North Carolina takes its licensing requirements very seriously. If you’re considering becoming a contractor in North Carolina — whether it be a general contractor or a specialty sub — you’re going to want to make sure you follow the North Carolina contractor licensing rules carefully.
But, there’s a lot of information available about North Carolina contractor licensing, and weeding through it all can be confusing. As always, help is here.
For more information on other states’ requirements, check out The Ultimate Guide to Contractors License Requirements in Every State.
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Who needs a contractor license in North Carolina?
Before you dive into all the specifics about licensing, it’s important to understand whether or not your business will require a license. There’s no sense in learning statutes if they simply don’t apply.
In North Carolina, there is a financial threshold that determines whether or not a general contractor needs to carry a license.
First, North Carolina considers anyone who takes a contract with another person to construct or make improvements to any building, highway, or public utility, or engage in earthmoving, to be a general contractor. And, if the general contractor takes a contract in excess of $30,000, that GC needs a license.
This applies to general contractors that are doing their own work and hiring and managing subcontractors. It also applies to contracts that start at less than $30,000, and through the nature of the business, exceed that benchmark due to customer change orders, issues, or other reasons. If the contract amount exceeds $30,000, you better have a license.
This is where things can get a little sticky. Generally speaking, subcontractors do require licenses in North Carolina. This includes plumbers, electricians, HVAC contractors, and roofers. Even interior construction contractors need to carry trade licenses to work in North Carolina.
While that’s all straightforward, those contractors might also have to carry a general contractor’s license.
If a business that typically operates as a subcontractor takes a prime contract with a property owner, and that contract’s value is over $30,000, they’ll have to carry a general contractor’s license in addition to their standard trade license.
Do you need a license to file a mechanics lien in North Carolina?
North Carolina imposes no specific licensing requirement in order to file a valid mechanics lien.
So, if you’re a contractor performing work that normally requires a license, but you don’t hold that license, you can file a mechanics lien. However, you cannot sue the other party for a breach of contract.
Regardless, it is never a good idea to perform work for which a license is a requirement without having the proper license.
Get all the information you need about filing a mechanics lien in North Carolina with Levelset’s North Carolina Mechanics Lien Guide & FAQ.
The 5 general contractor classifications in North Carolina
North Carolina has five different types of general contractor licenses for which you can apply. The following is a brief breakdown of what they are and what types of work qualify for which licenses.
1. Building contractor
The building contractor license covers all building construction and demolition. This includes commercial, industrial, institutional, and all residential building construction.
It also includes projects like parking decks, site work, grading and paving parking lots, driveways, sidewalks, and gutters. Additionally, it applies to contractors building retaining walls or screening walls, indoor and outdoor recreational facilities, running tracks, bleachers, and seating.
If you carry a building contractor’s license, it also covers you for these specialty licenses:
- Interior construction
- Marine construction
- Metal structures
- Swimming pools
- Wind turbine construction
2. Residential contractor
North Carolina’s residential contractor license covers all construction and demolition involved in the construction of residential units built according to the state’s Building Code Council building codes.
The residential contractor license covers you for the following specialties as well:
- Interior construction
- Swimming pools
3. Highway contractor
The highway contractor license covers all highway construction activity — including grading, paving of all types, installation of exterior artificial athletic surfaces, relocation of utility lines, parking decks, sidewalks, curbs, and gutters. It also allows you to construct guard rails, fencing, and signage.
The highway contractor license also allows for airport work. You’ll be able to grade and pave airport and airfield runways, taxiways, and aprons. This license also includes installing any of the fencing, signage, runway lighting, and marking.
The highway contractor license will also cover you for these specialties:
- Boring and tunneling
- Concrete construction
- Marine construction
- Railroad construction
- Grading and excavating
4. Public utilities contractor
The public utilities contractor license covers work on public water and wastewater system projects. Along with those qualifications, this license covers these specialties:
- Boring and tunneling
- Fuel distribution
- Electrical (ahead of point of delivery)
- Water and sewer lines
- Water purification and sewage disposal
- Swimming pools
5. Specialty contractor
Technically, the specialty contractor license is a form of a general contractor’s license. The State of North Carolina does include it under the general contractor licensing subsection. Keep reading for more details.
Plumbing and electrical licenses
Traditional plumbing and electrical licenses are a separate animal altogether. They each have their own licensing board and requirements. Electrical licensing is a function of the North Carolina Board of Examiners of Electrical Contractors. Plumbing licensing falls under the North Carolina State Board of Examiners of Plumbing, Heating, and Fire Sprinkler Contractors.
