If you’re thinking about starting a contracting business in South Carolina, there are a few things on your plate. You’ll be the boss, so finding the right crew, putting together an effective marketing and business plan, and securing work falls on your shoulders. And, contractor licensing in South Carolina is extremely important (you’ll see why), so becoming familiar with the state’s regulations should be a top priority.
There’s a lot to know about contractor licensing in South Carolina. Between the different licenses, regulatory boards, and requirements, it can get pretty overwhelming. This guide will help.
Contracting outside South Carolina? Check out The Ultimate Guide to Contractors License Requirements in Every State.
Table of Contents
Contractor licensing in South Carolina: Who needs one?
There are two main categories of contractors in South Carolina, and their licensing requirements are quite different.
General and mechanical contractors performing commercial, general, or mechanical work valued over $5,000 have to carry a license issued by the state.
Residential builders and specialty contractors need to carry a license or register with the applicable departments to work on residential projects.
Do you need a contractor license to file a mechanics lien in South Carolina?
If there’s just one thing to take away from this article, it’s that contractors who don’t carry the licenses required by the state don’t have lien rights in South Carolina.
In other words, it doesn’t matter if a contractor meets every requirement within a contract, builds a structure perfectly to code, and delivers the job on time. If that contractor was supposed to have a license but doesn’t, they have no right to file a lien against the property in the event of non-payment.
And, since mechanics liens are the most effective way for contractors to recover the cash owed to them, not having lien rights is a scary place to be.
How to navigate contractor licensing in South Carolina
Contractor licensing in South Carolina isn’t terribly difficult to navigate. Once you understand which license and agency to go through, getting the license is straightforward.
General and mechanical contractor licensing
General and mechanical contractors who want to work on commercial and industrial projects valued at over $5,000 need to carry a license (the license also allows them to work on residential jobs). These licenses fall under the control of the South Carolina Contractor’s Licensing Board.
Eligibility for one of these licenses hinges on a few factors. For one, most applicants will have to take an exam (or several), which includes business and law as well as trade-centric sections. A third-party contractor, PSI, handles the examination process, and it’s the first step in becoming a licensed general or mechanical contractor.
The second factor is being able to prove two years’ of work experience (within the last five years) in the trade for which you’re applying. This does not need to be the business owner or applicant’s experience, but a Qualified Person employed by the business. Applicants who meet those standards can apply using this application.
For the most part, the application for licensing is fairly straightforward. Applicants will have to provide information such as licensee identifying information, Qualifying Person identifying information, and the type of business structure the company operates as. There are two areas that might get tricky; the license type and financial statement sections.
General contractor licenses include several types and specialty classifications:
- Building construction, including:
- Boring and tunnelling
- Interior renovation
- Railroad lines
- General roofing
- Specialty roofing
- Structural framing
- Highway, including:
- Asphalt paving
- Concrete paving
- Highway incidental
- Public Utilities, including:
- Water and sewer lines
- Water and sewer plants
Mechanical contractor licenses cover fewer trades:
- Air conditioning
- Lightning protection systems
- Pressure and process piping
- Packaged equipment
Along with the license type, general and mechanics contractors have to choose a Group Limit. The group limit chosen allows them to choose between submitting financial statements or securing a bond. There are different tiers of limit types, and with each ascending tier, there are more stringent financial statement requirements or higher bond amounts.
Learn more: 4 Financial Statements For Contractors
Applicants must also send in the application fee, which varies between $175 and $350. Licenses are good for two years, with general contractor licenses expiring on even years and mechanical licenses expiring on odd years. If you’re applying for a license with more than 12 months left in the license period, the fee is $350. For less than 12 months left in the license period, the fee is $175.
Once complete, mail in the application and license fee to:
SC Contractors Licensing Board
PO Box 11329
Columbia, SC 29211-1329
Residential and specialty contractors
Licensing applicants who only want to work on residential projects have a different avenue to navigate. These licenses (or registrations) fall under the Residential Builders Commission, and the rules are slightly different from General and Mechanical licensing.
In order to qualify for a license, contractors must have one year of Commission-approved experience under the supervision of a licensee. Applicants who want to take the appropriate trade exam must first apply to the Commission for review and approval.
Residential Builders need to use this application. They’ll have to provide identifying information for the applicant, proof of a surety bond valued at $15,000 or more, work experience information, as well as business identifying and structure information. The application fee is $100, and should the Commission approve the application, and an additional licensing fee applies after the examination:
- $160 if the license is issued on or between July 1, even-numbered year to June 30, odd-numbered year
- $80 if the license is issued on or between July 1, odd-numbered year to June 30, even-numbered year
Specialty contractors need to use this application. Much of the same information applies, including identifying information and work experience. However, specialty contractors need to secure $5,000 bonds and choose up to three classifications:
- Vinyl/Aluminum Siding
- Floor Covering
- Insulation Installer
- Stucco Installer
- Drywall Installer
- Painter/Wall Paper
- Solar Panel Installer
The application fees for these licenses are:
- $100 if the registration application is received on or between July 1, odd-numbered year to June 30, even-numbered year
- $50 if the registration application is received on or between July 1, even-numbered year to June 30, odd-numbered year
For residential electrical, HVAC, and plumbing contractors, the requirements are much the same as specialty contractors, including the bond amount ($5,000) and the identifying information, though fees do change. Each license type also has its own application:
- Electrical contractors must use this application
- HVAC contractors must use this application
- Plumbing contractors must use this application
The fee for application is $100, but upon application approval and successfully passing the exam, the following licensing fees apply (note: they are reversed from the Residential Builder fee schedule):
- $160 if the license is issued on or between July 1, odd-numbered year to June 30, even-numbered year
- $80 if the license is issued on or between July 1, even-numbered year to June 30, odd-numbered year
Penalties for unlicensed contracting in South Carolina
There might be quite a few license types and options available to contractors in South Carolina, but compared to other states, the process is fairly straightforward and the requirements are minimal. For that reason, South Carolina takes unlicensed contracting seriously.
Contractors who perform work without the appropriate license are subject to fines up to $250 for the first offense. But, a second offense can be much more severe, as it will bring your case before the Board.
And, don’t forget: Unlicensed contractors who are supposed to carry licenses don’t have lien rights in South Carolina. Sure, the fees and the Board may seem intimidating, but potentially losing your shirt on a job because you didn’t carry the appropriate license can be much worse.
Protecting your payments in South Carolina
There isn’t a lot of gray area when it comes to the requirements around contractor licensing in South Carolina. But it’s not the only requirement that South Carolina contractors need to understand in order to run a thriving, successful business. They also need to protect their lien rights by meeting certain requirements.
For instance, general contractors need to send a Notice of Commencement within 15 days after the project starts to preserve their lien rights. Subs and suppliers contracted with anyone other than the property owner must send a Notice of Furnishing Labor or Materials to the GC and owner.
And even if the GC, subs, and suppliers meet the initial requirements, they must also keep their eyes on certain deadlines. Regardless of contract tier, they each have just 90 days from last furnishing labors or materials to file a mechanics lien. Once the lien is filed, they only have six months to initiate enforcement before the mechanics lien expires, and along with it, their hopes of recovering their money.