The General Contractor Licensing Process Overview
Licensing as a Florida general contractor is required for those wishing to operate as a general contractor in the state. General contractors lead and oversee all types of building projects, which can include residential, commercial, or industrial in nature. They are responsible for planning and coordinating a project from start to finish and ensure the job is done properly and on time. Most general contractors have a team of subcontractors, which includes other qualified contractors who specialize in certain areas such as plumbing, electrical work, and other services that are needed to complete the overall project.
Due to the complexity and size of today’s construction projects in Florida, there are a large number of regulations and requirements that must be met by a general contractor before they can legally obtain their license . The Florida Department of Business and Professional Regulation (DBPR) is responsible for the regulation of all general contractors in the state. They set certain guidelines for obtaining a contractor license, maintain the license database, and coordinate any disciplinary reviews related to Florida’s licensed contractors. The Florida DBPR also maintains the status of an applicant’s license, whether it has been granted, suspended or revoked.
Florida is unique in its licensing structure, offering both statewide and local contractors licenses. A local license refers to a license held at the city or county level, whereas a state license is obtained from the Florida DBPR and allows a contractor to work anywhere in the state regardless of the county or municipality. Applicants must meet certain qualifications, prove their experience and pass exams in order to obtain a general contractor license in either capacity.
License Fees Breakdown
When applying for a general contractor license, there are several fees that must be paid. The minimum fee required depends on the licensing route you choose. All costs are payable to the Department of Business and Professional Regulation (DBPR), which oversees the Florida construction industry. Here breakdown of the different fees:
Application Filing Fees
Classic Application $250
Endorsement Application $249
Additional Classification Application $125
Restructure Application (File after May 31, 2012) $450
Endorsement Fees
General Classification $100
Highway, Heavy, Utility, Excavation and Grading $150
Residential Builder & Specialty or Building Contractor $150
Residential and General Combined $150
Examination Fees
It is important to note that exam fees are also due at the time of application. These fees are subject to change depending on the state exam agency, which is generally Pearson VUE or Prometric. Exam fees are likely to vary based on the specific licensing path you seek. You will receive the exact amount due from the DBPR when your application is approved. You must pay exam fees before the DBPR will process it any further; otherwise, you will not be authorized to take the test.
License Fees
Once the application process is complete and you are authorized to take the license exam, you must pay the license fee as well. These costs range from $195 to $265 depending on your license classification and are due in order to receive your license package. This fee must be paid a second time if you need to reinstate your license later in life. The cost to reactivate your license is $75 and is due next year after the inactive date expires.
Additional Costs to Consider
Though the cost of the general contractor licensing exam is a common question, it is not the only one. One of the most significant expenses when applying for a Florida general contractor license can actually be the study materials that you use. In addition to the $150.00 filing fee for your application, the $300.00 application exam fee, and the $135.00 fee for the 4 examination re-tests should you not pass your examinations, the cost for study materials is typically between $500.00 and $1000.00, depending on the program. Most people also choose to enroll in a $500.00 – $700.00 exam prep course to ensure that they pass their practical exams. These courses typically last about 3 days, are offered several times per month, and are taught by professionals affiliated with the state regulatory board. These courses, however, are well worth the money as the state supplies at least 1 practice test per day and attendees score a near 100% success rate. Storage and filing of your liability insurance certificate is an added cost due to state requirements. Obtaining your Certificate of Competence and becoming a Certified Contractor costs around $20. Re-testing fees for any of your required examinations are $225 each for the Basic Business exam, $250 per each trade exam (Building, General, Residential, or Glass & Glazing), and $250.00 for the 2 hour Practical exam. If you plan to file your incorporation paperwork for your business, expect to pay around $140.00 for the Articles of Incorporation and at least an additional $125.00 for an Employer Identification Number (EIN) from the Federal Government. The state of Florida does not charge for Credits for Employed/On-site Supervisors or Journeyman Licensing.
Renewal and Continuing Education Fees
The cost of maintaining a general contractor license in Florida varies by county. Typically, the renewal is less expensive than the initial license fee. Hillsborough County, for example, charges just $45 for license renewal as opposed to $315 for an initial license. Other counties are even cheaper. For example, a license renewal in Alachua County will cost only $26. But in addition to the renewal cost, a general contractor may be required to take continuing education classes in order to maintain licensure. Depending on the type of contractor license you have, this requirement can be from one hour every other year to 21 hours every two years. Licenses can also have ongoing insurance and financial requirements. The costs of compliance can be significant for general contractors.
