Does My General Contractor Need a License? Maybe Not.

Q: After talking to a few different general contractors in the area during the planning stages for our kitchen remodel, I noticed that some have a CSLB license, while others do not. We really liked one of the contractors we interviewed, but he doesn’t have a general contractor license. What are the licensing requirements for general contractors? Should we choose a different contractor who is licensed?

A: Choosing a general contractor for such a large remodeling project is definitely a big decision. When you factor in the additional challenge of deciding whether a CSLB (Contractors State License Board) license is necessary for your contractor, it can make the task even more arduous.

Contractor license requirements can vary by state, and each state may have a different name for the license required. In California, it’s called a CSLB. Your state or municipality also can dictate whether a licensed professional is necessary for the project.

Before making a final decision about which general contractor you’d like to oversee a remodeling or building project, it is important to review the state and local licensing laws. To find a local license agency, the National Association of State Contractors Licensing Agencies (NASCLA) lists contractor licensing agencies by state.

A general contractor is responsible primarily for supervision of the entire construction project.

A general contractor acts as a manager for a construction or remodeling project. Their job involves overseeing the project and coordinating materials and schedules with different subcontractors. General contractors also need to communicate with all of the involved parties, including the homeowners, to keep a project moving along and manage any problems or setbacks that may arise.

General contractors can work with homeowners to bring their vision to reality. They are often involved in the early planning stages of a project, and can help with budgeting and logistics as well.

Permit requirements can vary by location. Hiring an experienced general contractor who has worked in your area can also ensure that the proper permits are pulled and that large jobs are up to local codes.

Licensing protects contractors and customers. 

Choosing a licensed general contractor is an important way to safeguard your property and your project. While each state varies, most individuals with a contractor’s license are required to have at least a few years of experience in the industry as a skilled subcontractor.

Many license requirements also involve tests in which the contractor must demonstrate a deep knowledge of different construction trades. Liability insurance, lien rights, and proof of a business address are also part of the requirements for a general contractor’s license in some states.

Performing a license check, like a CSLB license check for contractors working in California, can help you feel more confident that the person you are hiring is knowledgeable and experienced to properly oversee your project. An insured contractor can protect you against liability should someone get injured while working on your building or remodeling project.

Related: 10 Building Code Violations Your Home May Be Guilty Of

General contractor licensing requirements vary by state and project cost. 

The specific requirements for how to become a contractor and receive a license can vary greatly in different areas of the country. Even within the same state, different counties or cities may set their own licensing requirements. Reading the requirements for obtaining a general contractor license for your area can help you learn more about the exact experience, testing, and liability insurance that are needed.

For example, in the state of California, any individuals hired for construction and remodeling projects with a combined labor and material value of over $500 must have a CSLB license. To become a licensed general contractor in the state of California, individuals must provide proof of four years of professional experience, hold general liability and surety bond insurance, and pass various trade, law, and business tests.

Related: Setback Requirements: 7 Things All Homeowners Should Know

Licensed general contractors often have a marketing advantage over non-licensed contractors.

While an unlicensed contractor may try to entice their customers by underbidding a project, choosing to hire a contractor with a CSLB license provides homeowners with added security that their job will be performed correctly. Since most states require that general contractors pass exams to demonstrate their knowledge of construction and local laws, these individuals are more likely to get a job done correctly and avoid problems that could come with a lack of experience and knowledge.

Additionally, the insurance requirements included in many state licensing laws are crucial for protecting homeowners against liability for injury or damage to their property. Working with an uninsured contractor is a huge risk. If someone working on your property becomes injured or causes damage to your property, you could be out a lot of money.

Registration and certifications may be required for general contractors, depending on state requirements and the type of work.

Depending on where you live and the scope of your project, there may also be certification or registration requirements for general contractors. While these three terms (license, certification, registration) may seem similar, and may often be used interchangeably, they are actually quite different.

Whereas the process for obtaining a license can be quite complex, as we outlined above, registration is much more basic. It involves completing the necessary paperwork and paying a nominal fee with the state or county required to open any business. Registered businesses aren’t necessarily experienced; they simply followed the local guidelines for opening a company.

Certification isn’t typically required for most project types. States may require special certifications for projects that have greater safety or health implications, such as mold removal. You may also find some general contractors that are certified by certain manufacturers as an experienced installer of their products, such as roofing materials and windows.

Related: Being Your Own General Contractor