Operating a handyman business in Minnesota requires following certain licensing and insurance rules. While the state does not have specific “handyman licenses,” most home repair, remodeling, and construction work does need a state-issued contractor’s license. This extensive guide will explain all the steps for handymen to legally provide services in Minnesota.

Introduction to Licensed Handymen and Handyman Businesses in Minnesota

In many states, the term “handyman” refers to small jobs and repairs that don’t require an official contractor’s license. However, Minnesota laws are more stringent for anyone doing paid work on residential real estate. Handymen are considered “residential building contractors” under Minnesota Statute 326B.

The state issues two types of residential building contractor licenses that handyman businesses need:

  • Residential Building Contractor – Allows new construction, remodeling, and roofing/re-roofing of homes, townhouses, duplexes, triplexes, and fourplexes. Detached garages also permitted.
  • Residential Remodeler – For remodeling and roofing/re-roofing only. No new builds.

Any project that requires a building permit, involves multiple trades, or costs over $15,000 in a year requires a state license.

Examples of common handyman jobs like drywall repair, tile installation, deck building, door and window replacement, siding repairs, and interior painting all need a license if you earn more than $15,000 annually. The state does make an exception for anyone working in a single specialty trade such as only drywall finishing.

Just focusing on one skill may exempt you from licensing but restricts the work you can advertise and perform legally. Many handymen obtain a residential remodeler license to offer a wider range of services.

Some key points about Minnesota’s handyman contractor licensing rules:

  • Handymen are exempt if making under $15,000/year in a single trade
  • No distinction between “major” or “minor” repairs – all handyman work over the limit requires a license
  • Property owners never need a license for working on their own residence
  • Licensing is regulated statewide but some cities have additional registration rules

Understanding all the requirements for obtaining a handyman license ensures you can operate your business legally in Minnesota.

Requirements for Becoming a Licensed Handyman in Minnesota

To qualify for a handyman license in Minnesota, you must:

  • Pass the Residential Contractor and Remodeler License Exam
  • Provide proof of public liability insurance
  • Show compliance with workers’ compensation laws
  • Complete a background check
  • File as a business with the MN Secretary of State
  • Pay licensing fees

The following sections provide more details on each step of the process.

Passing the Minnesota Handyman License Exam

The first step is to pass the two-part Residential Contractor and Remodeler Exam administered by Pearson VUE. This consists of:

  • 50 question business section
  • 100 question trade section

You must score at least 70% on each portion to pass. Failing one section means retaking the entire exam.

The business section covers topics like estimating, contracting, consumer protection laws, labor regulations, taxes, business organizations, risk management, and accounting.

The trade section tests your knowledge of building codes, construction methods, materials, OSHA safety, lien laws, and other industry topics.

You can purchase a study guide to prepare for the exams. Handymen new to the trades may need several weeks to absorb the material.

Registering for the exam dates occurs through the Pearson VUE website. Creating an account and signing up for a time slot takes about 15 minutes.

The exam fee is $72 total paid during registration. You can take the tests at various locations around Minnesota. Schedule a date after feeling confident with your studying.

Once you pass both sections, you’ll receive a certificate with a Qualifying Person (QP) number. This QP registration is good for two years and allows you to apply for a handyman license.

Submitting Your Minnesota Handyman License Application

Now you are ready to submit a completed handyman license application to the Department of Labor and Industry (DLI). This requires providing:

  • Your QP exam certificate
  • Proof of insurance
  • Workers’ comp compliance form
  • Secretary of State business filing
  • Background disclosure form
  • License fee payment

You’ll need a general liability policy of at least $100,000 per occurrence and $300,000 aggregate. Workers’ comp provides coverage for any employees or subcontractors if you have them.

Make sure to get certificates of insurance that list expiration dates and coverage details from your provider.

The license application fee depends on your gross annual receipts:

  • Under $1 million – $320
  • $1 million to $5 million – $420
  • Over $5 million – $520

You can submit the license application digitally through the DLI eServices portal or mail paper forms.

It takes 7-10 business days for the state to process a new handyman license application. You cannot legally advertise or perform contracting work until approved.

Steps to Renew a Minnesota Handyman License

All handyman licenses in Minnesota expire on March 31 of odd-numbered years. To renew, you must:

  • Complete 14 hours continuing education (CE) credits
  • Update your QP registration
  • Provide current proof of insurance
  • Pay renewal fees
  • Submit renewal forms to DLI

At least 1 CE credit must cover the state building code and 1 credit should be on business practices. Courses are listed on the DLI website.

