What is residential building contractor (RBC) licensing?
- A building contractor or remodeler license is required for anyone who contracts directly with a homeowner to provide building construction services in more than one skill area.
- The goal of licensing is to ensure a higher level of professionalism and consumer protection.
- Homeowners who do not hire a licensed contractor have no protections.
- State licensing of residential building contractors began in 1992.
Who needs an RBC license?
- Any individual or company that contracts directly with an owner of "residential real estate" to provide work in more than one special skill.
- An owner of residential real estate who builds or improves homes for resale or speculation.
"Residential real estate" means a new or existing building constructed for habitation by one to four families and includes detached garages.
What’s the difference between a residential building contractor license and a residential remodeler license?
A residential remodeler can only perform work on existing structures -- they cannot build new homes or detached garages. A residential building contractor can perform all of the work that a residential remodeler can plus they can build new structures.
Who does not need an RBC license?
- Subcontractors who do not contract with the homeowner, yet they must register with DLI through the Contractor Registration Program;
- Commercial contractors, yet they must register with DLI through the Contractor Registration Program;
- Employees of a licensed contractor;
- Contractors who work on residential buildings with more than four units;
- Material suppliers who do not install or attach the items they sell;
- Owners doing work on their own property (unless they are building or improving properties they own for purposes of resale or speculation);
- Architects or engineers doing work within the scope of their practice;
- Residential building contractors whose gross annual receipts* from their residential activities are less than $15,000 and have a Certificate of Exemption. "Gross annual receipts" are defined as the total amount derived from residential contracting or remodeling activities, regardless of where the activities are performed, and must not be reduced by cost of goods sold, expenses, losses or any other amount.
What is a "special skill" area?
A contractor who provides services in more than one special skill area must be licensed. Specialty contractors who provide only one "special skill" are not required to have a state license (except residential roofers). See the chart below for deails about special skill categories:
"Special skill" means one of the following eight categories
- site grading
- drain systems
- poured walls
- slabs and poured-in-place footings
- masonry walls
- masonry fireplaces
- masonry veneer
- water resistance and waterproofing
- rough carpentry
- finish carpentry
- doors, windows and skylights
- porches and decks (excluding concrete footings)
- wood foundations
- drywall installation (excluding taping and finishing)
4. Interior finishing
- floor covering
- wood floors
- cabinet and countertop installation
- insulation and vapor barriers
- interior or exterior painting
- ceramic, marble and quarry tile
- ornamental guardrail and installation of prefabricated stairs
5. Exterior finishing
- soffit, fascia and trim
- exterior plaster and stucco
- rain carrying systems, including gutters and down spouts
6. Drywall and plaster
- interior plaster
- roof coverings
- roof sheathing
- roof weatherproofing and insulation
- repair of roof support system, but not construction of new roof support system
Roofers are required to obtain a license. Contact the Department of Labor and Industry for further information.
8. General installation specialties
- garage doors and openers
- pools, spas and hot tubs
- fireplaces and wood stoves
- asphalt paving and seal coating
- exterior plaster and stucco
- ornamental guardrail and prefabricated stairs
How do I get licensed?
New license, certification and registration fees effective July 1, 2015 (PDF).
- If you operate as a business entity (corporation, LLC, etc.), your company must apply for the license.
- The company names one individual to act as its "qualifying person" (QP).
- The QP is responsible for taking the licensing exam and required continuing education.
- The QP must be an owner or officer of the company, or a managing W-2 employee.
- The QP cannot be a subcontractor.
- An individual may act as QP for more than one licensed contractor only if there is at least 25 percent common ownership among all of the licensed contractors.
- The QP does not have to be the individual who owns 25 percent of the companies.
- Once the QP has passed the exam, submit a fully completed license application packet including:
- All license application forms including required signatures.
- A current Secretary of State filing (if applicable).
- A current liability insurance certificate.
- Payment of the appropriate fee (includes Contractor Recovery Fund contribution):
Residential building contractor/remodeler two-year license fee structure
If gross receipts are:
less than $1 million
$1million to $5 million
more than $5 million
What kind of insurance do I need?
- All contractors must carry continuous commercial general liability insurance.
- The liability policy must include coverage for "completed operations."
- The liability policy must have these minimum limits:
- $100,000 for each occurrence
- $300,000 aggregate limit for bodily injury
- $25,000 for property damage
- The insurance company must be licensed to sell insurance in Minnesota.
- The liability insurance certificate can be on an approved CCLD form or a current ACORD form (your insurance agent can easily provide this).
- Workers’ compensation insurance is required unless you do not have employees or can claim another exemption from these insurance requirements. Note: Even if you don’t think you need workers’ compensation insurance, you might be at risk if you don’t get it. View this flier for more details.
How can I make sure my license application will be processed as quickly as possible?
- Fill out all application forms completely.
- Submit all of the required forms together.
- If you answer "yes" to any questions on the Background Disclosure Form, be sure to include a written explanation for your answer and provide required documents.
- Make sure your Secretary of State filing (for a corporation, LLC, etc.) is active.
- Make sure your business name is listed exactly as it appears on your Secretary of State filing on all forms, especially your liability insurance certificate.
- Include an email address so we can communicate with you quickly if there is a problem.
What happens after I get licensed?
- As soon as your license application is approved, your license information will be available on DLI’s online License Lookup tool.
- A license certificate will be printed and mailed to you in seven to 10 days.
- Your license number must be displayed on all:
- contracts and proposals
- company vehicles
- permit applications
- advertising including lawn signs, billboards, websites, business cards, newspaper ads, fliers, brochures, and other marketing materials.
What about continuing education?
- Each QP must take 14 hours of approved continuing education (CE) every two years.
- As a QP, your deadline for taking CE is tied to when you passed the exam, not when your company’s license expires.
- When you pass the licensing exam, you are assigned an identifying number beginning with the letter "Q."
- Your Q number is separate from your license number, and is used to track your CE.
- An updated list of all DLI-approved CE courses can always be found on our website.
- You do not need to send us your course completion certificates; instructors upload your course attendance information directly to DLI.
- When you attend a course, be sure to give the instructor your correct Q number.
When does my license expire?
- RBC licenses are on a two-year license cycle.
- RBC licenses always expire on March 31.
- If the license is issued any time after March 1 in an odd numbered year, it will expire on March 31 of the next odd numbered year -- same with even numbered years.
- License fees cannot be prorated.
Where are the laws that govern residential building contractors?