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Starting a contracting business in Virginia is a big step, and it takes some careful planning. Between bidding jobs, lining up subs and materials, and other day-to-day activities, there’s a lot going on. And, squaring away your Virginia contractor licensing requirements needs to be a priority.
Levelset’s here to help. We’ve put together this article to help you better understand Virginia contractor licensing requirements and which licenses you might have to carry. Keep reading to learn more.
On the job outside Virginia? For information on licensing in other states, check out The Ultimate Guide to Contractors License Requirements in Every State.
Who needs a Virginia contractor license?
Compared to other states, Virginia’s contractor license requirements are generally straightforward. Anyone performing or managing a project — or removing, repairing, or improving a project valued in excess of $1,000 —requires a license.
Tradesmen like plumbers, electricians, HVAC technicians, gas fitters, and other typical subcontractors must also carry a state-issued license.
General contractors also need to carry state-issued licenses. GC licenses break down into a few categories based on project value and cumulative contract values, which we’ll go over in more detail.
Do you need a contractor license to file a mechanics lien in Virginia?
It’s not just the licensing requirements that are straightforward in Virginia. The rules around mechanics liens are plain as day: If the work you’re performing requires a license, you’d better have one. Otherwise, you’ll be unable to file a mechanics lien for unlicensed work. Not a good position to be in.
If you do need to file a lien in Virginia, learn everything you need to know with Virginia Mechanics Liens: Everything You Need to Know + Free Forms.
How to get a Virginia contractor license
Unlike some other states with multiple terms and government agencies, all contractor licensing in Virginia goes through the Department of Professional and Occupational Regulation. This is a good thing, especially for specialty trades, as it certainly streamlines the application process.
If you’re working on projects valued in excess of $1,000 in Virginia, you need a contracting license. As mentioned, the agency that oversees Virginia contractor licensing is the Department of Professional and Occupational Regulation.
There are three main types, and they break down by the value of the individual project and your business’s overall revenue throughout the year.
Here are the classifications, taken directly from the Department of Professional and Occupational Regulation website.
Class A contractors perform or manage construction, removal, repair, or improvements when (i) the total value referred to in a single contract or project is $120,000 or more, or (ii) the total value of all such construction, removal, repair, or improvements undertaken by such person within any twelve-month period is $750,000 or more.
Class B contractors perform or manage construction, removal, repair, or improvements when (i) the total value referred to in a single contract or project is $10,000 or more, but less than $120,000, or (ii) the total value of all such construction, removal, repair, or improvements undertaken by such person within any twelve-month period is $150,000 or more, but less than $750,000.
Class C contractors perform or manage construction, removal, repair, or improvements when (i) the total value referred to in a single contract or project is over $1,000 but no more than $10,000, or (ii) the total value of all such construction, removal, repair, or improvements undertaken by such person within any twelve-month period is no more than $150,000.
Depending on which license applies to your business, there are different requirements for experience and application fees.
To apply, you’ll use this license application. The DPOR outlines the steps to licensing clearly on the website:
- Create an entity: It’s very important to create an entity of some sort, whether it be a sole proprietorship, LLC, partnership, or corporation. DPOR will not issue a license to an individual.
- Name and register the business: Corporations, LLC, and limited partnerships have to register your business with the Virginia State Corporation Commission. Sole proprietors and partnerships register with the county in which they’re located.
- Choose a license classification: Determine which of the classifications works best for your company and projects: A, B, or C.
- Identify responsible management: Regardless of the entity type, contractors must identify the responsible management parties. For a sole proprietorship, that’s you. For corporations, partnerships, and LLCs, these are the individuals in charge of making sure the business maintains a license and obeys regulations. You’ll need names, addresses, and photo identifications for each of these parties.
- Determine a Qualified Individual: Each license type requires a particular amount of experience in the field, and to apply, you must have someone who meets those requirements. That can be you, a managing party, or someone under full-time employment. Again, you’ll need names, addresses, and identification.
