Contractors in Alaska can have it pretty tough: Between dealing with the brutal winters and months without typical sunlight, making a living in the construction industry can be challenging. Mother Nature isn’t the only obstacle — Alaska contractor licensing requirements are serious as well. And, if you’re starting your own business, you need to know these regulations inside and out.
But starting a business is a busy time. Between developing a business plan, lining up subcontractors, marketing yourself to GCs, and gathering all the tools and manpower you’ll need, time is tight. This guide will help. It covers Alaska contractor licensing, saving you from scouring the endless amount of government websites, ensuring you’re on the up-and-up.
Contracting in another state? Check out The Ultimate Guide to Contractors License Requirements in Every State.
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Who needs a contractor license in Alaska?
Folks in the lower 48 might not realize how strict things can be in Alaska, and the state’s contractor licensing requirements are a prime example. Essentially, the state wants everyone who performs contracting work for hire to carry a contractor license of some type.
Plus, having just one license might not be enough. Many general contractors must also carry an additional residential license, which we’ll go further into in a bit.
Even handyman-type contractors performing work valued at less than $10,000 need to carry general contractor-type licenses, though they are slightly different from the typical GC’s.
Do you need a license to file a mechanics lien in Alaska?
Alaska contractor licensing laws might be strict regarding contractors, but they’re a bit more laid back when it comes to mechanics liens. Alaska’s mechanics lien laws do not explicitly require contractors to carry a license to file a lien.
But that doesn’t mean you’re off the hook.
We’ll go into specific penalties in a bit, but consider this situation regarding unlicensed contracting: You take a contract for a project and deliver it on time and up to spec. The project owner decides they aren’t going to pay your invoices, so you file a lien. The project owner still refuses to pay, so you have to foreclose on the lien.
Is the foreclosure court going to look fondly upon your licensed status? Maybe not. That should be reason enough to carry the appropriate license.
How to get a contractors license in Alaska
Alaska contractor licensing requirements are serious, but luckily, they aren’t overly confusing. Licensing is a function of the Department of Commerce, Community, and Economic Development’s Division of Corporations, Business, and Professional Licensing.
The main license types include general contractor, mechanical contractor, electrical contractor, and specialty contractor. The requirements for each license type are different from one another, but the process is relatively straightforward. Do understand that many of these licenses require passing a business and trade exam.
Unlike many states, Alaska sees GCs as regulated professionals, and they need to carry a general contractor license. These contractors can build new homes as well as perform both commercial and residential work.
There are three main types of general contractor licensing:
- General Contractor Without Residential Contractor Endorsement: This license type is for general contractors who perform primarily commercial work or residential work worth less than 25 percent of the home’s value. These contractors will use this application.
- General Contractor With Residential Contractor Endorsement: This license type is for general contractors who perform work on residential structures valued in excess of 25 percent of the home’s value. These contractors will use this application.
- General Contractor Handyman: This license is for handyman-type contractors who only take commercial or residential contracts valued at under $10,000. Handyman contractors will use this application.
Beyond choosing the appropriate license, applicants also have other requirements they must meet, including:
- A complete and notarized copy of the application
- Proof of general liability insurance:
- $20,000 coverage for property damage
- $50,000 injury or death to one person
- $100,000 for injury or death to more than one person
- Proof of worker’s compensation insurance
- A FEIN Number
- A surety bond in the amount of:
- $25,000 for General Contractors Without Residential Endorsement
- $20,000 for General Contractors With Residential Endorsement
- $5,000 for General Contractor Handyman
Regardless of the license type, the fee for applying is $350, which includes the non-refundable application fee and the license fee.
Residential Contractor Endorsement
Before you can apply for a General Contractor With Residential Contractor Endorsement license, you have to secure the endorsement. To do so, applicants must take the 16-hour cold climate course. They must also take and pass the residential contractors endorsement exam through a third-party contractor, PSI.
