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If you’re considering starting a contracting business in Kentucky, congratulations. Starting a business is a big deal, and it’s not for the faint of heart. But when you’re the boss, you can choose the projects you want to work on, the contracts you want to take, and the areas you want to work in. You’re in charge—as long as you play along with Kentucky contractor licensing requirements. 

The issue is that it takes a lot of time and effort to get a business off the ground. You might not have the time to sort through all the different Kentucky contractor licensing requirements. Don’t worry — this guide will help.

Contracting in another state? Check out The Ultimate Guide to Contractors License Requirements in Every State.

Who needs a contractors license in Kentucky?

You might be wondering if the State of Kentucky requires a business like yours to carry a license, and that’s a good question. The fact is, Kentucky only requires electrical, plumbing, and HVAC contractors to carry a state-issued license.

That doesn’t mean you’re off the hook, however.

Kentucky defers most of its licensing requirements to the local municipalities. This means that contractors working in certain cities might have specific requirements to meet. Some might even need to carry licenses in several cities, depending on where they plan to contract.

Do you need a contractors license to file a mechanics lien in Kentucky?

When a state defers its licensing requirements to local municipalities, it won’t usually require contractors to carry a license to file a mechanics lien. That’s the case in Kentucky as well, as the state’s mechanics lien laws allow any contractor, regardless of licensing status, to file a mechanics lien.

But just because the state doesn’t require you to carry a license to file a mechanics lien doesn’t mean you shouldn’t carry one. If you file a lien but are still struggling to get paid, you might have to foreclose upon that lien in court. If you’re contracting in a trade for which the state requires a license, but you don’t carry that license, the court might not look upon your case so fondly. 

For that reason, you should never contract without a license if the state requires one.

Looking to file a lien in Kentucky? Check out How to File a Mechanics Lien in Kentucky – Step by Step Walkthrough.

How to get a contractors license in Kentucky

The only contractors that the State of Kentucky requires to carry a state-issued license are electrical contractors, plumbing contractors, and HVAC contractors. Other than that, all licensing will go through local municipalities and counties.

With that said, all businesses that operate within Kentucky are required to register their business with the state.

Business Registration

All businesses operating in the State of Kentucky need to register with the Kentucky Department of Revenue, including contractors. The steps include:

  1. Establish your business
    1. Sole proprietors and general partnerships need to register with the County Clerk in which the business resides
    2. Other businesses must register with the Kentucky Secretary of State
  2. Obtain a Federal Employer Identification Number (if you have employees)
  3. Register for Tax Accounts and Commonwealth Business Identifier
  4. Register with the State, County, and Local Governments (which you will more than likely accomplish when applying for licensing)

Most municipalities will require you to register with the state before applying for licensing, so this is the first step to getting a contractors license in Kentucky.

Electrical contractors

Applicants looking to start an electrical contracting business need to obtain a license through the Department of Housing, Buildings, and Construction. The requirements include:

  • Filling out this application
  • Obtain a liability insurance policy valued at $500,000
  • Proof of worker’s compensation insurance
  • $200 application fee
  • Passport photo
  • Pass the exam

In order to actually operate as a contractor, each electrical contractor must employ a master electrician. The requirements for master electricians include:

  • Filling out this application
  • 6 years of experience as an electrician
  • $100 application fee
  • Passport photo
  • Pass the trade exam

Plumbing contractors

Contractors starting plumbing businesses in Kentucky must also go through the Department of Housing, Buildings, and Construction, just like electrical contractors. However, there is a significant difference in the requirements.

Unlike electrical contractors, plumbers don’t have to carry a contractor’s license, specifically. However, they do have to employ a master plumber and work under that person’s trade license. The requirements for getting a master plumber license are:

  • Fill out this application
  • Pay $250 license fee
  • Attach a passport photo
  • Carry general liability insurance
  • Carry worker’s compensation insurance
  • Pass the trade exam

HVAC contractors 

HVAC contractors will also have to go through the Department of Housing, Buildings, and Construction for their licenses. And, unlike both electrical and plumbing licensing requirements, the master HVAC license and contractor license are one and the same. The requirements include:

  • Complete this application
  • Pass an exam including business and law
  • Attach a passport photo
  • Prove two years of mechanical experience
  • Proof of general aggregate insurance of $800,000 
    • $500,000 general liability
    • $300,000 for property damage
  • Pay the application fee, which ranges from $145.83 to $375, depending on when you apply

Contractor licensing requirements by municipality

Most licensing requirements in Kentucky fall under the control of the individual municipalities or counties throughout the state. Each can have its own requirements, so don’t assume holding a license in one city allows you to work in the neighboring city. Be sure to check with the local building department. 