Budgeting for Future General Contracting Expenses
After the shoe drops on their construction company business license, many people are shocked at the cost of a Florida general contractor’s license. In addition to licensing costs, individuals looking to become licensed general contractors in the State of Florida are often troubled by the fact that there many other financial responsibilities that come with being a licensed general contractor. This can be a significant blow to those who were not counting on the financial burden that comes with a license to practice in the Sunshine State.
The following financial planning tips are designed to help you manage the costs of pursuing licensure as a general contractor in Florida:
Tip #1: Consider the Cost of a License Surety Bond
Bonds can be difficult to budget for since they generally last for a full year and typically require full payment up front. Also take into consideration this minor detail when budgeting; the annual cost of a bond is approximately $1000.00 a year and it’s possible that a license surety bond will be required for more than one year after the initial bond is filed so plan accordingly.
Tip #2: Dues, Dues, Dues and more Dues
In addition to the bond obligations previously discussed , licensed general contractors in Florida must pay for a number of other license renewals and dues. For example, GCs must initially pay biennial dues (i.e. dues that are paid every two years) of $340.00 to the Florida Department of Business & Professional Regulation (DBPR). GCs must also pay annual dues to the local Building Officials Association of Florida (BOAF); annual dues here can be around $25.00. Make sure you are aware of the renewal schedule on all of your membership renewals so that you are not caught scrambling for money to make up for lost time once the renewal date passes.
Tip #3: The Cost of Doing Business
In addition to bonding and license renewal costs, you can expect to spend around $150.00 on your professional liability annual premium. If you are running a construction business under your own name, you will need to pay for the costs of liability insurance that many counties require for licensure. You should plan for your county’s requirements here in advance by determining exactly what the county requires. Having an attorney on retainer during this process can help you save money by avoiding the cost that many people incur when seeking licensure and registration.
Possible Savings and Subsidies
While the application process and examination fees can seem high, there are various opportunities for financial assistance or services tailored to help individuals attain their licenses for a lower cost. While these potential options do not fall under the purview of the Florida Department of Business & Professional Regulation (DBPR), it is worth inquiring about them when applying for a license.
Scholarships are one such option. The American General Contractors of Florida Foundation offers need-based and merit-based scholarships for students pursuing education in an area related to construction management. The amount of the scholarship will vary from $1,000 to $5,000. This could be a significant saving for those looking to gain a technical education in commercial construction before entering into an apprenticeship or building their careers from the ground up. Texas Department of Licensing and Regulation defines "commercial construction" as including "new construction, additions to existing structures, alterations, and/or repairs to structures that are not intended for use as a single-family residence, duplex, townhouse, or apartment." A similar set of scholarships is offered by the Foundation of the American Institute of Constructors and is focused on those studying management levels of construction degree programs. The amount of the scholarship awarded varies from $1,000 to $2,000.
There are also programs offered by the U.S. Department of Labor, including grants and a Wage Program for apprenticeships through the ApprenticeshipUSA initiative. There is a wide range of available grants, from $250,00 to $11 million, however, the specific purpose and requirements of each grant can vary widely. For example, the ApprenticeshipUSA initiative provides funding to "build, support, expanding and diversify registered apprenticeship programs." This kind of program offers tools and resources for skill development that can help you save on the cost of paying for on-the-job experience in advance of taking the licensing exam. The ApprenticeshipUSA initiative also offers a wage program that provides federal subsidies for apprentices’ wages, basically subsidizing costs for employers who hire apprentices. Many state Department of Labor websites that offer apprenticeship resources also include necessary registration information required for funding and offers to those in a wide variety of sectors.
Although scholarships and other financial aid options may not be immediately obvious, calls to both the American General Contractors of Florida Foundation and your local Department of Labor and Industry will quickly shed light on a few major options from which you may benefit.
Final Thoughts
In summary, the cost of a general contractor license in Florida can vary depending on the type of license you pursue (state-certified GC versus local registered GC) but, no matter what, there is no getting around the fact that there will be an investment (financial and in time) necessary in order to secure a license and begin operating legitimately as a Florida contractor. While some contractors try to black out their income bracket and lie on their license application in order to get a "soft pass" from the state , going through the steps and investing the time and money will make you a better businessman, and avoid problems later on. Generally, your financial position should not hold you up from applying for a GC license. If you have a reasonable perception that you have the work experience (and the financial wherewithal to be a contractor), hire an experienced business lawyer handle the application and exam processing for you, and then the licensing will be a formality.