Construction Law Blog

In a prior blog post, we identified the traditional steps to maintaining a contractor’s license. Here we identify several more nuanced issues that impact Virginia contractors.

1. Designated employees can serve two contractors. In Virginia, companies, not the individuals that take the contractor’s exam, hold the contractor’s license. Those individuals are called “designated employees.” They must be a full-time employee or member of the responsible management. While not expressly written in the Board’s regulations, the Board has confirmed that one person can serve as the designated employee for two separate companies. This can be particularly helpful when a company is acquiring a construction business – in that instance, the designated employee can aid the new company in obtaining its license, while helping the acquired company maintain the license through the acquisition.

2. Classifications matter. A Class A, B, or C license identifies the size of the Project on which contractors can work. The classification or specialty identifies the type of work a contractor can pursue. For example, a contractor with a commercial improvement classification (CIC) cannot construct a commercial building from the ground up like a commercial building contractor (CBC) can. A contractor who holds a CBC classification, however, cannot perform electrical work without a electrical service contracting (ESC) classification. The Board has authority to discipline or revoke a contractor who performs work outside of its classification or specialty.

3. Mechanic’s liens require licensure. The General Assembly now requires all mechanic’s lien claimants to identify their license number and issuance date, or state that a license is not required. (Typically contractor’s licenses are not required for material or equipment suppliers that do not provide construction labor). Contractors that do not provide accurate information will likely lose their liens.

4. Prohibited acts. Many breaches of private contract may also constitute cause for discipline by the Board of Contractors. Periodic review of the Board’s “prohibited acts,” (18 VAC 50-22-260) is a good reminder of actions that can cause the Board to intervene. Negligence, failing to keep contracts for five years, dishonored warranties, and inadequate supervision all constitute grounds for Board intervention.

5. Communicate with the Board. The Board requires written notice of change in ownership or corporate structure. The licensing section of the Board of Contractors is available by telephone to field questions. They have proven helpful in clarifying the regulations and contractors’ obligations.