Starting a contracting business in Rhode Island is a big step. You accept a lot more risk as the boss than you do as an employee — but you also reap more of the benefits when things go well. One way to ensure your business can do as much reaping as possible is to stay on top of Rhode Island contractor licensing.
But starting a company is a hectic time. Between building a workforce, lining up projects, scheduling, and marketing, there’s only so much time in the day. Who wants to spend it digging through webpage after webpage about contractor licensing? Luckily, this guide can handle the heavy lifting for you.
Contracting in another state? Check out The Ultimate Guide to Contractors License Requirements in Every State.
Who needs a contractors license in Rhode Island?
Rhode Island’s contractor licensing laws are a little different than many other states. Technically, only a few contractor types need to carry state-issued licenses. This includes roofers, well-drillers, electricians, plumbers, and underground utility contractors.
But that doesn’t mean everyone else is free to contract. Quite the contrary: Rhode Island requires all contractors to register with the state, including general contractors and subcontractors. And there are some unique requirements to register, so it’s nothing to take lightly.
Do you need a license to file a mechanics lien in Rhode Island?
One of the aspects of Rhode Island contractor licensing that makes it so important is its impact on mechanics liens. Contractors who fail to register their business with the state do not have rights to a mechanics lien.
So, even if a contractor meets all the contract requirements and does a fantastic job, they can still struggle to get paid. And since mechanics liens are the most effective way for a contractor to recover their money, not having rights would be a massive blow to their leverage.
How to get a contractors license in Rhode Island
There are two routes a contractor might need to go in order to be on the up-and-up with Rhode Island’s contractor licensing laws; registration and licensing. Licensing typically requires passing an exam at some point in the applicant’s career and stringent experience requirements. Registration, which applies to most contractors in Rhode Island, is usually a matter of paperwork.
Contractors working in Rhode Island need to register their businesses with the Contractor’s Registration and Licensing Board. The application process is relatively straightforward, with just a few hoops to jump through.
First, all contractors must attend five hours of Pre-Education Courses before they’re able to apply. There are only two course providers to choose from, but luckily, nothing in Rhode Island is all that far to travel.
Beyond classes, contractor applicants must fill out this application. As of June 2020, all new applicants must register using the online application. It requires using the CRLB’s portal, creating a username and password, and completing the entire form.
There are also liability insurance requirements contractors need to meet. Regardless of the tier (general or subcontractor) or the specialty, all contractors must carry $500,000 of liability insurance. And, the policy has to list Rhode Island Contractors Registration and Licensing Board as the certificate holder.
Finally, applicants need to pay the $200 registration fee, for which they can use a credit card, debit card, or e-Check.
Note: Although the application does not require proof, corporations and LLCs must register their business with the Rhode Island Secretary of State.
Certain contractors need actual licenses that prove they have the experience and knowledge to do the job. Among these contractors are plumbers and electricians, though the list isn’t exhaustive.
The Division of Professional Regulation Board of Examiners of Electricians oversees electrical contractors.
Applicants can use this application. The board requires contractor applicants to be master electricians or hire and appoint one as an officer of the business. The fee for licensing is $100.
Plumbing contractors fall under the scope of the Division of Professional Regulation Board of Examiners for Plumbers. Like the electrical application, plumbing applicants must be master plumbers or hire and appoint one as an officer of the company. The board requires proof of work experience, as well. The fee for application is $75, and the two-year license fee is $240.
These other contractor types that require licensing as well:
- Burglar alarm
Penalties for unlicensed contracting in Rhode Island
Rhode Island makes meeting its requirements fairly basic and easy. And, for that reason, it expects everyone to play along. If they don’t, the consequences are severe.
For example, if the state catches a contractor working without registering or carrying the appropriate license, a first offense can be punishable by a fine up to $5,000. And, for any subsequent offenses, the penalty jumps sharply to $10,000 each.
Most importantly, remember that a contractor doesn’t have the right to file a mechanics lien if they don’t hold the appropriate license or they don’t register with the state.
Protecting your payments in Rhode Island
Obviously, it’s best to take Rhode Island’s contractor licensing requirements seriously. Getting a license or registration isn’t difficult if you have the qualifications, while the penalties for not following the rules are severe. But they aren’t the only rules contractors need to follow to protect businesses. The requirements and deadlines around Rhode Island’s mechanics lien laws are just as critical. And they vary quite a bit from most other states.
For example, general and prime contractors in Rhode Island must send a Notice of Possible Mechanics Lien within 10 days of commencing work to protect their lien rights. This document serves as Rhode Island’s version of a preliminary notice. Surprisingly, subcontractors don’t have to meet this requirement.
Both GCs and subcontractors need to send a Notice of Intent to lien to protect their right to a lien. They have up to 200 days from last furnishing to send the notice, which is significantly longer than most other states. The same 200-day window applies for actually filing the mechanics lien, and the NOI does not extend the window. For that reason, it’s best to send the Notice of Intent much earlier than the deadline.
Finally, once a contractor files a lien, they have just 40 days to take enforcement action, which is significantly shorter than most other states.
But the deadlines don’t stop there: contractors must first file a Notice of Lis Pendens before filing a Complaint to Enforce a Mechanics Lien. And, they only have seven days from filing the Lis Pendens to file the enforcement paperwork, so things move very quickly. This makes protecting lien rights and keeping your ducks in a row incredibly important in Rhode Island.
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