Both of these types of licenses have education and on-the-job training requirements. They also fall under three tiers: limited, intermediate, and unlimited. We’ll touch more on those more in another section ahead. Just note that the project value that each tier represents is different for these two trades. Their Boards’ respective websites are the best source of information.
North Carolina specialty contractor classifications
If you’re not planning on contracting directly with a property owner, you can operate your contracting business with a specialty license.
According to NCLBGC Laws and Regulations, as long as you’re working under a general contractor, you can work under one of the following licenses.
Grading and excavating
This specialty license covers digging, moving, and placing materials forming the surface of the earth with hand or power tools and machines — as well as work with earthen dams and the use of explosives used in these activities. It also includes clearing and grubbing, as well as erosion-control activities.
Boring and tunneling
The boring and tunneling license covers the construction of underground or underwater passageways by digging or boring through and under the earth’s surface. It also includes preparation of the ground surfaces at points of ingress or egress.
A communications specialty license includes the installation of the following:
- All types of pole lines
- Aerial or underground telephone systems
- Aerial or underground distribution for cable TV and master antenna TV systems for transmitting R.F. signals
- Underground conduit and communication cable including fiber optic
- Microwave systems, towers, and cellular phone towers, including the foundations and excavation required
The concrete construction specialty license covers the construction, demolition, and installation of foundations, precast silos, and other concrete tanks or receptacles, prestressed components, and gunite applications.
It does not apply to bridges, streets, sidewalks, curbs, gutters, driveways, parking lots, or highways.
A subcontractor with an electrical license has coverage for the construction, installation, alteration, maintenance, or repair of an electrical wiring system. This includes substations intended to be owned, operated, and maintained by an electrical power supplier.
A fuel distribution license covers the construction, installation, alteration, maintenance, or repair of systems for distributing petroleum fuels, distillates, natural gas, chemicals, and slurries through a pipeline from one station to another.
It also covers the excavating, trenching, and backfilling involved. The installation, replacement, and removal of above ground and below ground fuel storage tanks also qualify.
Water and sewer lines
A contractor with a water and sewer lines license can perform construction work on water and wastewater systems, facilities, and all the site work involved, including grading and paving parking lots, driveways, sidewalks, curbs, and gutters involved in the site.
This license also covers the following specialties:
- Concrete construction
- Interior construction
- Masonry construction
- Metal erection
An insulation license allows holding contractors to install, alter, or repair materials classified as insulating media use for the non-mechanical control of temperatures in the construction of residential and commercial buildings. It does not apply to the insulation of mechanical equipment or the associated piping and lines.
The interior construction license covers installing and demolishing acoustical ceilings, load-bearing and non-load bearing partitions, lathing and plastering, flooring and finishing, interior recreational surfaces, and window and door installations. It also includes the installation of fixtures, cabinets, and millwork. Holding contractors can also remove asbestos and replace it with non-toxic substances.
The marine construction license covers all marine construction and repair work. It includes deep-water work as well as projects in harbors, inlets, sounds, bays, and channels. It covers dredging, construction, and installation of pilings, piers, decks, slips, docks, and bulkheads. It does not include the construction of structures on top of docks, slips, and piers.
The masonry construction license has a few tiers. They include the demolition and installation of:
- Brick, concrete block, gypsum partition tile, pumice block, or other common masonry materials
- Fire clay products and refractory construction
- Rough cut and dressed stone, marble panels, slate units, structural glazed tile or block, glass brick or block, and solar screen tile or block
Contractors with railroad construction licenses can build or repair railroad lines. They can also clear and fill right-of-ways. They’re allowed to shape, compact, set, and stabilize road beds.
They’re also able to set ties, tie plates, rails, rail connectors, frogs, switch plates, switches, signal markers, retaining walls, dikes, fences, and gates. This license also includes any tool sheds or platforms required.
Licensed roofing contractors can install, demolish, and repair roofs and decks on residential, commercial, industrial, and institutional structures. It includes the use of materials such as:
- Clay tile
- Composite shingles
- All types of metal coverings
- Wood shakes
- Single-ply and built-up roofing
- Protective and reflective roof and deck coatings
- Sheet metal valleys
- Gravel stops
- Gutters and downspouts
- Bituminous waterproofing
The metal erection license includes field fabrication, demolition, erection, repair, and alteration of architectural and structural shapes, plates, tubing, pipes and bars used as structural members for buildings. It also includes the layout, assembly, and erection by welding, bolting, riveting, or fastening metal products such as:
- Curtain walls
- Tanks of all types
- Structural members of buildings
- Conveyor frames
- Cranes and crane runways
- Guard rails
- Steel Scaffolding
- Metal siding
- Fire escapes
- Stadium, arena, and auditorium seating
A swimming pools license covers all facets of constructing, demolishing, service, and repair of all swimming pools. This includes site work like excavation and grading, construction of concrete, gunite, and plastic-type pools, the decks and walkways that surround them, and all the equipment required to run a pool.
