General contractors in North Carolina must obtain a license from the North Carolina Licensing Board for General Contractors (NCLBGC) for construction projects valued at $30,000 or more. This license ensures general contractors meet specific requirements that promote public welfare.

This guide provides an overview of the licensing process, including eligibility, application, exams, fees, and renewal. It also covers license classifications, limitations, bond requirements, and insurance needs. Read on for everything you need to know about becoming a licensed general contractor in North Carolina.

Introduction

North Carolina general contractors overseeing projects worth $30,000 or more must hold a state-issued license. This license ensures contractors meet minimum competency standards and conduct business ethically.

The NCLBGC implements the licensing program under North Carolina General Statutes Chapter 87. The board’s mission is to safeguard life, health, and property while promoting public welfare.

Licenses are granted to individuals or companies. They specify allowed project values based on financials and business experience. Licenses also list particular work classifications based on contractor exam performance.

Requirements for Licensure

General contractor licenses have limitations and classifications. Limitations control project size, while classifications indicate permitted work types. Applicants must meet NCLBGC requirements relevant to their desired license parameters.

Eligibility Basics

All license applicants must:

  • Be at least 18 years old
  • Demonstrate good moral character
  • Establish a legally registered business entity
  • Meet minimum financial requirements
  • Pass relevant contractor exams

Applicants with bankruptcies within the past five years must provide additional financial documentation. Licensees cannot transfer licenses between business entities. However, they may transfer exam credentials between licenses.

License Classifications

The NCLBGC offers contractor licenses in these classifications:

  • Building – Commercial, industrial, institutional, and all residential building construction and demolition. Includes parking decks, site work, recreational facilities, and specialty work in concrete, roofing, masonry, etc.

  • Residential – Construction of residential units per the NC residential building code. Includes ancillary site work and specialty work in roofing, masonry, etc.

  • Highway – Highway construction including grading, paving, utility line relocation, etc. Includes specialty work in boring, tunneling, concrete, etc.

  • Public Utilities – Construction on water and wastewater systems. Includes specialty work in boring, tunneling, fuel distribution, communications, etc.

  • Specialty – Specific specialties like asbestos abatement, insulation, painting, or electrical work.

Applicants take exams related to their desired classifications. Their license will list approved classifications based on passed exams. Licenses may include multiple classifications if the qualifiers pass exams in those areas.

License Limitations

Licenses also specify project value limitations:

  • Limited – Can perform individual projects up to $750,000
  • Intermediate – Can perform individual projects up to $1,500,000
  • Unlimited – No project value limit

Financial documentation determines eligibility for each limitation level. Applicants must demonstrate sufficient assets to support desired project values.

Application Process

Prospective contractors should understand the NCLBGC application process before seeking licensure. Key steps include establishing eligibility, submitting an application, taking exams, and paying fees.

Application and Eligibility

Applicants begin by creating an online account through the NCLBGC Licensee and Qualifier Portal. This portal allows applicants to submit a new license application for board review.

The application itself collects information on:

  • Business entity registration
  • Proposed license name
  • Business financials
  • Owner and officer names
  • License limitation requested
  • Classifications desired
  • Personal background history

Applicants must also submit financial documentation like audited statements, agreed-upon procedures reports, or surety bonds. This demonstrates their ability to support projects at their requested license limitation.

Once an application is submitted, NCLBGC staff review it for completeness. If anything is missing, applicants receive requests for additional documentation. Otherwise, applicants receive exam eligibility notifications.

Examinations and Qualifiers

The NCLBGC approves eligible applicants to take North Carolina contractor exams. These exams relate to the license classifications and limitations sought.

Exams are administered by an NCLBGC partner called PSI Exams Online. Approved applicants receive exam eligibility letters from the NCLBGC with instructions for scheduling with PSI.

Most exams are open book and given on computers at PSI testing centers. Some specialty exams do require practical assessments. Everything is based on information from a free exam bulletin.

People who pass exams on behalf of a license application are called “qualifiers.” Licenses list the qualifiers that passed relevant exams for their approved classifications. Qualifiers can take examinations before or after a license application is submitted.

The NCLBGC offers some exam reciprocity with other states like South Carolina, Tennessee, Louisiana, Georgia, Mississippi, Alabama, and Florida. Applicants licensed in those states may qualify for exam waivers in North Carolina.

License Application Fees

Applicants must pay these fees to the NCLBGC when applying for a new license:

  • Application Fee – $75
  • License Fee – $75 per classification, up to $450 maximum
  • Exam Fees – $100 per exam attempt

So an unlimited building contractor license application with two building classification exams could cost $300 in total fees.

Fees are non-refundable if an application is rejected or withdrawn. The NCLBGC will only refund exam fees if they cancel the testing appointment.

Application Review and Licensing

Once the NCLBGC receives a completed application, fees, financials, and passing exams, the application goes to the board for approval. If approved, the applicant receives their contractor license by mail.

The full licensing process typically takes around 30 days from passing exams to license issuance. Delays may occur if applications require corrections or re-submissions. Applicants can check their application status through the online portal.

License Renewal

North Carolina contractor licenses expire annually on December 31. Renewing a license requires submitting an online renewal form along with continuing education credits and renewal fees.

