An Introduction to the Class C Contractor License
Virginia’s classification of general contractors is a means of differentiating projects based on their complexity. These classifications are broken down into Class A, Class B, and Class C contractor licenses. Class C is the smallest of the classifications and is for contractors who plan to undertake the smallest types of projects. This license is particularly suited for contractors who wish to specialize in all aspects of construction but may not have the capital to manage large construction projects.
Class C contractors are usually involved in residential or commercial projects, but their limit of $120 , 000 per project makes them suitable for smaller general construction projects. They may build homes, commercial offices or retail centers, but are not authorized to work on a project that is expected to cost more than $120,000.
Class C contractors can also perform plumbing, electrical, and heating and cooling projects as well as demolition work. The maximum worth of the project must not be more than $7,500 for all labor, materials and other overhead, including any labor hired by the contractor.
The restrictions imposed by Class C license are no more restrictive than those faced by any other contractor performing similar work on a comparable project.
Requirements for a Class C Contractor License in Virginia
To qualify for the Virginia Department of Professional and Occupational Regulations (DPOR) class C license, the applicant must be at least 18 years of age and have legal residency in the U.S. There is no minimum education required to obtain the class C license. However, to qualify for a class C license, the individual must demonstrate two of the four qualifications outlined by the DPOR:
- (1) Evidence of six months experience as a master, journeyman, tradesman or worker.
- (2) A certificate of completion of a formal electrical apprenticeship program registered with the Virginia Department of Labor and Industry.
- (3) Copy of a license or certification from another U.S. jurisdiction which has requirements that are substantially equivalent to those set forth in the regulations upon which the application is based.
- (4) Evidence of two years of post-secondary education from an accredited two year program in a field that is directly related to the work of the class of license sought.
Drivers of Heavy Trucks must be at least 21 years of age. The DPOR class C license allows for individuals to engage in the following types of work:
Class C License Application Process
When applying for the Class C License in Virginia, it’s important to understand the step-by-step process involved. The first step is to submit an application form available from the Virginia Department of Professional and Occupational Regulation (DPOR) at www.dpor.virginia.gov. Depending on the license type you’re applying for (general or small project, or home improvement), you must complete different sections of the application. In addition to your completed application form, you will also need to include required documents such as proof of work experience and financial responsibility documentation. If you apply as a General Contractor, you must prove that you have been working under a licensed contractor for two of the five years immediately previous to applying for a license.
Once you have completed your application, you can submit it by mail or in person at your local DPOR office. If all requirements are met, then it will usually take four to six weeks to receive your license. However, you should be prepared to take an exam after you apply for the license. The Board has adopted the Uniform National 200 questions technical and 50 questions laws regulations examinations. You will be notified when you are eligible to sit for these exams. In some cases, you might be eligible to take the exam first, prior to completing the application. If you have any other questions about the Class C License requirements, be sure to visit the DPOR website for further information.
Examination for Class C Contractor License – Plus Study Materials
All first-time Virginia Class C License applicants are subject to the examination requirements. The examinations are administered by Pearson VUE on behalf of the Department of Professional and Occupational Regulation (DPOR), Board for Contractors.
Most individuals who apply for a Class C license are required to take the "Business, Law and Project Management" and trade specialty tests. The specific trade tests for the Class C license are: electrical (general), mechanical (limited), plumbing (limited), and home improvement. Applicants may choose to sit for the business test only without taking a trade test. The business examination is required for licensure as a sole proprietorship, corporation, limited liability company, or partnership (but a trade test is only required if you will be the supervisor on the license). Applicants who already hold a Virginia Class A or B license OR an equivalent license issued in another state DO NOT have to take either the business test or a trade test. If you choose to sit for the business exam only, you can do so by visiting a Pearson VUE test center or scheduling an online proctored examination. Pearson VUE test centers are located in Richmond, Virginia Beach, and Winchester. For online testing, you must be able to fulfill system requirements specific to your computer and have a webcam for the duration of the test. A complete list of requirements is available on Pearson VUE’s website. The business exam lasts four hours while the trade specialty examination lasts 90 minutes. The COSNL license study manual available on our website includes information about the examinations including the specific subjects that are tested. It also includes practice questions and a description of the manual state codes for Virginia. The material also contains a list of providers offering continuing education courses that meet the course hour requirements for license renewal – many of which are free. From the day on which you establish an account with Pearson VUE to take your exams, you have twelve (12) months in which to successfully pass all exams required for licensure. Each time you re-register for an examination, the twelve (12) month countdown begins anew. Regardless of whether you take the business and/or specialty examinations, you should plan for at least two hours of review per day before the test. Consider having a few friends test you on your trades if you are nervous about taking them. Make sure you focus on the codes that are most frequently referenced in the examination outlines from the board and your COSNL manual.
