermines your ability to sell it. In many states, you will have to disclose any unpermitted work, which will more than likely send potential buyers packing. They simply won’t want to bear the consequences of inspectors coming down on them, being unable to insure that portion of the house, or deal with the mortgage company’s rules. For you, what’s the use of buying an investment property if you can’t sell it?

After doing some research on your local laws, if you discover that you are not required to have a contractor&#;s license to flip houses, there may still be good reasons to get one anyway. For instance, you may be able to save money by hiring workers directly instead of hiring a contractor and their team. In addition, since local authorities may require a permit for some activities—roofing, for example—and only give a permit to licensed contractors. If you are licensed, you can skip the middleman and pull the permit yourself. And, you can maintain greater control over the project, so you know the work gets done right. Having a contractors license may also increase the homebuyers’ confidence in you as a professional real estate investor.

But, you have to weigh the benefits against the less appealing aspects of being a licensed contractor. It can take a lot of time, for instance, to become a contractor. Training may include a college-level course that covers topics like building codes, carpentry, excavating and grading, using concrete, and similar technical aspects of a contractor’s work. You will learn about these topics whether or not you ever intend to do that kind of contracting work, however. The biggest hurdle, however, is that some locales also expect you to have a few years’ experience working in the construction field. If you do pass the requirements and exams for becoming a licensed contractor, you’ll need to consider the risk and money involved in playing the role of contractor on your own house flipping projects. Contractors have an increased liability for injuries that take place on the job so you’ll also need to carry a hefty insurance policy.

If you are not currently required to have a contractors license to flip houses in your locale or you decide against getting one, always be sure to hire the right people for your rehab team. If you hire an unlicensed contractor in a situation where they should be licensed, you may not be able to get permits for the work, cannot be certain of the quality of the work done, and you have no recourse to a higher authority if there is a dispute. These are significant risks that could damage your business reputation—and your bottom line. No one wants to see that happen.

Get Support to Make the Best House Flipping Decisions

I was glad Mike approached me with his question. Whether or not to get a contractor’s license to flip houses is just one of many important decisions that he—and you—will make developing a professional real estate investing business. Keep in mind that a strong network of support is a tremendous asset. In fact, that’s one of the things I value most about being an independently owned and operated HomeVestors® franchisee—the atmosphere of support. I felt it from the very beginning, with the week of intensive initial training. Since then, I’ve had a dedicated Development Agent who gives me invaluable advice, even if I don’t have to lean on him so much anymore. Nowadays, I share what I know with my local and regional colleagues all the time.

Build your professional real estate investing business from the ground up, whether or not you need a contractor’s license, by calling HomeVestors today.

 

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