It does not include direct connections to a sanitary sewer system or potable water lines. It also doesn’t include the grounding and bonding of any metal surfaces or tying the pool into the electrical service.
The asbestos license has a caveat. A contractor does not need a license for contracts under $30,000. But, if the contract exceeds that $30,000 benchmark, a licensed contractor can renovate, demolish, repair, maintain, remove, isolate, encapsulate, or enclose Regulated Asbestos Containing Materials. They can work in any commercial, industrial, or institutional building, whether public or private.
The 3 North Carolina contractor licensing tiers
Beyond the different types of general contractor licenses, there are also three licensing tiers in North Carolina.
1. Limited license
Contractors holding limited licenses can act as general contractors for any single project with a value of up to $500,000, excluding the cost of the land and ancillary costs to improve the land.
These contractors must have current assets that exceed the total current liabilities by at least $17,000 or have a total net worth of at least $80,000. They can also provide proof of a $175,000 surety bond instead.
2. Intermediate license
Contractors holding intermediate licenses can act as general contractors for any single project with a value of up to $1,000,000. Again, this excludes the cost of the land and ancillary costs to improve the land.
Intermediate-level licensees need to have current assets that exceed the total current liabilities by at least $75,000. If that’s not possible, they can provide proof of a $500,000 surety bond instead.
3. Unlimited license
There are no restrictions on the value of single projects for contractors with unlimited licenses. However, they must have current assets that exceed the total current liabilities by at least $150,000. They can also secure a $1,000,000 surety bond instead.
How to get a contractor license in North Carolina
Once you have a license type and tier in mind, you’re ready to start the North Carolina contractor licensing application process. In general, applicants need to be 18 years old, be of “good moral character,” and provide proof of the financial requirements or surety bond.
Requirements for each individual license and tier vary, but there are some general requirements: You’ll have to prove you registered your business with the NC Secretary of state, provide a financial statement that proves you’re not in the hole, and pay the application fee. The limited license application fee is $75, the intermediate license fee is $100, and the unlimited license fee is $125.
After compiling all the necessary documentation and completing your application, you need to mail it to the North Carolina Licensing Board for General Contractors. The NCLBGC states the steps for the application process are as follows:
- Mail the application into the NCLBGC
- The Board reviews the application for completeness and compliance
- The Board will contact you via email if more information is necessary
- Once the application meets the requirements, the Board sends an exam eligibility letter
- Schedule and take your exam
- Once you pass, the Board conducts a final review and approval
- Upon final approval, the Board grants a license
License renewal requirements
Once you have a license, it expires on the first day of January each year.
North Carolina wants to ensure that you’re sticking to the financial responsibility guidelines, so along with your renewal application, you’ll have to include evidence of your bonds or assets.
Renewal fees also apply:
- Unlimited license renewal fee: $125
- Intermediate license renewal fee: $100
- Limited license renewal fee: $75
If your renewal application is late, there is a $10 fee for each month after January. If you let it lapse for four years, you’ll have to start the process over as a new applicant.
North Carolina licensing penalties
A state doesn’t go through all the hassle of creating as many licenses as North Carolina did without taking licensing seriously. The penalties for contracting without an appropriate license can be severe.
Contracting without a license is a Class 2 Misdemeanor in North Carolina. So is impersonating a contractor, or an engineer or architect recommending the award of a contract to an unlicensed contractor. The NCLBGC can also apply for an injunction, barring the contractor from continuing to work in that capacity until the issue sees a resolution.
There’s also the strong possibility of stiff fines, fees, and reparations. And, as mentioned above, unlicensed contractors performing work for which the state requires a license cannot file a breach of contract against the customer. Even if the work is top-notch, the contractor might not have a leg to stand on.
Payment protection is key
Regardless of whether you’re in compliance with licensing (which you should be), protecting your payments is important. Cash flow issues arise all the time in construction, and not having that reliable source of money coming in will make it next to impossible to grow your business.
General contractors, subs, and suppliers have strict deadlines they have to follow to protect their payments in North Carolina. They need to send preliminary notices on all their projects with 15 days of first furnishing labor or materials, and they have to file a mechanics lien within 120 days of the last furnishing.
Not protecting your payments according to these deadlines could mean you’re working for free.