Louisville

Contractors working in Louisville, Kentucky, will need to obtain a license through the Louisville Metro Department of Codes and Regulations. There are several license types available, including:

  • Building Type A – Contractors that will obtain multiple permits throughout the year
    • Includes contractors working on single or multi-family residences, and they’re required to complete 6 hours of continuing education each year.
  • Building Type B – For building contractors who wish to obtain only 1 building permit per year. 
  • Fire Detection
  • Fire Suppression
  • Electrical
  • HVAC
  • Mechanical Refrigeration

The requirements for receiving a contractors license in Louisville are:

  • Obtain an Occupational License Number from the Louisville-Jefferson County Revenue Commission
  • Submit proof of worker’s compensation insurance or an affidavit stating you don’t have employees
  • Carry liability insurance of $250,000
    • Must show the following as the certificate holder:
      Development, Louisville
      Office of Construction Review
      444 S. 5th Street, Kentucky 40202
  • Fill out this application

The fees vary depending on the application type, but Type A contractors will pay $125 while Type B contractors will pay $50. Most other licenses are $75, but refer to page 2 of the application packet for clarification. 

Lexington-Fayette

Contractors working in the Lexington-Fayette area will register their businesses instead of applying for a license. The steps are fairly straightforward. They include:

Revenue
200 E. Main St., 2nd floor
Lexington, KY 40507

  • Provide proof of liability and worker’s compensation insurance
    • $500,000 for each occurrence for General Contractors
    • $250,000 for each occurrence for General Contractors, Residential Only
    • $100,000 for each occurrence for Specialty Contractors

You’ll also have to complete this application, which requires the following information:

  • Registration type (General Contractor, General Contractor Residential, Specialty Contractor)
  • List of current Kentucky state licenses for the specific trades performed
  • Names, addresses, and social security numbers of all owners
  • Choose a mediation method from the application
  • Pay applicable fees:
    • $240 for General Contractor
    • $115 for General Contractor, Residential Only
    • $70 for Specialty Contractors
  • Have the application notarized

Bowling Green

Bowling Green, Kentucky, requires general contractors and specialty contractors to obtain licenses. Licensing falls under the control of the Contractors Licensing Board. License types include:

  • Carpentry
  • Drywall
  • Electrical
  • Fencing
  • Framing
  • Glass and Glazing
  • Handyman
  • Landscaping
  • Masonry
  • Plumbing
  • Roofing
  • Siding, and many more

Would-be contractors will fill out this application, and include the following information:

  • The names, addresses, and social security numbers of all owners or officers
  • Applicable state license
  • Choose license type
  • Provide a certificate of insurance showing a minimum of $100,00 general liability 
  • Proof of worker’s compensation insurance
  • Submit payment: 
    • $250 for General Contractor
    • $100 for Specialty Contractor

You will also need to obtain a Bowling Green Occupational License through the Finance Department, as well. 

Penalties for unlicensed contracting in Kentucky

While Kentucky certainly doesn’t condone unlicensed contracting, it leaves most of the penalties up to local municipalities. This means that many local jurisdictions have their own form of punishment for contracting without a license, and they usually include steep fines and a possibility of jail time.

For example, contractors in Lexington-Fayette who do not obey local licensing and registration laws are subject to fines between $50 and $500 per instance, and each day is a new instance. 

Protecting payments in Kentucky

Beyond simply ensuring that your business is above board with the local contractor licensing requirements, you have to protect your cash flow. Construction is a cash-hungry business, and just a few months struggling to bring cash in can bring a company to its knees. But, what’s the best way to protect your cash flow? Preserving your lien rights by keeping your eyes on some important Kentucky regulations and deadlines.

For instance, subcontractors and suppliers must send a preliminary notice (also known as a Notice to Owner) on all of their projects to preserve their lien rights, and the deadlines are a little wonky.

For projects valued at less than $1,000 or owner-occupied residential projects, contractors have just 75 days to send that notice. Projects valued at more than $1,000 bump that window up to 120 days. And, GCs don’t have to meet these requirements to preserve their lien rights.

There is also an important deadline to keep an eye on, and it’s the window to file a mechanics lien. For all project tiers working under a Kentucky contract, the deadline to file a lien is six months from last furnishing materials or labor. This goes for GCs, subs, and suppliers, and missing that deadline could jeopardize your ability to file a lien for non-payment.

The deadline to foreclose upon the lien is just as important as the deadline to file one. In Kentucky, all contract participants have up to 12 months from the date the lien was filed to enforce the lien. And, since the enforcement deadline cannot be extended in Kentucky, you must pay attention to this window.

With those deadlines and requirements in mind, you’ll be able to preserve your lien rights and protect your payment, ensuring your business can grow the way you planned. 

Learn more: Make Sure Kentucky Mechanics Liens Are ‘Subscribed and Sworn To’