If you’re starting or already running a contracting business in Montana, chances are you need to register — and perhaps obtain a license as well. Montana requires anyone who constructs, alters, repairs, adds to, subtracts from, improves, moves, wrecks, or demolishes a building, highway, road railroad, excavation, or other structure, project, development, or improvement attached to a piece of real estate to hold a license.
We’ve put together a guide to show you what you need to do to get a Montana contractor license. Keep reading for all of the details.
How to get a Montana contractors license
Montana contractor licensing and registration can be pretty simple: Almost all contractors within the state of Montana have to carry a license or register their business with the state. We’ll go over the requirements for each of the typical contractor types so you’ll understand what’s required.
General contractors and subcontractors
General contractors and subs have to register their businesses with the Secretary of State, but there are two routes they can go afterward.
Montana offers both Independent Contractor Registration and Construction Contractor Registration, and your business’s structure will determine which is best for you. Both registrations go through the Department of Labor and Industry.
Montana considers Independent Contractors as contractors “independently established in their own business and have elected to not cover themselves under a Montana workers’ compensation insurance policy.” To apply for an Independent Contractor Exemption Certificate (which exempts you from the insurance requirements), applicants will fill out this form.
Independent contractor applicants must be free from control or direction from a hiring agent, engaged in their own independently established business, and covered under a self-elected workers’ comp insurance policy or obtain an ICEC.
Construction Contractor Registration is for contractors in the construction industry with employees, as well as corporations and manager-managed LLCs. This designation will include most construction contractors with employees, including sub trades.
Both business types will fill out this application. The fee for a contractor registration application is $70, and the independent contractor registration fee is $125. Neither of these registrations requires work experience or a written exam.
Licenses for electrical contractors fall under the control of the Montana Electrical Board, which is part of the DLI. The requirements are different than other subcontractors in that electrical contractors will have to take a written exam before the board issues a license.
To apply, click here. You’ll have to create a login and password, but you’ll be able to file for an electrical license online.
Plumbing contractors looking to start their own businesses will have to carry licenses issued by the Montana Board of Plumbers. This board also falls under the DLI. Montana requires applicants to pass a written exam before they receive a license or registration.
To apply, click here. Like the electrical contractor application, you’ll have to create a login and a password, but you’ll be able to apply for a license online.
Penalties for unlicensed contracting in Montana
The Big Sky State takes its licensing and registration requirements seriously. Construction contractors found working without a registration or without a license can find themselves racking up a $500 fine for each occurrence.
Performing electrical or plumbing work without a license is even worse. In Montana, such unlicensed work is a misdemeanor, and it could result in a minimum fine of $250 (with a $1,000 maximum) and a jail stint between 90 days and a year.
And, since Montana contractor licensing and registration is so accessible and affordable, new contractors shouldn’t risk the fines or jail time. A few simple forms (and in the case of an electrical or plumbing license, an exam), and you’ll be running an above-board business free from the potential of DLI-issued fines and penalties.
Do you need a license to file a mechanics lien in Montana?
Montana doesn’t have any hard and fast rules about licensing or registration and mechanics liens. But not holding a license or not registering your business when the state requires it is never a good idea. Even if you’re able to file a lien, if you have to foreclose on it, the court won’t find your unlicensed or unregistered status flattering to your case.
Protecting your payments in Montana
You should always do what it takes to make sure you’re on the right side of the registration or licensing laws in Montana. But if you’re not protecting your payments, there could be more at risk than a $500 fine for working without registration. Protecting your lien rights means meeting certain requirements.
For instance, Montana has Notice of Lien Rights requirements. All subcontractors and suppliers have within 20 days of first furnishing materials or labor to serve this notice on the property owner. The sub or supplier then has to file the Notice of Lien Rights with the county recorder’s office within five days of delivering it to the owner. General contractors do not have this requirement as the prime contract serves this purpose.
Montana subs, suppliers, and GCs have deadlines when it comes to mechanics liens, as well. All three tiers have 90 days from last providing labor or materials to file a lien. Missing this deadline could mean the difference between successfully protecting your payments or losing your rights altogether.
We’re not done, either. Should a GC, sub, or supplier have to foreclose upon the lien, they have yet another deadline to keep an eye on. All tiers have up to two years from the date of filing the lien to initiate an action to enforce it. While that might seem like a long time, you don’t necessarily have to way that long to enforce your lien.