Planning to complete a construction project in Alabama? To ensure that your project goes smoothly and to avoid hefty penalties (among them, a potential misdemeanor), you must hold an Alabama contractor license.

The multi-step process primarily involves registering with the state, getting insurance coverage and passing an exam. It may seem intimidating at first glance, but if you know what to expect and gather the necessary documents beforehand, you can streamline your path to licensure.

Here are the steps toward becoming a general contractor in Alabama. And know that if you ever need temporary site services for your Alabama construction projects, ZTERS has your back. 

What does it mean to be a general contractor in Alabama?

First, let’s lay down some definitions. According to the Alabama Licensing Board for General Contractors, a contractor is someone who performs construction or oversees “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 labor and material costs exceed $100,000.

Subcontractors executing $100,000+ contracts (including labor and materials) under a prime general contractor must be licensed by the board.

Different types of contractor licenses in Alabama

Alabama has two different contractor licensing boards: residential or non-residential work. In general, contractors who undertake both residential and commercial projects will need to hold at least two distinct licenses.

Residential contractors

Residential contractors in Alabama are licensed by the Home Builders Licensure Board (HBLB).

A residential Home Builder “engages in the construction, remodeling, repair, improvement, or reimprovement of a residential structure where the cost of the undertaking including labor and materials exceeds $10,000.”

The HBLB offers three types of licenses:

• Unlimited license
  • Generally allows the contractor to perform any type of work—including roofing—on a residential project
• Limited license
  • Intended for residential home builders contracting directly with a homeowner to perform construction that requires a single trade and does not affect the structural integrity of the residence ($10,000+)
• Roofers license
  • Intended for residential roofers contracting directly with a homeowner to perform roofing (total cost exceeding $2,500)

Non-residential contractors

The Alabama Licensing Board for General Contractors (LBGC) licenses all non-residential contractors. This applies to all individuals, corporations, and non-profits that work on commercial or public contracts over $100,000, or on swimming pool (SP) construction worth over $5,000. This includes specialty contractors.

Steps for getting your contractor license in Alabama

Step 1: Register your business

The first step toward becoming a general contractor in Alabama is the same for anyone conducting business in the state: registering with the Alabama Secretary of State.

You will need to choose what type of business structures (e.g., sole proprietorship, LLC, partnership, corporation, etc.) you want to establish. If you need help deciding which structure is the right fit for you and your business goals, the U.S. Small Business Administration offers free or low-cost business counseling services to set you on the right track.

Step 2: Get applicable insurance coverage

Before submitting your application, you’ll need to provide proof of insurance coverage. This helps keep both you as a contractor and your employer (the contractee) safe. The type(s) of insurance you need will depend on your business structure and any specializations. 

Learn more about the different types of insurance coverage for both contractors and subcontractors as well as required liability limits here.

Step 3: Gather the necessary documents

In preparation for submitting your application and taking the required exams, you’ll need to have all the necessary paperwork in order. 

Some documents that you’ll need to have at the ready include, but are not limited to:

• Qualifying party form (includes personal information and SSN)
• Proof of insurance (see above section)
• Financial records (must be less than one year old)
• Commercial/industrial work experience including a minimum of three references from any of the following:
  • Licensed General Contractor
  • Registered Architect
  • Registered Professional Engineer
  • Qualified person as declared by the Board
• Organizational chart (depending on registered business structure)

Step 4: Submit the application and fees

Fees for residential contractors are as follows:

• Unlimited: $350
• Limited: $350
• Roofers: $250

And for non-residential contractors:

• General: $300
• Specialty: $150

Each application includes a checklist to help ensure you have all the materials needed. Sections are clearly labeled. For example, the unlimited residential contractor license application includes:

• Section 1: Application Information
• Section 2: Application Background and Business Information
• Section 3: Business-Related Financial Information
• Section 4: Citizens And Aliens Lawfully Present
• Section 5: Oath and Release for Individuals

Check out the Home Builders Licensure Board’s ‘How to Get Licensed’ page for a full rundown of requirements, FAQs, and links to the individual applications.

Step 5: Take the licensing exams

The Alabama Licensing Board for General Contractors requires applicants to pass two licensing exams: 

1. The NASCLA Commercial General Building Contractor exam – covers the technical trade elements of home building
2. The Alabama Business and Law exam – covers the business and legal requirements as a licensed home builder (must pass with a score of 70 or above)

Both exams are open book and timed (4 hours for Contractor Exam; 2 hours for Business and Law). Taking both exams on the same day costs $130. Otherwise, each exam costs $80. You’ll learn the results of your exam immediately upon completion.

Study up! Prep materials and study guides are available directly from the exam provider Prov, or through other platforms like RocketCert. You can also order practice exams directly from Prov for $30 each.

View more information and frequently asked questions on the Alabama Home Builders Licensing Board’s Candidate Information Bulletin. To register and schedule for testing, visit the Prov exam center.

Is an Alabama general contractor license valid in other states?

If you’ve held a license for at least one calendar year and it is in good standing, you may qualify for reciprocity in Arkansas, Louisiana, Mississippi, Tennessee, and North Carolina. The Qualifying Party for Alabama must be the same as the Qualifying Party for the reciprocal state.

How often do you need to renew your AL contractor license?

Home Builders licenses expire on December 31st of each year issued. Before being issued a new license, the licensee and/or designated qualifying representatives under the age of 60 must obtain six credit hours of Board-approved continuing education. See this list of approved courses.

Here’s how to process your renewal, from HBLB:

Online renewals and the mail out of traditional paper renewal packages begin October 1st of the current year. Renewals are considered timely when received or postmarked before 11:59 PM on November 30. All renewals received from December 1 through 11:59 PM December 31 are considered late and will be charged a $50 late fee. Any renewal application received on or after January 1 will be considered expired.

An expired Home Builders License may be renewed within three years of its expiration date by completing an expired license application.  If it has been expired for more than three years, you’ll need to reapply.

Alabama general contractors, choose ZTERS for successful projects!

Whether you’re currently a general contractor or are preparing to earn your license, ZTERS is in your corner. We provide reliable temporary and commercial site services nationwide. From roll-off dumpsters to temporary fencing to portable toilets and more, ZTERS makes it easy to bundle all your services into one simple invoice.