In the state of North Carolina you are allowed to conduct construction projects of up to $30,000 without a general contractor’s license. Unless you are building houses or doing major renovations, this gives you quite a bit of leeway with regard to the size of projects you can take on. Even if you don’t plan on building houses or doing large renovations, there are several advantages to earning your General Contractor’s license. Read on for tips and information on navigating this process and gain the benefits of becoming a licensed contractor in the state of North Carolina.
The lowest level of General Contractor’s license in North Carolina (Limited) allows you to build dwellings up to a value of $500,000. The intermediate level allows projects up to $1 million dollars in value and the unlimited license has no dollar limit on projects. For 90% of builders, the limited classification is all you will ever need.
Advantages of a general contractor’s license
A general contractor’s license is a requirement for those building houses and performing large remodeling projects, but there are also advantages to holding a license if you are in the carpentry trade, run a handyman business, or have ideas about starting a home inspection business.
If you are a carpenter seeking work with a building company, holding a contractor’s license indicates that you possess a certain level of knowledge, not only of carpentry but of the overall construction business. Employers may see this as a value-added benefit. This could open up the possibility of advancement to a project management position, a project estimator job, or even a sales position for a large company.
Handyman businesses often perform work for real estate agents seeking to have home inspection punch list work done for their clients. Many home inspection reports specify that the work be performed by a qualified or licensed professional. In practice, a license is not typically required for performing general repairs in North Carolina but (excluding electrical and certain plumbing repairs) it can only help your credibility as a businessperson in the trade.
For those seeking to enter the home inspection business, gaining your contractor’s license is a short cut to becoming eligible to take the home inspection exam. Without a contractor’s license, you are required to have an engineering degree or to have performed 100 home inspections as an associate inspector for a licensed home inspection company.
The process for applying to take the exam
In North Carolina, you must apply to take the exam with the North Carolina General Contracting Board. You can visit their website and request an application packet which will be sent to you in the mail.
Application
Be careful in completing the application. If you miss something or make mistakes, your packet will be returned to you with highlighted areas for correction. If you have a business that is set up as sole proprietorship you will apply in your own name. If your business is a LLC, partnership or other corporation, be sure to apply for the license in the name of the business, i.e., Great Homebuilders LLC.
Letters of recommendation
Part of the paperwork you must submit includes three letters of reference attesting to your good character, competency, and integrity. The letters can be no older than 12 months and must be written either on a company letterhead or be notarized. Friends and former employers are usually happy to help you with this, and you can make it easy for them by typing up the letters yourself. You don’t have to lay it on too thick here. The letters are likely to be read only by a clerk and they are not looking for a life history. Three or four sentences is sufficient stating that you are capable, honest, dependable etc. Do not send photocopies of the letters; send the originals and do not staple them.
Balance Sheet
Probably the most frustrating part of the process is the balance sheet. Instructions have improved, but it may still be confusing. The purpose of the balance sheet is to show your “working capital”. For a limited license, you must have $17,000 in working capital. Working capital is defined as “Current assets minus current liabilities”. Be sure to complete each entry on the worksheet even if the amount is zero.
Mail it in
Do not fold your letters of reference or any of the other paperwork you submit. Obtain a document-sized envelope and mail the contents to the address provided on the application. Don’t forget to include a check for $75 for the application fee. If you’ve been careful in completing the application, you should receive a letter of eligibility within a few weeks. If you made errors or omissions, your application packet will be returned to with any errors or omissions highlighted. Don’t be discouraged, just make the changes or provide the information and re-submit the application.
Letter of eligibility
Once you receive your letter of eligibility you can schedule your test at the nearest testing center. The application packet provides information about the testing center (www.psiexams.com) where you can schedule your test. There are specific rules about what you can and cannot bring with you to the test so read the information at the testing center website carefully.
You must pass the test with at least 70% correct answers. If not, you are given the opportunity to re-test after a 30-day period. Each time you test however, you have to pay the testing fee, currently $60. If you fail the test a second time you are not eligible to take the test again until you have submitted a new application to the licensing board. This is a big incentive to at least get it right the second time!
Clayton Couch - Clay worked as a technical writer and technical support engineer in the telecommunications industry before starting Minor Details, LLC, a ...
Join the Conversation