Licensing Guides
State Contractor License: How to Become a General Contractor in Alabama
Contractor, AL
Table of Contents
Why Do You Need a Contractor License in Alabama?
How Can You Get a Contractor License in Alabama?
Types of General Contractor Licenses in Alabama
What Are the Requirements of an Alabama Contractor License?
How Long Does It Take to Get a Contractor License in Alabama?
How Much Does It Cost to Get a Contractor License in Alabama?
Alabama Contractor License Training Programs and Schools
Does Alabama Reciprocate Contractor Licenses?
Do I Need to Renew my Contractor License in Alabama?
Are There Any Penalties for Contracting Without a License in Alabama?
We all need a place to live and work and those buildings require upkeep and repair. They’re often the biggest investments we make in our lives, and keeping them in good condition is essential. We count on professionals to know how to fix damage to or wear and tear on our homes and businesses. General contractors are typically the experts we rely on to help us with these repairs, and we need these men and women to know what they’re doing.
Many states require contractors to be licensed. Others simply require solid insurance to back up the essential work they perform. There are 520,900 construction managers and 1,599,800 construction laborers and helpers nationwide, according to the Bureau of Labor Statistics (BLS). Alabama employs 6,440 managers and 15,680 laborers and helpers. The national number for managers is projected to grow 9% from 2023 to 2033, and 8% for laborers and helpers. In Alabama, according to CareerOneStop, the U.S. Department of Labor’s job search website, the projected growth rate for laborers is 6%, and for managers it’s 7%. If you’re thinking about becoming a contractor or you want a job in the field, you need to know the requirements in your state or local jurisdiction. This guide will help you determine what you need before you get started.
Why Do You Need a Contractor License in Alabama?
The state of Alabama requires licenses for commercial contractors, commercial subcontractors, and residential contractors when projects cost a minimum amount. Two separate state boards regulate commercial and residential contractor licenses.
The Alabama Licensing Board for General Contractors regulates contractors performing commercial or industrial work. Prime contractors, also called general contractors, must be licensed if the project’s labor and materials cost $50,000 or more, according to the licensing board.
A general contractor is defined as an individual who constructs or superintends the “construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving or project or any improvement in the State of Alabama where the cost of the undertaking including labor and materials is $50,000 or more.”
Subcontractors under contract to a licensed prime contractor must hold a subcontractor license if their contract is $50,000 or more, which includes labor and materials.
The State of Alabama Home Builders Licensure Board (HBLB) issues licenses for residential contractors and roofers. Any contractor must hold a Home Builders License if they engage in the construction, remodeling, repair, or improvement of a residential structure where the cost, including labor and materials, exceeds $10,000.
Prime contractors licensed after Jan. 1, 1992 (license number 18908 or higher) must also hold a Home Builders License if the residential work meets the minimum project cost criteria, according to the HBLB.
How Can You Get a Contractor License in Alabama?
To get a commercial Alabama general contractor license, you’ll need to apply with the Alabama Licensing Board for General Contractors.
You’ll need to have commercial project experience with three references, which will determine the types of work you can do and your maximum bid limits. You’ll need to form a business and register it with the state. You’ll also need to meet minimum financial requirements. After you’ve submitted your application, qualifying individuals will need to pass a general contractor exam before obtaining a license.
To get a residential contractor license, you’ll need to follow the license requirements of the Home Builders Licensure Board.
You’ll need to submit a business-related credit report. Contractors with certain types of business structures will need to submit additional state documents. Those seeking an Unlimited Home Builders License will need to pass examinations.
Types of General Contractor Licenses in Alabama
For commercial or industrial work, the Alabama Licensing Board for General Contractors offers 10 major classifications for prime contractors. They include:
Building Construction (BC): Includes the construction of building structures, including modifications or additions intended for use for shelter, protection, comfort, or convenience. This includes building excavation and foundations.
Building Construction Under Four Stories (BCU4): Includes the construction of building structures and modifications not exceeding three stories high, and any roof structure or component not exceeding 50 feet high, which are intended for use for shelter, protection, comfort, or convenience. This includes building excavation and foundations. Work on buildings exceeding three stories must be done under the direction and supervision of a general contractor or construction manager with a Building Construction License.
