Understanding License Requirements for Residential Contractors in Florida

Contractor Licensing in Florida: An Overview

Many states require contractors to obtain a license and Florida is no exception. If you are looking to build a house in Florida or you are a developer and are looking to hire someone to build a home for you, you should be familiar with what a residential contractor is and how the Florida statutes define it. The Home Construction Recovery Fund and the Residential Contractors’ Trust Fund are just some of the regulatory requirements that need to be followed in Florida. The Department of Business and Professional Regulation oversees and regulates all types of building. According to the Department’s statistics in 2016, over 900,000 Florida licenses were issued for construction projects and there were over 868,000 active licensees .
In 2016 the State of Florida received over $460 million in licensing and registration fees pertaining to building and construction licenses. On top of licensure fees, builders and construction companies are also required to pay costs related to building disputes and the protect fund. Licensing fees can range greatly from less than $10 per annum to over $2,000 for companies that are building across various states. There is also a lower cost for people licensed to build in only one state and do not build across the United States. Depending on the local DBPR office that you apply to, the fees and license costs vary throughout the state.

Requirements for Obtaining a Residential Contractor License

In the State of Florida, to be a licensed Residential Contractor, Florida Statute Section 489.105 defines a residential contractor as:
A contractor whose services are limited to the construction, erection, alteration, and repair of buildings whose use or occupancy is primarily for one family, two family, or three family dwellings, and their accessory use structures as provided by the Florida Building Code.
Residential contractors are considered intermediate contractors for the purposes of licensing in Florida.
Florida Statute Section 489.107 sets forth the general requirements for a residential contractor license. In summary, applicants must:
The requirements above do not include the required experience, which will be discussed in the following section. In addition to the above requirements, applicants will also be subject to an investigation by the Department of Business and Professional Regulation. The purpose of this requirement is to determine whether or not the applicant meets the experience, financial, and moral qualifications to be licensed.
If the Department of Business and Professional Regulation completes its investigation and determines that the applicant is not of good moral character or does not have the required experience, then the State will deny that applicant’s application for licensure.

How to Apply for a Florida Contractor’s License

Successful candidates must submit their license application with the appropriate fees and documents. The Florida Department of Business and Professional Regulation requires contractors to submit their applications via the online licensing system, Online Services. Registration is free and allows access to other services, such as status updates on license renewals.
Every license applicant must provide the following documentation: Upon successful submission, candidates must pay a fee of $250 for a new application. If an application was submitted as an exam applicant, there is also a $50 application examination fee. All new licenses have annual fees of $249 for the first year. In addition to the general requirements listed above, applicants should check for individual requirements for their situation: The Florida licensing process can be long. Candidates who fail their first exam must wait a full year before they can reapply. It is important to study past exam questions and learn from mistakes to be more prepared.

Exam Requirements and Preparing for the Exams

Florida assesses qualifying individuals through an examination that is intended to evaluate technical knowledge and a nuanced understanding of regulations. In addition, the examination tests contract, payment, and lien law information specific to the construction industry.
The test consists of two parts: 1) a business optional general/topical portion related to construction, and 2) a trade/skill portion related to specialty in the construction field. As of July 1, 2015, qualified individuals may take the exams on a computer, rather than in the traditional paper-and-pencil format. The Department of Business and Professional Regulation maintains a list of approved vendors who will facilitate these examinations at convenient testing sites throughout the state. In addition to the full testing locations, in many counties e-testing is available at the SBDC ("small business development center"). This option allows individuals to test at any of the SBDCs in addition to the e-test centers. The computer-generated test provides immediate results. A passing score is 75% or higher for each portion of the examination, and the passing results are good for one year.
Given the significant investment required to become licensed, it is imperative to prepare and to avoid a fail. To this end , the State Licensed Contractor exam application (available on the DBPR website) requires a signed statement certifying attendance at a minimum 16 hours of classes designed to teach the contents of the exams. For this reason, and because of the breadth of subjects covered by the exams, most find it prudent to spend additional time preparing, such as with a review course. There are several review courses available online or through various non-profit business colleges, community colleges, or training centers. The vocational center at your local technical college or community college is also a good source for information on teacher-led classes.
Online classes are often more affordable than live classes, but learn what methods will be used to teach the content. A number of colleges have reinvented the home study class, which is less expensive but keeps students accountable by requiring mandatory participation in online chats. Many will also schedule additional, optional classroom time to review particularly important or difficult subjects.
These resources combine lecture with mock exams to familiarize the would-be contractor with the test questions. Some provide one-on-one instruction from an experienced professional who works as a state exam proctor. Others offer online preparation and practice exams as well. It is wise to take practice tests up to the day of the exam to ensure that memorization and retention are in peak condition and to continuously test your test-taking skills.

Maintaining and Renewing Your License

Once the applicant receives his or her residential contractor license, it is important to keep the license active. Failure to do so will result in the forfeiture of the license. All residential contractor licenses (both certified and registered) are issued for a two-year period of time. The License is renewed by application and payment of biennial fee, as determined by the Construction Industry Licensing Board directed by the Department of Business and Professional Regulation. Currently, for a certified contractor, the renewal fee is $250 and for a registered contractor, $125.
Another factor to keep in mind is the continuing education requirements. The applicant has a year from the time that he or she—either by direct licensure or taking the licensure examination—receives his or her license in order to complete the following continuing education requirements: In addition to the above requirements, each licensee is required to complete 14 hours of lower level continuing education approved by the Construction Industry Licensing Board, which includes two hours in Laws and Rules.
While it may be possible to renew the license without complying with the continuing education requirements, completion of said requirement is necessary in order to keep the license active.

Common Pitfalls and Tips for Contractors

While the above qualifications are the basic requirements for obtaining a Florida residential contractor license, individuals may face various challenges and difficulties in the process. One of the most common issues contractors face is that the Department of Business and Professional Regulation (DBPR) requires applicants to demonstrate that they are financially responsible and that they will be able to handle any financial trades required for their business. However, as most contractors have noticed, it can be extremely difficult for first-time applicants to demonstrate that they are financially responsible. If you are self-employed or a new business owner, this often means you will be financially responsible for your own business and, therefore, won’t be able to satisfy the financial responsibility requirement. Additionally, the DBPR rules and regulations are often changing and anyone looking to start their own contracting business should familiarize themselves with these rules and regulations so that they can better prepare for the licensing process. To get a clearer picture of DBPR rules and regulations , you should consult Chapter 489 of the Florida Statutes. In order to better prepare yourself for the licensing process, it is also essential to be aware of any changes that may affect you. For example, the DBPR has recently begun a new fingerprinting program to better encourage safety and criminal background checks for future contractors. The paperwork you may be required to fill out before you receive your license regarding this fingerprint program may have changed since the last time you checked the form, leaving you to be ill-prepared when you attend your application meeting. Finally, aspiring contractors should make sure they have acquired sufficient Disciplinary History before applying to ensure that their application will be approved. All efforts to prepare for each step of the licensing process should also include careful review of your disciplinary history. If you are an aspiring contractor with prior disciplinary history, you should familiarize yourself with the Disciplinary Guidelines set forth by the DBPR in order to prevent any unnecessary delays or rejections of your license application.