Problem State Contractor's Licensing Laws Part eight
North Caroline Contractor's Licensing LawsNorth Carolina's Licensing statutes are found in N.C. General Statutes Chapter 87. Contractors. N.C. Gen Stat Section 87-10 governs licensing and examination and renewal of licenses for all types of contractors, sub-section 4 entitled Specialty Contractors applies to trades or crafts. The North Carolina General Statutes define general contractor as a person undertaking to erect a structure or improvement worth over $30,000.00 that is not their own residence. The contract price is determinative. Electrical, plumbing, heating and fire sprinkler contractors must be licensed. Control is the principal distinguishing characteristic between a contractor and a subcontractor. N.C. Gen. Stat. Section 87-1 (2003) requires that the contractor be licensed during the time of contracting and during the time of construction.
The license may be used to determine who is liable for negligence. Allen v. Roberts Construction Co., 138 N.C. App. 557, 532 S.E.2d 534 (2000).
North Carolina Contractor's Licensing LawsSupervision of an unlicensed contractor by a licensed contractor does not constitute compliance with these licensing requirements. Sagar v. W.N.C., Inc. (1983) 64 N.C. App. 546, 307 S.E.2nd 585. If the contractor's license expires during construction for any reason, the contractor may recover for work performed while duly licensed. If the license is renewed during construction the contractor can also recover for work performed after the renewal. Brady v. Fulghum (1983) 309 N.C. 580, 308 S.E.2d 327. All licenses expire in December of each year following their issuance or renewal. N.C. Gen. Stat. Section 87-22 (2003). Subcontractors are not required to be licensed as general contractors in order to recover on their contracts. Mill-Power Supply Co. v. CVM Associates (1987) 85 N.C. App. 455, 355 S.E.2d 245; Vogel v. Reed Supply Co. (1970) 277 N.C. 119, 177 S.E.2d 273.
N.C. Gen. Stat. Section 87-10 (2003) provides for the licensing of general contractors with an unlimited
North Carolina Contractor's Licensing Lawslicense, an intermediate license allowing them to contract for a single project with value up to $700,000.00 and a limited licensee is entitled to contract for projects with a value up to $350,000.00. This statute distinguishes between licensees whose licenses have expired versus those who have an invalid license. The stated purpose of this statute is to protect the public from incompetent builders by precluding them from suing on their contracts. Hickory Furniture Mart, Inc. v. Burns, (1976) 31 N.C. App. 626, 230 S.E.2d 609. Subsequent procurement of the license does not validate a contract entered into by an unlicensed worker for purposes of recovery on their contract. Brady v. Fulghum (1983) 309 N.C. 580, 308 S.E.2d 327.
1) Minor Work Exemption: None
2) Other Exemptions/Exceptions: See N.C.G.S. ? ? 87-1.1, 87-43.1.
North Carolina Contractor's Licensing Laws3) Assignment/Transfer: A license may be issued in the name of a corporation, partnership or DBA provided that one or more officers, full-time employees or both are licensed. N.C. Gen. Stat. Section 87-26 (2003). Examination by a responsible managing officer or member of a business entity is required by N.C. Gen Stat. Section 87-10. The licensee in those situations is required to supervised contracts to completion. A "qualified individual" is one who is qualified in the specific license classification, a "listed qualified individual" is one with a specific duty and authority to supervise and direct electrical contracting. N.C. Gen. Sta. Section 87-41.1 (2003). These North Carolina statutes include special provisions for licensing of heating contractors in a separate provision. N.C. Gen. Sta. Section 87-57 (2003) governs refrigeration trade people. Only one person in a partnership or corporation need have a license. N.C. Gen. Stat. Section 87-62 (2003)
North Carolina Contractor's Licensing Laws4) Penalties: It is a misdemeanor to practice contracting without a license. N.C. Gen. Stat. Section 87-13 (2003)
5) Insurance/Bond: Bonds are required for intermediate licensees (working on projects valued at over $25K but under $75K) and for unlimited licensees (working on projects in excess of $75K).
6) Reciprocity: North Carolina has reciprocity with Alabama, Florida, Georgia, Mississippi, South Carolina, Virginia, West Virginia for electrical licensees. See N.C.G.S. ? ? 87-15.1, 87-22.2.
7) Special Rules: A contract for the improvement of real property in North Carolina which selects the laws of another state or the forum of another state as the place for litigation, arbitration or other dispute resolution is void and against public policy. N.C. Gen. Stat. Section 22B-2 (2003)