Highways and Streets (HS)
Municipal and Utility (MU)
Heavy and Railroad (H/RR)
Swimming Pools (SP)
Mechanical (M)
Electrical (E)
Environmental (EV)
Demolition (D)
The Licensing Board also offers sub-classifications and specialty classifications for commercial contractor applicants who do not meet general contractor work experience requirements. Applicants have the option to request a sub-classification or specialty classification not listed in the application.
Building construction sub-classifications include:
Acoustical ceilings
Concrete
Dock equipment
Drywall and metal studs
Elevators and escalators
Flooring
Framing
Masonry
Overhead doors
Painting and wallcoverings
Metal buildings
Remodeling and alternations
Roofing and sheet metal
Siding
Sitework
Structural steel erection
Specialty classifications include:
Aerial fiber installation
Antenna and line installation
Athletic fields
Audio/visual systems
Cell towers
Concrete
Detention equipment
Energy retrofit
Equipment and machinery
Electronic signage
Fencing
Irrigation
Landscaping
Security equipment
Solar projects
Towers and equipment
The State of Alabama Home Builders Licensure Board has three classifications for builders working on residential projects.
Unlimited License: For residential work costing more than $10,000 that involves more than one trade or affects structural integrity. Those with an unlimited license are also qualified to perform residential roofing.
Limited License: For residential work costing more than $10,000 that does not involve more than one trade and does not affect structural integrity.
Roofers License: For roofing work costing more than $2,500.
Getting a general contractor license
The bottom line is that you need to be licensed in the state of Alabama to perform commercial or residential construction, repair, or improvements, if the project meets minimum cost requirements. Here’s how you go about getting a Prime Contractor License for commercial or industrial work.
OBTAIN WORK EXPERIENCE: Applicants must submit three reference forms from individuals who supervised commercial or industrial work performed by the applicant. References may include a licensed general contractor, registered architect, registered professional engineer, or another qualified person as declared by the board.
REGISTER YOUR BUSINESS: Register your business with the Alabama Secretary of State. You’ll need to submit a print screen, dated in the year in which you are applying, of your entity details from the Secretary of State. This step does not apply to individuals and general partnerships.
SUBMIT PROOF OF CITIZENSHIP: Submit proof of citizenship, such as a driver’s license, government identification card, or birth certificate. Those who are not U.S. citizens must show proof of lawful presence.
IDENTIFY QUALIFYING PARTY: Choose a qualifying party and fill out the qualifying party form. This is the individual, or individuals, who will take the business and law exam and a trade exam.
SUBMIT PROOF OF INSURANCE: Applicants must submit proof of current liability insurance, with the Alabama Licensing Board for General Contractors listed as the certificate holder.
SUBMIT FINANCIAL STATEMENT: Applicants must submit an audited, reviewed, or compiled financial statement prepared by a Certified Public Accountant (CPA) or a Licensed Public Accountant (LPA). Applicants must have a $10,000 minimum net worth and working capital for bid limit requirements.
SUBMIT ORGANIZATIONAL CHART: Applicants must submit the business entity’s organizational chart, including the principal individuals whose experience is included in the application.
APPLY FOR LICENSE: To apply for a commercial contractor license, download the contractor license application PDF. Mail the completed application form with the required documents and fee to the Alabama Licensing Board for General Contractors, 445 Dexter Ave., Suite 3060, Montgomery, AL 36104. Those who would like a mailed application may call the board at (334) 272-5030. The application and fee must be received 30 days before a regularly scheduled board meeting. Board meeting dates and application deadlines are found on this page.
PAY APPLICATION FEE: Applicants must submit a cashier’s check or money order for $300, made payable to the Alabama Licensing Board for General Contractors.
PASS EXAMS: Approved applicants must pass a business and law exam and trade exam as determined by the licensing board. The board lists PSI exam information and exam prep resources on its testing information page. Detailed information about the National Association of State Contractors Licensing Agencies (NASCLA) exams and references, such as the NASCLA Contractors Guide to Alabama Business Law and Project Management, can be found on this PDF.
