Category Archives: Licensure

New Rules & Regulations Applicable to North Carolina General Contractors

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Hi folks!  As the kids would say, “it’s been a minute.”  But I’m back on the blogging beat and eager to share new construction law content with you in the weeks and months ahead.

While perusing the Fall 2018 newsletter issued by the North Carolina Licensing Board for General Contractors during my lunch break this afternoon, I was reminded of certain regulatory changes approved by the N.C. Rules Commission that affect North Carolina general contractors.  Ten rule changes were put into effect on April 1 (no joke!), and two additional changes took effect on September 1.  Check out the third page of the newsletter I’ve linked for a quick summary.

The changes, among other things, establish 70 as a passing grade for the licensing exam, require that a licensee be in good standing with the Secretary of State’s office before a license is renewed, and limit the number of entities for which a person may serve as qualifier to two.  There are two additional changes that I’d like to highlight here:

First, the rules now clarify that if a joint venture doesn’t hold a general contracting license of its own, each member of the JV must be properly licensed to practice general contracting.  Since the consequences of performing construction work in North Carolina without a license can be severe, contractors bidding and contracting for work in a joint venture setting are encouraged to comply strictly with this regulation.

Second, the rules now provide that all general contractors must include their license numbers “on all contracts, advertisements, and licensee websites.”  Construed broadly, this regulation arguably requires GCs to display their license numbers everywhere–proposal, bids, PowerPoint presentations, prime contracts, subcontracts, purchase agreements, bonds, websites, social media pages, email signature blocks, brochures and other marketing collateral, letterhead, project signage, equipment, vehicles, business cards–you name it.  To minimize the risk of disciplinary action against your general contracting license, you would be well served to begin displaying your license number ubiquitously, and immediately.


Filed under Licensure, Uncategorized

You Just Signed A Construction Contract That’s In Excess of Your Limited General Contractor’s License; Can You Still Compel The Owner To Pay You?

Yes, but only up to a point.  Specifically, once the statutory limit of the license is reached, no additional contract balance above that limit may be recovered.

Our analysis begins with the N.C. General Statutes, specifically Chapter 87-10, which states, in pertinent part, that “the holder of a limited license shall be entitled to act as general contractor for any single project with a value of up to five hundred thousand dollars ($500,000)[.]”  We also need to bear in mind that in 1983, the North Carolina Supreme Court adopted the rule that “a contract illegally entered into by an unlicensed general construction contractor is unenforceable by the contractor.  It cannot be validated by the contractor’s subsequent procurement of a license.”  Brady v. Fulghum, 309 N.C. 580, 586, 308 S.E.2d 327, 331 (1983).

Based solely on the cited language of Chapter 87-10 and the general rule expressed in the Brady decision, it would be tempting to conclude that a contract entered into in excess of the statutory limit is illegal, void and therefore unenforceable in a court of law as of the moment the contract is signed.  Fortunately, however, that is not how subsequent appellate decisions have handled the situation.

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Filed under Licensure, NC case law