If you’re considering starting a contracting business in Ohio, you’ll want to make sure that you’re aware of the laws surrounding state and municipal licenses for contractors.
Unlike many other states, Ohio has a statewide contracting license for only a few specific trades, while most contractor’s licenses are dealt with at the city level. Since sorting through all of the rules and requirements can be time consuming, we’ve laid out all of the information you need in this short article.
If you’re wondering whether you need a license, how to get one, and what other requirements there are for starting a contracting business, you’ve come to the right place.
Who needs a contractors license in Ohio?
At the state level, there are only a handful of contractors required to carry contractor licenses. Those contractors include:
- HVAC contractors
- Hydronic technicians
- Refrigeration installers.
These contractors will need to pursue a license through the Ohio Construction Industry Licensing Board. General contractors and subcontractors that don’t fall into those categories do not need to pursue licensing with the state.
However, just about every contracting business needs to carry a business license issued by the state. Businesses can register for a license through the Ohio Secretary of State.
Additionally, each municipality in Ohio has its own rules around contractor licensing, so contractors will need to refer to specific information about their city to determine licensing requirements. Below, we have licensing information for contractors in Columbus, Cleveland, and Cincinnati.
How to get an Ohio contractor’s license
Only a few contractor types need to pursue contractor licensing at the state level in Ohio, and most of those licenses go through the Ohio Construction Industry Licensing Board (OCILB). But, it’s also important to note that almost all businesses in Ohio need a basic business license.
How to get a business license in Ohio
Before conducting business in Ohio, all companies need to carry licenses issued by the Ohio Secretary of State’s office. This includes sole proprietors, general partnerships, limited partnerships, limited liability partnerships, LLCs (for-profit and nonprofit), and Corporations.
Realistically, the Secretary of State issues the license in exchange for registration (and, of course, a fee), so obtaining a license isn’t all that difficult. The state does offer this Getting Started Guide as a reference.
How to get an Ohio contractors license from the OCILB
Electrical, plumbing, HVAC, hydronics, and refrigeration contractors must carry licenses issued by the OCILB. But, instead of five different applications and requirements, the OCILB has just one set.
Applicants will need to fill out this application and mail it to the OCILB. The requirements for licensing are:
- Be at least 18 years old
- Be a US citizen or provide proof of legal residency
- Carry a tradesperson license in the trade for not less than five years immediately prior to the application date, or
- Be a registered engineer with 3 years of business experience in construction
- No convictions of a disqualifying offense
- Pass the applicable trade examination
- Carry a minimum of $500,000 contractor liability insurance
- Pass State and Federal background checks
- Have the application notarized
- Pay the applicable fees
The fee for the application is $25, and it’s payable with a check made out to “Treasurer – State of Ohio.” Applicants can mail the completed and notarized application and fee to:
Division of Industrial Compliance
Ohio Construction Industry Licensing Board
6606 Tussing Road, P.O. Box 4009
Reynoldsburg, Ohio 43068-9009
Examinations go through a third-party contractor, PSI. Once the OCILB reviews your application and approves it, you’ll receive a PSI Candidate Information Bulletin with instructions for scheduling your exam.
How to get a contractor’s license in Columbus, Ohio
The city of Columbus, Ohio, offers two types of licenses for building contractors:
- A General Contractor’s license allows a contractor to build all new structures or buildings, excluding accessory structures for existing one, two and three-family residences. However, these contractors can oversee and manage the modification, alteration, and repair of existing one, two and three-family dwellings.
- A Home Improvement Contractor’s license allows for the repair, replacement, remodel, alteration conversion, modernization, improvement, or addition to any residence or dwelling meant for three families or less.
There’s an important distinction between the two: A home improvement contractor cannot build a new home. However, they can build additions, garages, and other accessory structures for one, two and three-family residences. A general contractor can build a new one, two and three-family home, but any accessory additions after the fact must be completed by a home improvement contractor.
How to get a General Contractor’s license in Columbus, Ohio
The rules and regulations around general contractor licensing in Columbus, Ohio, are fairly straightforward. Applicants must use this application, and the requirements are:
- Fill out the application
- Provide proof of a bond in the amount of $25,000
- Provide a certificate of liability insurance listing the following as the certificate holder:
City of Columbus
Department of Building and Zoning Services
111 N Front Street
Columbus, Ohio 43215
- Limits must be no less than $300,000 for damages to a single person and $500,000 for one occurrence.
The application fee is $350, and there isn’t a trade exam required.
How to get a Home Improvement Contractor license in Columbus, Ohio
Home improvement contractors have different rules to follow than traditional general contractors. There are two types of Home Improvement Contractors: Home Improvement General Contractor and Home Improvement Limited Contractor. Both of these licenses will use this application, and the requirements are:
- Complete the application no later than seven days prior to a board meeting, which occur every 1st Wednesday each month. Later application will require waiting an additional month.
- Note that the application requires notarization
- Provide a copy of passing test results for the 767 Ohio Home Improvement Contractor Exam.