Getting a residential or specialty license
The state’s Home Builders Licensure Board issues residential contractor licenses. Contractors seeking to work on residential projects may choose an unlimited license, limited license, or roofers license. Here’s how you go about getting your Unlimited Home Builders License.
DESIGNATE QUALIFYING REPRESENTATIVE: Partnerships, corporations, limited liability companies, and nonprofit organizations must identify a Designated Qualifying Representative (DQR) who meets license experience and ability requirements.
SUBMIT PROOF OF CITIZENSHIP: Submit proof of citizenship, such as a driver’s license, government identification card, or birth certificate. Those who are not U.S. citizens must show proof of lawful presence.
SUBMIT FINANCIAL DOCUMENTS: Applicants must order a business-related credit report, including a public records search, submitted directly to the board by a credit reporting agency. Cost is $35.
SUBMIT CERTIFICATE OF COMPLIANCE: Corporation, limited liability company, or limited partnership applicants must submit a Certificate of Compliance from the Alabama Department of Revenue.
PASS EXAM: Applicants must pass a business and law and trade exam. The Licensure Board contracts with Prov, Inc. to develop, and administer their licensing examination program for state-licensed home builders.
APPLY FOR LICENSE: The Home Builders Licensure Board lists PDF applications on this page. Applicants choose either an individual or corporate application. Mail complete, notarized applications to the Home Builders Licensure Board, 445 Herron St., Montgomery, AL 36104, or P.O. Box 303605, Montgomery, AL 36130-3605.
PAY LICENSE AND APPLICATION FEES: Applicants must pay a total of $350 when submitting the application. This amount includes the $250 license fee and a $100 new license application processing fee. The fee may be paid by personal or company checks, cashier’s checks, certified checks, or money orders made payable to the Home Builders Licensure Board.
For more information about a Home Builders License, visit the board’s FAQ page.
Subcontractor and specialty licenses are issued by the Alabama Licensing Board for General Contractors for commercial or industrial work. This licensing process is similar to the general contractor licensing process.
For more information, you can also consult our guides to getting your HVAC license, plumber’s license, or electrician license in Alabama.
What Are the Requirements of an Alabama Contractor License?
The requirements for licensure as a contractor in Alabama are all intended to demonstrate that an individual who will be serving the public is properly prepared to do the job right. To that end, there are age, knowledge/experience, and financial prerequisites.
You must be at least 19 years of age to enter into a contract in the state of Alabama.
You must have proof of U.S. citizenship or lawful presence.
Commercial general contractors must prove commercial work experience with three references.
Limited liability companies, limited partnerships, registered limited liability partnerships, and limited liability limited partnerships must register with the Alabama Secretary of State.
Commercial general contractors must submit a financial statement and have a $10,000 minimum net worth and working capital.
Commercial general contractors must obtain general liability insurance.
Meet state workers’ compensation insurance coverage requirements.
Apply for a contractor license.
Pay application fee.
Pass a business and law exam and a trade exam.
How Long Does It Take to Get a Contractor License in Alabama?
For a Prime Contractor License, the Licensing Board for General Contractors requires applications to be submitted 30 days before a board meeting.
For a Home Builders License, it takes the board three to four weeks to review after receiving the application, documentation, credit report, and test scores. Complete applications must be on file seven days before a regularly scheduled board meeting.
What Business Owners Need to Know
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How Much Does It Cost to Get a Contractor License in Alabama?
For a Prime Contractor License, it costs $300 to submit your application. You’ll also need to pay for PSI exams, which vary depending on the type of license. Most prime contractor exams administered by PSI cost $96 each, but the commercial building construction license exam costs $106, according to PSI testing information.
For an unlimited or limited Home Builders License, it costs $350 for the license and application fee. A credit report costs $35. Unlimited license applicants must pass two examinations. If both exams are taken the same day, it costs $130. If applicants take exams on separate days, each exam costs $80.
Alabama Contractor License Training Programs and Schools
There are no specific educational or course requirements to get a contractor license in Alabama, although contractors renewing their Home Builders License need to complete continuing education requirements. Many training programs throughout the state can help you prepare for a career in construction.