You’ll also need to renew your Qualifying Person registration every 2 years before it expires. This requires passing the business and trade exams again.

Expect to pay around $100 in state fees for a routine handyman license renewal. Late renewals also carry an additional $100 late fee.

Let your insurance agent know to send updated certificates of liability and workers’ compensation ahead of your license expiration.

Having all your renewal paperwork ready to submit as early as 90 days before expiration prevents any lapse in legal operating status.

Reciprocity for Out-of-State Handymen

Minnesota offers license reciprocity to handymen already licensed in certain states. This allows you to transfer an active license instead of passing Minnesota exams and applying as a new candidate.

Reciprocity is only available for comparable license types. For handyman businesses, reciprocity applies to:

  • Remodeler licenses from North Dakota, South Dakota
  • Home improvement contractor licenses from Wisconsin
  • Residential building contractor licenses from Iowa

In addition, Minnesota has reciprocity for certain electrical, handyman, and HVAC licenses. For example:

  • Class A electrical licenses from AK, AR, CO, IA, MT, NE, ND, SD, WY
  • Master electrician licenses from IA, ND, SD, NE
  • Master plumber licenses from ND, SD

You’ll still need to submit a handyman license application, pay licensing fees, and meet Minnesota insurance and business registration requirements to transfer your license.

The process can take 30-90 days for license verification and approvals. This allows you to legally work as a handyman while waiting, as long as you have the valid out-of-state license.

Bond Requirements for Licensed Handymen

Minnesota state law does not require residential contractors to obtain license bonds. However, some municipalities like Minneapolis mandate a bond to work as a handyman locally.

Contractors license bonds help protect consumers financially if the handyman fails to complete a project or honor warranties. A license and permit bond generally ranges from $5,000 to $15,000.

As an alternative, handymen can demonstrate “financial responsibility” by showing a net worth of $75,000 through a recent financial statement. This exemption does not apply to new businesses.

Insurance Requirements for Minnesota Handymen

Carrying business insurance is mandatory for licensed handymen in Minnesota, including:

General Liability Insurance

  • Minimum $100,000 per occurrence
  • Minimum $300,000 aggregate
  • Minimum $25,000 property damage

Workers’ Compensation

  • Covers all employees, subcontractors
  • Can be met through employers’ liability insurance for sole proprietors

Commercial Auto Insurance

  • $30,000/$60,000 bodily injury liability
  • $10,000 personal injury protection
  • $25,000/$50,000 uninsured motorist

Having the right insurance is crucial to protect your business assets and avoid paying costly claims out-of-pocket. Work with an agent to ensure full compliance with state and local requirements.

Expect to pay anywhere from $50 to $150 per month for a basic handyman insurance package. Costs increase for businesses with employees or multiple vehicles.

Compare quotes from providers like Next Insurance and CoverWallet to find the best rate.

Advertising and Performing Services as a Minnesota Handyman

You cannot advertise yourself as a handyman or contractor until licensed by the state. This includes online, print, radio, TV, vehicle signage, business cards, letterhead, and any other promotional channels.

The same applies to taking on any paid handyman or contractor work. Starting projects before obtaining a license may lead to penalties.

Check your city’s regulations as well, since some places require registering locally too. For example, handymen in Minneapolis need a permit from the City of Minneapolis Licenses and Consumer Services division.

Only perform work you are qualified for based on training and experience. Advertise specific services that fall under your license type’s specialties.

Misrepresenting your abilities or failing to honor warranties may jeopardize your license status. Thoroughly vet potential jobs and be clear with customers about what you can deliver.

Conclusion – Is Becoming a Licensed Handyman Worth It?

At first glance, meeting all the handyman licensing requirements in Minnesota may seem daunting. You need to study extensively for a difficult exam, pay several fees, file paperwork, and carry insurance.

However, being properly licensed provides long-term benefits that offset the initial costs and effort. Licensed handymen can:

  • Legally advertise across the state
  • Offer a wide range of repair and remodeling services
  • Pull local permits for bigger jobs
  • Build credibility through verified competency
  • Tap into contractor networks for job referrals
  • Access special financing, discounts, and rebates
  • Reduce personal liability through proper insurance
  • Provide peace of mind to customers

Overall, becoming a licensed handyman gives you the chance to grow beyond small cash side jobs into a full-fledged construction business. You gain the ability to take on most residential projects while working for yourself.

Just be sure to remain ethical and deliver professional service. Follow the handyman rules and requirements outlined in this guide to build a reputable remodeling company in Minnesota.