- Three years of hands-on experience in 1, 2, and 3-family residences for general contractors and one full year of hands-on experience for limited contractors, or
- Be a registered design professional with a valid certificate, or
- Be a graduate architect or engineer with one full year of experience
While completing the application, limited contractor applicants can choose between the following license types:
- Siding, windows, and doors
- Masonry fireplaces
- Swimming pools and spas
- Prefabricated fireplaces and wood or coal stoves
- Irrigation sprinkler
- Gypsum board
- Deck installation
- Asphalt paving
- Basement waterproofing
- Exterior lathing and stucco
- Sidewalks & driveway approaches-roofing
The application fee is $185, and checks should be made payable to the Columbus City Treasurer. Once complete, mail the application and the fee to:
City of Columbus
Department of Building and Zoning Services
111 N Front Street
Columbus, Ohio 43215
How to get a contractor’s license in Cleveland, Ohio
Cleveland’s application process for contractors is rather old school, comparatively speaking. Contractors will need to fill out this application, which is good for general contractors, plumbing and electrical contractors, as well as residential and unlimited work.
The requirements for applying are:
- Completed and notarized application
- Provide proof of bond coverage of at least $25,000
- Power-of-Attorney Form attached to the bond
- Certificate of insurance naming the City of Cleveland as “additional insured” and “certificate holder.”
- Insurance endorsement
- Copy of Articles of Incorporation, if applicable
- $150 application fee
Applicants will choose between the following contractor types:
- General contractor
- Sewer contractor
- Demo contractor
- Fireplace installer
- Plumbing contractor
- HVAC contractor
- Electrical contractor
As well as:
- One, two, or three-family only
- All types of work
Beyond these requirements, the application is straightforward, requiring written proof of prior convictions, work history, and other basic information.
How to get a contractor’s license in Cincinnati, Ohio
Unlike other cities which require licensing, Cincinnati prefers to lean on registration for contractors working within the city limits. All contractors need to register with the city, other than:
- Property owners working on their own one, two, or three-familyy dwellings
- A family member or volunteer of the property owner
- An architect or engineer
- Those performing general maintenance work
The requirements for registration include:
- Filling out this application
- An Assignment of Registration form for contractors registering a business as opposed to an individual (included in packet)
- Income tax contractor application (included in packet)
- Proof of a certificate of liability insurance
- Limits must be no less than $100,000 for damages to a single person and $300,000 for one occurrence.
- Proof of Ohio’s Workers’ Compensation Coverage
- Copy of State License of OCILB contractor
While completing the application, applicants will have to choose from the following designations:
- Home Improvement Contractor (and specialization, if applicable)
- Building Construction Contractor (and specialization, if applicable)
- OCILB Contractor (and license type)
The fee for applying is $130, which includes the $125 fee, plus a 3% technology fee, plus a 1% financial recovery fee. Checks are to be payable to the City of Cincinnati. Once the application is complete, mail it and the applicable fee to:
Department of Buildings and Inspections
805 Central Avenue, Suite 500
Cincinnati, OH 45202
Penalties for unlicensed contracting in Ohio
Ohio’s contractor licensing laws might be a little confusing, but one thing about them is not: It’s not a good idea to ignore them. The OCILB can hit contractors with a fee of up to $1,000 per day, per violation, for not carrying the appropriate license. And, that’s just the licenses required by the state.
Unlicensed contractors also need to concern themselves with getting caught by individual municipalities. Each city has the right to fine or penalize any contractor that doesn’t meet its licensing requirements, and the cities determine how much those fines will be.
So although unlicensed contractors do generally retain the right to file a mechanics lien in the event of non-payment, the fines they could face for getting caught will outweigh the benefits of skirting licensing.
Do you need a license to file a mechanics lien in Ohio?
Contractor licensing in Ohio is a bit confusing and complicated to navigate. But, as they apply to mechanics liens, these rules are rather simple. Ohio’s mechanics lien laws make no specific requirement around carrying a license and filing a mechanics lien. So, an unlicensed contractor generally has rights to a mechanics lien to combat non-payment.
But, consider this: Say you’re not carrying the license that the state requires, but you’re able to file a lien. If the project owner still decides they aren’t going to pay you, you will have to enforce the lien through court. How will that court look upon your unlicensed status as you attempt to foreclose on someone’s property?
For that scenario alone, you should carry the license that the state or local government requires. There are also other penalties, which we’ll discuss in a bit.
Protecting your payments in Ohio
Ohio contractor licensing requirements are important, but they aren’t the only regulations contractors need to keep their eyes on to run a successful business. Protecting their payments by paying close attention to Ohio’s mechanic lien laws is vital to protecting their cash flow and growing their businesses.
Specifically speaking, all subcontractors and suppliers must send a preliminary notice within 21 days of first furnishing to protect their lien rights. Known as a “notice of furnishing” in Ohio, this document serves as a friendly introduction between the sub or supplier and the people cutting the checks. It’s also vital to preserving lien rights, though general contractors do not have to send one to preserve theirs.
Beyond preliminary notice, Ohio contractors, subs, and suppliers also need to be aware that they have just 75 days from last furnishing to file a mechanics lien. This is significantly less time than many other states allow, so it can come and go quickly if a contractor isn’t paying attention.
Once a contractor files a mechanics lien, another deadline looms: The deadline to enforce the lien. In Ohio, that deadline is six years from filing. While that might seem like a ridiculous amount of time to wait for payment, contractors do not have to wait that long to foreclose upon their lien. In fact, a lot can change in 6 years, so it’s better to act sooner rather than later.