If you choose to start your career path at a college or university, you can pursue a degree in construction management or construction engineering. There are many higher education options throughout the state offering these types of programs.
The following schools offer a Construction Management, Building Construction, Construction Science and Management, or Construction Engineering Bachelor of Science degrees.
The state’s community college system provides many locations throughout the state to pursue a degree or diploma in the areas of construction and the trades.
If you don’t attend any formal schooling or training, but want to learn on the job, you may want to consider an apprenticeship. The Alabama Office of Apprenticeship lists apprenticeship information and apprenticeship opportunities throughout the state.
Other resources for finding Alabama apprenticeships in the skilled trades include:
Through an apprenticeship, you work, accumulate necessary experience, and can earn money all at the same time. The length of time to complete an apprenticeship depends on the trade and program.
Does Alabama Reciprocate Contractor Licenses?
Yes, both the Licensing Board for General Contractors and the Home Builders Licensure Board hold reciprocity agreements with other states.
For a Prime Contractor License for commercial or industrial work, the Licensing Board for General Contractors has reciprocity agreements with the Arkansas, Louisiana, Mississippi, and Tennessee general contractors boards, and North Carolina State Board of Electrical Contractors.
Prime contractor applicants must hold a state license for one year with the same classification being requested in Alabama to receive a trade exam waiver. Applicants will still need to pass the business law portion of the exam, according to the licensing board.
For a Home Builders License, those holding a residential construction license in Louisiana, Mississippi, North Carolina, South Carolina, or Tennessee may be exempt from taking the skills exam. Applicants still must pass the business and law exam.
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Do I Need to Renew my Contractor License in Alabama?
Yes, both the Prime Contractor License and the Home Builders License require annual renewal.
Prime contractors must download an online renewal form from the Licensing Board for General Contractors each year based on the company’s renewal month, according to the board’s renewal information page. Contractors must submit updated information, including insurance and financial information. Renewal cost is $200.
Those holding a Home Builders License must renew annually from Oct. 1 to Nov. 30. Set up an online account to use the Home Builders Licensure Board’s online renewal services. Applicants may also request a paper renewal package. Both unlimited and limited licensees must complete six credit hours of board-approved continuing education. The board allows some exemptions to this requirement, including those who renew for the first time. Renewal fee is $250.
Are There Any Penalties for Contracting Without a License in Alabama?
Yes. Those contracting without a license in Alabama are guilty of a Class A misdemeanor for each offense, according to state law. Also, those who consider a bid from a person who is not properly licensed are guilty of a Class B misdemeanor. It’s also a Class A misdemeanor for a contractor to build homes without a residential Home Builders License, according to state code. Those contracting without a license could face additional fines and penalties.
National Certifications
Other certifications can help you demonstrate your proficiency to potential employers and clients. There are many professional organizations that offer certification. These certifications are not required but can add to your marketability and therefore increase your opportunity to make more money.
Some of the top construction certifications are:
Occupational Safety and Health Administration (OSHA) Safety Certificate
Construction Management Association of America Certified Construction Manager (CCM)
National Association of Safety Professionals (NASP) Certified Safety Manager (CSM) certification
National Center for Construction Education & Research (NCCER)
Continuing Education
Residential contractors seeking to renew their unlimited or limited Home Builders License must complete six credit hours of board-approved continuing education, with two of the credit hours from an Alabama-specific course, according to the Home Builders Licensure Board’s continuing education page. The board allows continuing education exemptions, which include those who renew for the first time.
Although there aren’t continuing education requirements for commercial contractors, you will want to stay informed about emerging technology in the industry. There are many ways to keep yourself current in regard to the technology put to use in construction, roofing, energy and environmental designs, efficiency standards, and more. For example, distributors want you to know about their company’s latest offerings and will often hold training sessions about new and changing equipment and parts. Another option to stay in the know is continuing education courses with the Associated General Contractors of America (AGC).
Resources
You can stay up to date on contracting industry news several ways:
Check top blogs, including ServiceTitan’s blog.
Read about the latest industry trends, and discover ideas on how to grow your business.
Listen to top podcasts like ServiceTitan’s “Toolbox for the Trades” podcast.
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