Requirements For a Home Improvement License
Home improvement contractors must be licensed to perform construction, replacement, repair and remodeling work. Such work includes, but is not limited to, basements, garages, driveways, swimming pools, terraces and landscaping.
Getting licensed is a process that requires insurance, a bond and a workers’ compensation waiver as well as some fees. The Putnam County licensing checklist and model contract help get you started.
Requirements
The requirements for a home improvement license vary from state to state. For instance, some states like California require almost all specialty contractors and subcontractors to obtain a state license while others set project value thresholds to determine whether professionals need one. In some cases, professionals must also provide proof of insurance or demonstrate financial solvency based on the scope and size of their business, assets, liabilities, credit report and net worth to qualify for a license.
In New York, the NYC Department of Consumer Affairs requires all professional home improvement contractors to have a city license and pass a written examination. Additionally, applicants must disclose any connection to financing a contract, as well as any outstanding liens or judgments. Additionally, Suffolk County and Nassau require master electricians and plumbers to obtain a state license. Unlike the other areas, Putnam County doesn’t require a state licensing exam but instead requires all electrical and plumbing contractors to register with the county office and supply a contractor bond in the amount of $25,000 with the County of Putnam listed as the Obligee.
Fees
Home improvement contractors must pay a fee when they file their application. They also pay fees when they renew their licenses. In Suffolk, Nassau, Putnam, Rockland and Westchester counties as well as in NYC, the application and renewal fees must be paid by the natural person who owns or controls the business.
Work requiring licensing includes any construction, remodeling or repair of buildings, bridges, roads, sewer lines, excavation, demolition and any other work of substantial nature. It also includes erecting scaffolding, connecting or disconnecting utility service lines and installing air conditioning and heating equipment.
Anyone who performs this kind of work without a proper license can be fined. Those who hire unlicensed workers can also face legal action. A contractor must get his or her fingerprints documented and pass a background check before the licensing process can start. Applicants who fail the exam must pay a re-examination fee when they apply for a new license.
Exams
Home improvement contractors must pass an exam in order to work legally. These exams are designed to evaluate the knowledge and business acumen of contractor applicants. Typically, these exams have two sections: one that covers trade knowledge and the other that covers best practices and business law.
The New York City Department of Consumer and Worker Protection administers the home improvement contractor exam, which costs $50. Only one person must take the exam if that individual is a sole proprietor, general partner, corporate officer, principal, director or shareholder owning 10% or more of company stock.
If you want to work in multiple states, we suggest registering for the NASCLA exam, which is accepted by 16+ states. This exam covers all of the essential aspects of commercial building construction, including home improvement. You can schedule your exam here. The exam can be taken online or in-person, and it usually takes about an hour to complete. The exam consists of 25 questions that are true/false and multiple choice.
Renewals
Many states require that home improvement contractors have a license to work on projects valued at more than $500. Home improvement professionals need to submit an application and pay an exam fee, usually before starting any work. In Kentucky, for example, home improvement professionals must submit financial statements demonstrating net worth and take a business law course.
Home improvement laws typically prohibit contractors from making substantial misrepresentations or false promises. County laws may also limit contractor activities, including the number of jobs a professional can perform and how much money a contractor can charge for services.
In New York City, for example, a home improvement contractor must have a license and display it on their vehicle. A professional who operates without a license faces fines and other legal penalties. In addition, a contractor whose license expires cannot continue to work on projects. To avoid these consequences, it is vital to ensure a home improvement contractor’s license remains active and up to date.