In the State of Georgia, contractor licensing is governed by The Georgia State Construction Industry Licensing Board. Getting your Georgia contractor’s license is an involved process, but it’s worth it. That’s because a contractor license is necessary, and there can be serious consequences for contracting without a valid license.
Of course, certain specialty trades or work costing less than $2,500 might not require licensure. But that doesn’t mean you should just assume you don’t need one. It’s a good idea to play it on the safe side when it comes to licensing.
Let’s take a closer look at contractor license requirements in the State of Georgia.
Georgia Contractor’s License: Basic Classifications
Residential & general contractors
Georgia has four levels of license classifications for contractor licenses that could apply based on the work performed. It shouldn’t be too hard to determine which one you fall under:
- Residential-Basic Contractor: These contractors work on one and two-family residences, plus single family townhouses that are under three stories tall.
- Residential-Light Commercial Contractor: These contractors do all of the same work that’s included in the Residential Basic license, plus they can perform work related to multifamily and multi-use light commercial buildings and structures.
- General Contractor: These services are pretty much unlimited regarding the type of work performed, bid, or agreed upon.
- General Contractor Limited Tier: This is the same as General Contractor above, though they’re limited to contract amounts under $1,000,000.
Not every type of specialty contractor work requires a special license to operate in Georgia, but the state does have licensing boards for electrical contractors, plumbers, and a few other trades.
- Electrical contractors are licensed by the Georgia State Board of Electrical Contractors.
- Plumbing contractors are licensed by the Georgia State Division of Master and Journeyman Plumbers
- Air conditioning contractors are licensed by the Georgia State Board of Conditioned Air Contractors.
- Low voltage contractors are licensed by the Georgia State Board of Low Voltage Contractors
- Utility contractors are licensed by the Georgia State Board of Utility Contractors
How to apply
There are a few core requirements that you’ll need to apply for a Georgia contractor’s license, regardless of the category. The basic requirements to file for a Georgia contractor’s license are:
- Be 21+ years old
- Pass a criminal background check to show that you have good moral character
- Pass a written exam
- Pay the $30-200 application fee (it’s non-refundable)
These are just the basic requirements. Each category of license may carry additional requirements.
Insurance is something a lot of contractors may not consider initially, but it’s very important. When applying for a contractor license in the state of Georgia, individuals must show proof of general liability insurance. The amount varies based on the license classification. For example, contractors must show proof of general liability insurance with the following minimums (per occurrence):
- Residential-Basic Contractor: $300,000
- Residential Light Commercial Contractor: $500,000
- General Contractor: $500,000
- General Contractor Limited Tier: $500,000
Financial responsibility requirements
Minimum standards of financial responsibility are also required through a mix of minimum net worth, surety bonds, and a few other options. Contractors must show proof of one of the following for each license classification:
- Residential-Basic Contractor: a. Minimum net worth of $25,000 b. Bank Credit Reference Form c. $25,000 Surety Bond d. $25,000 Line of Credit Letter e. $25,000 Letter of Credit
- Residential Light Commercial Contractor: a. Minimum net worth of $25,000 b. Bank Credit Reference Form c. $25,000 Surety Bond d. $25,000 Line of Credit Letter e. $25,000 Letter of Credit
- General Contractor: Minimum net worth of $150,000
- General Contractor Limited Tier: Minimum net worth of $25,000
- Residential Contractors must apply through the State Licensing Board for Residential and General Contractors.
- General Contractors must apply through the State Licensing Board for Residential and General Contractors.
- Electrical contractors must apply through the Georgia State Board of Electrical Contractors.
- Plumbing contractors must apply through the Georgia State Division of Master and Journeyman Plumbers.
- Air conditioning contractors must apply through the Georgia State Board of Conditioned Air Contractors.
- Low voltage contractors must apply through the Georgia State Board of Low Voltage Contractors.
- Utility contractors must apply through the Georgia State Board of Utility Contractors.
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You’ve got your license. Now what?
If you’re based in a neighboring state such as Alabama, Florida, Louisiana, Mississippi, North Carolina, South Carolina, or Tennessee, you might be wondering if you can take advantage of reciprocity with your current license to work on a project in Georgia.
General contractors have reciprocity if licensed in Louisiana, Mississippi, and Tennessee. Residential Contractors are given reciprocity if they hold a license in Mississippi or South Carolina.
Out-of-state contractors will still need to pass the Georgia business and law exam before being issued a reciprocal license.
Air conditioning contractors have reciprocity from Louisiana, as long as they passed the exam. Georgia is currently reviewing reciprocity with South Carolina and Texas.
You can download an application for license reciprocity from the Georgia Secretary of State Forms page.
Learn more about licensing in nearby states:
Penalties for unlicensed contracting
While obtaining a license appears like a bit a work, it’s worth it. Georgia prohibits anyone from performing residential or general contracting without a valid license. While penalties are not specifically laid out, consequences can be steep. Where licensing is required and an unlicensed contractor has agreed to provide work — the contract is unenforceable.
What does that mean? It means that, if you don’t have the proper license for work you’re performing, you have no legal right to enforce the contract. If the owner decides not to pay you, you won’t be able to file a lawsuit, a mechanics lien, or anything else to force payment under the contract. Further, you’ll also be unable to obtain the necessary building permits without a valid license, which will cause even more issues down the road.
Bottom line: You can end up losing a lot more by contracting without a license than it likely wouldn’t costed you to obtain one.