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Will you need a license to be a contractor in Georgia? There hasn’t been much publicity surrounding the recent legislation that created the Georgia State Licensing Board for General Contractors, but it may have a direct impact on your business. There will be three license categories: Residential – Basic (one and two family residences less than three stories), Residential – Light Commercial (multi-family and multi-use structures less than 4 stories and 25,000 square feet, not including hotels, schools, hospitals, public buildings, etc.), and General Contractor. Most of our clients that will be affected by this new legislation would fall into the General Contractor category. What is a general contractor? A general contractor is defined by the legislature as any contractor or manager of construction who submits an offer, bid, or proposal directly to an owner of a project to perform construction, improvement, addition, repair, alteration, remodeling, or demolition of any building, bridge or other structure, including design/build services. Exceptions to the general rule include water systems and dams constructed by a licensed utility contractor, licensed specialty trade contractors (the scope of work may include only one trade; any other trade work must not exceed the greater of $10,000 or 25% of the total value of the contract), and work on Georgia DOT and highway projects. How do you get a license? You will need to complete an application and submit it to the board for approval. The application will include, among other things, requirements for a minimum net worth of $150,000 (audit or review opinion letter signed by a CPA), a line of credit of no less than $50,000, general liability insurance of at least $500,000, and a reference letter from an architect. Once the application is approved, the qualifying agent (who has final approval authority over all of the business’s activities and meets certain other requirements) will need to take an extensive examination covering a broad range of topics. Once the test has been passed, the license will be issued in the name of both the corporation and the qualified agent. When does this start? The Board has made available the application forms on the Georgia Secretary of State’s web site. The Board will accept applications from those who wish to be exempted from the written examination portion of the licensing process from January 1, 2006 through July 1, 2006. This is a very important window of opportunity for contractors to become licensed without going through the complete process. The application process will begin on July 1, 2006 for those not seeking exemption from the written examination. How will this be enforced? Contracts entered into after July 1, 2007 by an unlicensed contractor will be void and unenforceable. In addition, the contractor, owner, and architect will be subject to both criminal and civil sanctions. The Georgia State Licensing Board for General Contractors is still in the process of organizing and mapping out the licensing process and forms. We encourage you to check the Georgia Secretary of State web site and the Board for the latest developments: State Construction Industry Licensing Board If you have any questions, please contact us. Sincerely, Large & Gilbert, P.C.
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