Costs and Fees
Every Virginia Class C Contractor must pay a license application fee of $50 upon filing to the Department of Professional and Occupational Regulation (DPOR) Board for Contractors (Board). In addition, in order to maintain your license in good standing, you will be required to pay an annual $50 renewal fee. Beyond the licensing fees, before you apply for a Class C Contracting license, you must satisfy a minimum net worth requirement of $10,000. In addition, all applicants for a Class C Contractor must have the requisite credit score that clears a background check. Any applicants with a credit score that is less than $640 will not be eligible for a Class C Contractor license.
In addition to the Class C contractor, there are a wide range of additional contracting categories for which contractors may also apply. Each additional category has its own annual renewal fee as well as additional net worth and bonding requirements. For example, requirements specific to the Electrical Work category include proof of general knowledge of electrical work, as well as the completion of a 60-hour course in electrical work.
Maintaining and Renewing a Class C Contractor License
A Class C Contractor License must be renewed every two years. While there is no continuing education requirement specifically attached to the renewal of a Class C license, the Board does keep an eye on the licensees within their jurisdiction, and require compliance with the Virginia Uniform Statewide Building Code and with the Code of Virginia. Complaints filed by customers or contractors make up a significant portion of these inspections and failure to comply with the Code can lead to criminal charges. In addition, any serious or continuing Code violations found in the inspection of work done by an unlicensed subcontractor, can lead to the revocation or suspension of the Class C license of the General Contractor for allowing it to happen under his doing business name . A Class C license can be renewed after a maximum lapse of one (1) year from the expiration date of the previous license. If more than one (1) year passes, since making application to renew, the license is expired, and must be applied for anew. At the end of one (1) year, if the contractor fails to renew, the Board sends a letter to the last known address of the licensee on file with the Board stating that if the license is not renewed within sixty (60) days from the date of that letter, the license will be revoked. It should be noted that this letter is simply a courtesy letter sent to the licensee, and the license becomes expired regardless of whether the licensee receives the letter, and the license will continue to be expired for the remaining one year of the total two-year licensing period.
Legal and Regulatory Compliance Obligations
Virginia law requires Class C contractors to comply with several legal and compliance obligations. For instance, they must be bonded and insured in order to provide a level of assurance to their clients that unfinished work will be completed or that any damages that befall their clients as a result of their work will be compensated for.
Class C contractors currently must file a $20,000.00 surety bond and $300.00 license fee with the Board for Licensing Contractors. In addition, they must also carry two types of insurance: a general liability insurance policy worth $50,000.00 for customers and other affected parties in the event of damage to their property, and a worker’s compensation insurance policy worth $100,000.00 for the protection of workers under their employ.
Beyond adherence to accounting laws and designated tax regulations, Class C contractors are not required to meet many of the compliance requirements that apply to a Class A or B contractor. However, they are also unable to perform all of the tasks that Class A and B contractors are allowed to do, so the restrictions make sense.
The Advantages of Holding a Class C Contractor License
In Virginia, a Class C Contractor License opens doors for individuals and businesses to take on residential work valued below $10,000 per job and averaging no more than $150,000 for all projects over a 12-month period. This allows for specialization in tasks such as roofing, drywall, and electrical work, without the need for a Broad or Specialty license. It offers a pathway for starting a construction business or maintaining a smaller operation within the limits of their capabilities.
Holding a Class C Contractor License also provides an important level of credibility in the industry. It shows clients and business partners that the individual or business has passed the state’s education and experience requirements for licensing. It is an investment in professional development that demonstrates a commitment to quality and legal compliance.
Moreover, a Class C Contractor License shields the individual or business from legal repercussions that can result from contracting or subcontracting with unlicensed contractors. Virginia law requires contractors to be licensed, or to work under a licensed company, to pursue more than $1,000 in work for residential properties. A violation can lead to civil penalties of up to $2,500.
While a Class C Contractor License does not provide the same level of flexibility as a Broad or Specialty license, it does provide freedom to participate in the industry without the considerable investment that comes with those licenses. For those considering whether to pursue a Class C License, the benefits are clear.
Challenges You May Encounter – and How to Solve Them
One common challenge for both applicants and holders of a Class C Contractor License in Virginia relates to the business continuation requirements. Both an individual and a corporation can own a Class C license. Individual ownership requires that the individual maintain a minimum net worth of at least $45,000. In addition, by way of audit, the Tax Department requires this balance to be held in a savings account. Another common issue applicants will face is a criminal conviction or a business tax lien that requires remediation with respect to the Virginia State Licensure Board. This means the applicant must develop a plan to provide a fairly extensive background investigation that shows the net worth sufficient to cover the business tax lien and possibly some form of restitution for a criminal charge . There are additional types of remediation that need to be done depending on the criminal charge. An attorney can help you navigate these issues more quickly and avoid a formal hearing before the Board. A final hurdle that might be faced is the application itself. For instance, the Commonwealth cannot currently process fingerprints. In addition, applications take longer than they use to for processing and applicants must have their credit checked (which used to be voluntary). This creates a slowing of the process and an unnecessary expense. Every case has its own set of challenges. That is why a qualified licensing attorney is such a valuable resource. Having several cases under our belt, we can look forward to and prepare for many common challenges. At the same time, less common challenges arise from out of nowhere and we are ready to react quickly to these as well.