Renewal Process

License renewal begins by logging into the NCLBGC Licensee and Qualifier Portal. Licensees can then access their renewal application.

Renewals require:

  • 8 hours of continuing education coursework, including a mandatory 2-hour law and rules course
  • Updated financial attestation
  • Employment verification for all qualifiers
  • Renewal fees based on number of classifications

At least one license qualifier must complete the 8-hour annual continuing education requirement. Education providers submit completed coursework directly to the NCLBGC.

Licensees pay $75 per classification renewed, up to a $450 maximum, along with a $10 late fee for renewals after December 31. Inactive licenses can forgo continuing education by paying standard renewal fees.

Once all requirements are met, the NCLBGC approves the renewal application. Renewed licenses take effect on January 1 for a new annual period.

Consequences of Late Renewal

Licenses not renewed by December 31 become invalid on January 1. Contractors cannot perform or bid on work with an inactive license.

The NCLBGC gives a one month grace period for renewal after expiration. Renewals completed in January simply require a $10 late fee.

If licenses go unrenewed for longer periods, consequences include:

  • Expired 1 year – $10 late fee plus 6 additional continuing education hours

  • Expired 2 years – $10 late fee plus 12 additional continuing education hours

  • Expired 3 years – $10 late fee plus 18 additional continuing education hours

Licenses unrenewed for 4+ consecutive years are permanently canceled per North Carolina law. This requires starting the full application process again.

Reciprocity with Other States

The NCLBGC limits reciprocal licensing for out-of-state contractors. However, it does offer some exam waivers based on existing licenses elsewhere.

Reciprocity Options

No states have full license reciprocity with North Carolina. But the NCLBGC provides exam waivers to licensed contractors from:

  • South Carolina
  • Tennessee
  • Louisiana
  • Georgia
  • Mississippi
  • Alabama
  • Florida

With license verification, contractors licensed in those states can waive classification exams. But they must still take the North Carolina business and law exam.

Contractor boards in other states may have reciprocity with North Carolina licenses. Licensees can email the NCLBGC for verification requests needed to apply elsewhere.

License Transfers

While licenses cannot transfer across state lines, examination credentials can. For example, a Georgia license holder could apply in North Carolina and transfer their passed Georgia exams to the new license application.

The process involves submitting a new full application to the NCLBGC along with license verifications from the existing state. The other state’s licensing board must complete a waiver form.

License Bonds

Bonds act as insurance to protect against contractor non-performance or malfeasance. They are not required for licensure, but qualify as alternatives to minimum financial requirements.

Bond Basics

License applicants must prove a minimum level of assets to qualify for each license limitation. Rather than submitting full financials, they can obtain a surety bond from an authorized insurer.

The NCLBGC accepts surety bonds from highly rated insurers licensed in North Carolina. Bonds must name the NCLBGC as the obligee and remain in effect continuously.

If a bond provider cancels coverage, contractors must immediately alert the NCLBGC and provide new proof of financial responsibility within 30 days. Otherwise, their license is automatically suspended.

Bond Requirements

These minimum surety bond requirements apply to each license limitation:

  • Limited – $175,000
  • Intermediate – $500,000
  • Unlimited – $1,000,000

Bonds function as insurance for injured parties. They cover actual losses from contractor breaches of contract, defective work, or other license violations.

Insurance Requirements

Unlike bonds, contractors must carry minimum insurance coverage amounts on active projects. Requirements exist for general liability, workers compensation, and others.

General Liability Insurance

General contractors need commercial general liability (CGL) at state-required minimums:

  • $300,000 per occurrence
  • $500,000 aggregate
  • $5,000 medical payments

Typical CGL protects against bodily injury, property damage, personal injury, and advertising liability claims. Policies should name the licensing board as a certificate holder.

Though North Carolina does not mandate CGL coverage, most owners require it on projects. Counties and municipalities also include it in permitting.

Workers Compensation

Workers compensation provides medical and lost wage benefits for job-related injuries and illnesses. It is mandatory for contractors with three or more employees.

Contractors must carry a workers compensation policy through an approved carrier, or be approved to self-insure. Failing to carry required workers compensation leads to fines.

Sole proprietors and partnerships without employees can file for exemption from the requirement. But having the coverage remains advisable given high injury risk in construction.

Vehicle Insurance

North Carolina requires minimum liability insurance on contractor vehicles like:

  • $30,000 bodily injury per person
  • $60,000 bodily injury per accident
  • $25,000 property damage

Contractors must carry proof of insurance in vehicles and produce it when law enforcement asks for it.

Conclusion

Obtaining a North Carolina general contractor license requires meeting eligibility criteria, completing an application, passing exams, and paying fees. Renewals are annual and include continuing education requirements.

Key license parameters like classifications, limitations, and qualifiers determine permitted work scopes and project values. Applicants must provide financials or bonds supporting their target license privileges.

Though North Carolina does not mandate general liability or other coverages, most contractors need insurance. Project owners, lenders, and permit authorities commonly require minimums.

Licensed general contractors serve as qualified, ethical construction professionals. They keep North Carolina citizens safe while advancing economic growth. Proper licensure and insurance helps enable excellent work.