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Virginia Cooperative Extension -
 Knowledge for the CommonWealth

State Contractor's Licensing Requirements for Landscapers

Farm Business Management Update, December 1997

By Bill Whittle of the Department of Agricultural and Applied Economics, Virginia Tech

Who is required to have a state contractor's license? Often people engaged in Nursery/Landscaping as a primary enterprise are unaware that they need to have a state contractor's license. Nursery operators frequently fall into this trap when they do landscaping as part of their business. Farmers who supplement their income with custom construction-type work are also unaware of the requirement.

The primary ways a person becomes aware of the licensing requirement by the state is 1) if a complaint is filed against him and 2) if the local building inspector's office requires a state contractor's permit number for the local permit. Unfortunately this lack of knowledge does not relieve the contractor of liability or potential penalty. Any person conducting work without a valid license may be fined up to $200 per day plus penalties and can be assessed for committing a Class 1 misdemeanor. The Code of Virginia in Title 54.1, Chapter 11 states "Contracting for, or bidding upon the construction, removal, repair, or improvements to or upon real property owned, controlled or leased by another person without a license or certificate is a Class 1 misdemeanor." Typically, a landscaper or custom fence builder may look upon this regulation as a requirement for builders only. Although seemingly written for the builder, these regulations cover landscapers, custom fence builders, and many other jobs farmers may do on the side.

Virginia has three types of Contractor's Licenses that are good for a two-year period. The Class C Certificate and the Class B and A Licenses are generally based on the value or contract price of projects the business is engaged in or is bidding on.

The Class C Certificate, costing $95, is the least demanding and is required if:
a) Single contract or project-total value is over $1000 and no more than $7500.
b) Total value within any 12-month period is no more than $150,000.

The Class B License, costing $140, is required if:
a) Single contract or project-total value is over $7500 or more and less than $70,000.
b) Total value within any 12-month period is $150,000 or more but less than $500,000.
c) Firm must have a Net Worth of $15,000.

The Class A License, costing $160, is required if:
a) Single contract or project-total value is $70,000 or more.
b) Total value within any 12-month period is $500,000 or more.
c) Firm must have a Net Worth of $45,000.

It is important to note that because of the concern for protecting water supplies, people installing/repairing irrigation systems (Landscape Irrigation Contractors) must have a Class A or B License, or Class C Certificate for a contract or project, no matter how small the cost involved.

It is not hard to see that in the nursery/landscaping business, landscapers doing even relatively small jobs can trigger the need for at least a Class C Certificate.

Besides higher project and yearly total project values, the Class A and B Licenses require taking an exam and having someone designated as a Qualified Individual with increasing amounts of experience in the specific area of the license. The multi-part exam (depends on the category applied for) includes topics on:

Regulations of Contractors
Building Codes
Business Organization
Contract Management
Risk Management
Labor Laws
Federal and State Taxes
Virginia Erosion and Sediment Control Regulations
 Board Rules and Regulations
Transaction Recovery Fund
Estimating and Bidding
Project Management
Financial Management
Lien Laws

The National Assessment Institute (NAI) conducts the exams for the state. The fee for the basic license ranges from $40 to $60. Study manuals for the basic exam are available from NAI for $35.00.

Although a Virginia contractor's license/certificate may be granted to a business, the business must also comply with the local licensing requirements set forth by the locality in which the business plans to work. Individuals wishing to conduct business in a locality should contact the local building inspector's office and the Commissioner of Revenue's office to determine local requirements. Some localities have reciprocal agreements with adjacent localities, while others do not.

For more information contact:
Commonwealth of Virginia
Virginia Department of Professional and
Occupational Regulation Board For Contractors
3600 West Broad Street
P.O. Box 11066
Richmond, VA 23230-1066
(804) 367-8500

For information on obtaining a study manual or taking the exam contact:
National Assessment Institute
3813 Gaskins Road
Richmond, VA 23233
(800) 356-3381

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