Regardless of the industry, starting a business is a big step. In construction, launching your own company requires planning, paperwork, and hard work. But, you’ll finally have an opportunity to make your own rules, choose your clients, and call your own shots — within reason. You still have New Mexico contractor licensing requirements to meet.
But with all the planning, phone calls, hiring, and other tasks that a business owner has to undertake, you don’t have time to navigate all of New Mexico’s contractor requirements. To that, Levelset says we’re here to help. We’ve sorted through the contractor licensing requirement in New Mexico for you to streamline your company’s first steps. Keep reading to learn more.
Working in a different state? Check out The Ultimate Guide to Contractors License Requirements in Every State.
Table of Contents
Who needs a contractor license in New Mexico?
If you’re new to contracting in New Mexico, you might be wondering who needs a contractor’s license within the state. That’s understandable, as many states have varying requirements for contractors.
Here’s the deal in New Mexico: Anyone engaged in construction-related contracting in New Mexico must carry a state-issued license. This includes general construction, electrical, mechanical, plumbing, and more.
Lots more. New Mexico has 100 different classifications of licensing, but we’ll get into that further in a few.
The only exception to the rule is contractors (really handyman businesses) doing less than $7,200 in business each year do not require a license.
Do you need a license to file a mechanics lien in New Mexico?
With so many license classifications, does it seem like New Mexico would be lax on unlicensed contractors and mechanics liens?
If the work you’re performing requires a license, but you do not hold that license, you do not have rights to a mechanics lien in New Mexico. So, if you’re an unlicensed contractor and your customer decides that you’re not getting paid, you won’t have a mechanics lien to fall back on.
Looking to file a lien in New Mexico? Make sure you read How to File a New Mexico Mechanics Lien – A Step by Step Guide Walkthrough.
How to get a New Mexico contractors license
Now that you know that just about every contractor in New Mexico needs a license let’s dig into how to get one. All construction contractors need to go through the New Mexico Regulation & Licensing Department for their licenses. And, officially, it’s the Construction Industries and Manufactured Housing Division (CID) that handles the licenses.
But the CID doesn’t handle any of the testing. For that, New Mexico turns to a third-party testing company called PSI. For the most part, the entire process goes through PSI, right up until CID issues you a license.
The following sections apply to all contractor types.
Request for classification determination
Before a contractor can apply for testing, they must submit a classification determination request. While filling out this request, contractors will describe the types of work they do in as much detail as possible, the industry in which they intend to work (example: railroad, utilities, public works), and whether or not they intend to work as the prime contractor.
Once the request is completed, would-be contractors need to mail it to the following address and wait for their classification before applying for an exam:
New Mexico Construction Licensing Services
PO Box 45450
Rio Rancho, NM 87174
Fax: 505 433 5266
Qualifying party certificate
Each contractor must have a qualifying individual with the required experience for each classification covered by the license. This individual is the person that must have the necessary work experience.
Here are the work experience requirements.
Two years (4,000 hours):
- Residential Building (GB-2) and Building Specialties
- (GS-1 through GS-34)
- Asphalt Bitumen and Concrete Construction (GA-1
- through GA-5)
- Fixed Works (GF-1 through GF-9)
- Residential Wiring (ER-1) and Electrical Specialties
- (ES-1 through ES-10)
- Mechanical Specialties (MS-3 and MS-6)
Four years (8,000 hours):
- General Building (GB-98)
- Asphalt Bitumen and Concrete Construction (GA98)
- Fixed Works (GF-98)
- Electrical- Residential and Commercial (EE-98)
- Electrical Distribution Systems (EL-1)
- Mechanical (MM-98)
- Plumbing (MM-1)
- Natural Gas Fitting (MM-2)
- HVAC (MM-3)
- Process Piping (MM-4)
- Fire Sprinklers (MS-12)
- Dry Chemical Fire Protection (MS-14)
Once your company has a qualified person, you must complete a qualified person pack. That packet needs to include a complete and notarized qualifying party application and a complete and notarized work experience verification form. Along with those documents, applicants will also have to include a $30 fee, plus $6 for every additional classification. Also, include a self-addressed and stamped envelope.
Mail or hand-deliver the packet to:
PSI Services LLC
Po Box 45450
Rio Rancho, NM 87174
Scheduling an examination
If all of the qualified individual packet and work experience are accepted, PSI will notify you that you can schedule an examination. Don’t delay on this step. You only have six months from the type PSI approves your application, else you’ll forfeit your application fees and have to start over. And, once you pass the exam and receive a certificate, you need to attach it to a valid license within 12 months from the date of the exam.
Submit an application for licensure to PSI
If you thought you were done, you’re not. You still need to fill out an application for your license and mail it to PSI. That license application must include:
- A $36 application fee
- Proof of a license bond
- A tax registration number issued b the Department of Tax and Revenue
- A copy of the Qualifying Person’s certificate or test scores.
Along with the application fee, you’ll also have to pay a license fee, which is anywhere between $150 and $300, based on the classification.
Penalties for unlicensed contracting in New Mexico
As you might suspect, New Mexico does not mess around with unlicensed contracting. Not only will unlicensed contractors forfeit any of their rights to a mechanics lien, but they’ll also face criminal charges.
New Mexico’s CID website states that contracting without a license in the state is against the law. If the CID discovers someone working without a license in a field that requires one, the Division can stop the construction project immediately and file a criminal charge of unlicensed contracting in Metropolitan or Magistrate Court.
Luckily, there is an administrative process that a contractor can go through that allows them to become properly licensed.
Protecting your payments in New Mexico
Cash flow is one of the most common issues in the construction industry, and working without a license can put a stop to your cash flow right away. And, without recourse like a mechanics lien, you might not ever recover that money.
Beyond licensing requirements, contractors have other requirements and deadlines to keep their eyes on to protect their payments. For instance, subs and suppliers have 60 days to send a preliminary notice on residential projects with four or more dwellings for work valued at over $5,000. They also have 90 days from the date of project completion to file a mechanics lien.
For GCs, preliminary notices aren’t a requirement, but they do have to keep their eye on a 120-day countdown from the time the project is complete. If those 120 days pass and they haven’t filed a mechanics lien for late payment, they could be giving up their rights. Furthermore, it’s always best practice to send a preliminary notice on every project, even where they aren’t a mandatory requirement.
Regardless of the contractor’s tier, they all have two years to enforce a mechanics lien in New Mexico. You can’t extend that deadline either, so it’s just another set-in-stone deadline that New Mexico contractors must be aware of in order to protect their payments.