If you work as a general contractor or for a general contractor, the odds are high that you — or someone else in your company — is going to need to work with your state’s licensing agency to continually keep a contractor license active.
The trick is that the requirements vary pretty significantly from state to state. Whether your state calls you a general contractor, a building contractor, a dwelling contractor, a construction contractor, a home builder, or something else entirely, it’s important to get yourself informed about what’s required. The odds are high that your state is going to require you to do certain tasks on a regular basis to keep yourself or your business properly licensed.
Penalties for missed renewals
If you miss the mark and fail to complete your renewal by your state’s deadline, you could face a bunch of different issues. For starters, it will generally be illegal for you to continue working while your license is lapsed. But you might also face anything from late fees to serious fines. All told, not renewing your license on time is generally an expensive headache.
To help you avoid that hassle and cost, let’s go through some of the general to-dos contractors need to handle to maintain their licensing with their state.
Remember, these will give you a ballpark idea of the renewal process. But your state will have specific requirements that you need to meet, so make sure you look into your obligations based on where you live.
Clarify your license type
First up, you need to be sure that you understand how contractor licensing works in your state. Some states issue the license directly to the contractor, while others license the contracting company.
In the second case, you’ll still have some renewal tasks to handle as an individual. Most states that license companies require the company to name certain responsible individuals. This person might be called a qualifying party, a qualifying representative, or go by another title.
That individual then needs to do certain things in order to keep the company properly licensed. They may need to sign the renewal application each time it’s due and take a specific number of continuing education (CE) hours during each renewal cycle, for example.
If your state issues licenses to companies, not individuals, you will still generally need to complete the to-dos we’re about to outline. But you’ll do them on behalf of your company.
To add another layer of complexity to this issue, some states require certain endorsements or specialties for specific types of contracting work. In Alaska, for example, to work on homes, you’ll need both a general contractor license and a residential contractor endorsement.
Long story short, requirements vary from state to state. Take the time to get clear on what applies to you based on where you live.
Figure out when renewal is due
Next up, it’s important that you understand exactly when your contractor license renewal is due. Generally speaking, you’ll need to submit some renewal documents every one to three years. Your renewal deadline might coincide with the license’s original issue date, or it might be a set date for all contractors in your state (e.g., November 30 each year).
Once you find your date, mark your calendar for about a month before. This gives you plenty of time to tackle the renewal to-dos before your deadline.
Meet ongoing requirements
Most states have specific requirements with which contractors — whether that’s individuals or companies — need to comply. The two most common ongoing requirements are:
- Posting your license. You may be required to have your license number visible on all of your company vehicles and all of your advertisements, for example.
- Maintaining insurance and bonding. Generally, you’ll need a specific amount of liability insurance and/or a bond. This ensures that if something goes awry with one of your projects, you’ll have access to sufficient funds to correct the problem.
Complete the required continuing education
Whether you’re a licensed individual or the qualifying/responsible party for a licensed contracting company, you’ll probably need to complete a specific number of continuing education (CE) hours during each renewal cycle.
Some states require you to take some or all of your hours in person, but more and more states allow you to take your contractor CE online. That way, you can chip away at your hours whenever you have time from any location where you have an internet-connected device.
The trick is to make sure your CE hours come from an education provider that your state has approved. Look for an approval letter or a course ID number that you can check with your state so you don’t take hours that won’t count.
In some cases, the hours you need will decrease or go away over time. You might age out of the continuing education requirement or have the number of hours you need diminished after a certain number of years of holding your license.
To get your contractor license continuing education, find your state below and click the link to start your CEs online.
Once you’ve met the requirements for renewal, which generally comes down to continually maintaining insurance/bonding and getting the specified number of CE hours, the main thing on your list is getting your renewal documents into the state on time.
Generally, that means submitting your state’s contractor renewal application. This might be a paper form that your state mails to you so you can fill it out and send it back. States that use this protocol generally mail renewal applications out about a month or two before your renewal is due, so make sure your state has the proper address on file for you.
Other states have an online portal that you can use to renew your contractor license. To make sure this isn’t a headache as your renewal deadline approaches, you might want to get your logins set up now.
Whether you renew with a hard-copy form or online, you’ll probably need to submit a renewal fee along with it. Confirm that you know the right fee because a missed or insufficient payment is a surefire way to run into problems maintaining your license.
Renewing a contractor’s license doesn’t have to be a major challenge. Take the time to research your state’s requirements and find an online CE provider now so the process will be as easy as possible when your deadline nears.