- Choose and identify a Designated Employee: For Class A and B licenses, companies must have a full-time employee or responsible manager to act as the Designated Employee. This person must pass the required portions of the applicable exam. Again, you’ll need names, addresses, and identification. This is not a requirement for Class C licenses.
- Take the prelicensing course: All businesses need to have the Designated Employee or a Responsible Manager complete the 8-hour prelicensing course.
- Complete the application: Once you have all your ducks in a row, you can fill out the application. Make sure you fill out the entire application. Any missing information could prolong your approval.
- Submit your application along with the licensing fee to:
Commonwealth of Virginia
Department of Professional and Occupational Regulation
9960 Mayland Drive, Suite 400
Richmond, Virginia 23233-1485
Licensing fees are:
- $385 for Class A
- $370 for Class B
- $235 for Class C
- Wait it out: Once you submit your application and documentation, it’s a waiting game. The board will review your application and notify you of its decision.
There are also requirements based around net worth for Class A and B contractors. Class A contractors must show a net worth of $45,000 or more, and Class B Contractors must show proof of $15,000 net worth.
Sub and specialty contractors
Subs and specialty trade contractors are also required to carry a DPOR license. This includes plumbers, electricians, HVAC techs, well drillers, gas fitters, and more. The complete list is available on the application.
Subcontractors have the same requirements as general contractors. They must choose a license grade and follow all the steps outlined above. The only addition is they’re required to pass an additional examination for their specific trade.
Plumbers, electricians, HVAC technicians, and gas fitters will fill out this application.
For large projects, contractors will need a master-level license holder on staff. To apply for a master license, this person must have at least one year of experience as a licensed journeyman in their trade or 10 years of practical experience. They can also hold an out-of-state master-level license. This person will have to act as their Qualified Individual and Designated Employee.
For smaller projects, like those typical of a Class C contractor, a journeyman’s license might be all the state requires. Journeyman applicants must have one of the following:
- Four years of experience in the trade and 240 hours of formal vocational training
- Five years of practical experience in the trade and 160 hours of formal vocation training
- Six years of practical experience in the trade and 80 hours of formal vocational training
- Seven or more years of practical experience in the trade and 40 hours of formal vocational training
- Associates degree or certificate of completion for at least a two-year program in a tradesman related field
- Bachelors degree or certificate of completion from an accredited college or university in an engineering curriculum
- Ten years of practical experience in the trade
- An out of state journeyman’s license
There’s also an additional avenue for LP and Natural Gas fitters: Four years of practical experience and 80 hours of formal vocational training.
Specialty contractors will also have the same net worth requirements that they must meet: Class A contractors must show a net worth of $45,000 or more, and Class B Contractors must show proof of at least $15,000 net worth.
Penalties for unlicensed contracting in Virginia
Virginia takes unlicensed contracting very seriously. Under Virginia Code 54.1-1115, the penalty for contracting without the proper license in Virginia is a fine in the amount not to exceed $500 per day of violation. It is also a Class 1 misdemeanor, and you could also do up to a year in jail.
So, not only could you be risking your payments in the event of non-payment, but contracting without a license could land you behind bars for a while.
Protecting your payments in Virginia
Regardless of the state and the licensing requirements it sets, cash flow is always an issue in the construction industry. If you’re working without a license in Virginia, you’re putting your company in a tough position: Non-payment could cost you all of your positive cash flow.
Beyond licensing requirements, Virginia contractors have specific deadlines of which they need to be aware to protect their payments. For example, contractors, subs, and suppliers need to send a preliminary notice on all of their jobs within 30 days to protect their payments. They also have up to 90 days from the last day of the month in which labor or materials were furnished to file a mechanics lien. And, should they have to go to court, an action to foreclose upon the lien needs to take place within 6 months.
Between licensing requirements and strict deadlines, it’s important that Virginia contractors do what they must to protect their payments and continue to grow.