Specialty contractors and subcontractors must also carry licenses issued by the Division of Corporations, Business, and Professional Licensing. Most of the requirements are the same, though applicants can choose up to three specialties for which to apply. Those specialties include:
- Access Flooring
- Acoustical and Insulation
- Asbestos Abatement
- Carpentry Rough
- Carpentry Finish
- Concrete and paving
- Elevator and Conveying Systems
- Fence and Guardrail
- Floor Coving
- Liquid or Gas Storage Tank
- Low Voltage Alarm
- Mechanical Contractor
- Road Construction
- Security Systems
- Sheet Metal
- Solid Fuel Appliances
- Steel Erection
- Tile and Terrazzo
- Water and Sewer
Depending on the license, specialty contractor applicants will have to take and pass an exam through PSI.
Applicants will use this application. The same requirements apply for specialty contractors as general contractors, including worker’s compensation insurance and contractor general liability insurance. However, when it comes to bonding, specialty contractors must only secure $10,000 bonds. The fee for applying and license is $350, just as it is with general contractors.
While there is a mechanical specialty license, the Division of Corporations, Business, and Professional Licensing also offers a Mechanical Contractors License. This license is a requirement for the installation of any mechanical equipment.
Mechanical contractors will use this application, and they will have to take and pass the applicable exams through PSI. Beyond the exam, many of the same requirements apply as specialty contractors, including the $10,000 bond amount and the $350 in total fees.
There is an electrical specialty license, but it’s not enough for full-fledged contractors who install wiring and electrical equipment. Electrical contractors in Alaska must carry or employ someone who carries an Electrical Administrator’s License.
The electrical administrator may carry a license in:
- Unlimited Commercial Wiring
- Residential Wiring
- Controls and Control Wiring
- Inside Communications
- Outside Communications
- Unlimited Line Work Outdoors
Electrical administrator applicants will use this application, and there are two ways to apply: By examination (through PSI) and through credentials. The requirements for applying include:
- Complete, notarized application
- Complete resume detailing education and experience in the electrical trade
- “Certificate in Support of Applicant’s Experience and Qualifications” from three people licensed in the industry in any state
- Official transcripts from college or trade school
- For those applying through examination, a passing score of a trade exam held through PSI
- For those applying through credentials, verification of a current, active license in another state, as well as verification of a passed examination
The fee for both application types is $320.
Penalties for unlicensed contracting in Alaska
As you might’ve guessed by now, Alaska takes its contractor licensing requirements seriously. There are steep fines and penalties for not playing by the rules.
The fines are serious: the first offense for getting caught without the appropriate license is $1,000 for the first offense. Subsequent offenses will cost $1,500 each. Plus, each day is a separate violation in Alaska, so these penalties can add up in a hurry.
Protecting your payments in Alaska
Alaska contractor licensing requirements aren’t for trifling with, but they aren’t the only rules and regulations Alaskan contractors need to focus on. The deadlines and requirements around mechanics liens are just as important to protect their cash flow as licensing is to avoid fines.
For instance, for contractors, subs, and suppliers to preserve their right to a mechanics lien, they must send a notice of lien rights before the project even starts. Not only does this document protect your lien rights, it also explains what those rights are while providing a professional first impression with the project owner.
Beyond notices of lien rights, all project participants have 120 days from the contract completion or last furnishing to file a lien. But, if the project owner files a notice of completion, it cuts the deadline down to just 15 days from filing that notice. It gets trickier: If the lien claimant files a Notice of Right to Lien within that 15-day deadline, the deadline goes back to 120 days.
With notices like these, it’s critical to know and understand Alaskan lien rights.
And, beyond filing, all project participants have up to 6 months to enforce their lien before it expires. However, Alaska does allow extensions if the contractor records a Notice of Extension with the county recorder’s office.
With all those rules, deadlines, and notices in mind, it’s critical to stay up-to-date on Alaska’s mechanics lien laws to protect your lien rights.
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