Start a construction company in Georgia

Georgia draws its line lower than any other board state in this pilot and measures it from whichever side is larger. The State Licensing Board for Residential and General Contractors sets the trigger in its own warranty rule: a covered contract is a contract to construct, or to superintend or manage the construction of, a single family residence where the total value of the work, or the compensation the contractor receives for it, exceeds $2,500. North Carolina starts at $40,000 and California at $1,000 of labor and materials. Georgia takes the greater of two figures and starts at $2,500, which puts most of a working week inside the licensed zone.

The board runs two divisions and they ask for different things. A residential-basic applicant has to be at least 21, show two years of proven experience worked predominantly in that category, show significant responsibility for the successful completion of at least two projects in that category in the two years immediately before applying, and pass the division’s examination unless a statutory exemption applies. The insurance floor is $300,000 of general liability plus workers’ compensation as state law requires. A general contractor applicant meets one of three routes instead: a relevant four-year degree plus a year of experience, an acceptable mix of college credits and practical experience totalling four years, or four years of proven construction experience with at least two as or employed by a general contractor and at least one in administration, estimating, drafting, engineering, supervision or project management. That applicant also affirms a minimum net worth of $150,000 and carries at least $500,000 of general liability insurance.

The entity question gets its seventh answer here, and Georgia’s is the most closely tracked. The license belongs to the individual. A business organization contracts in its own name only through an individual who is affiliated with it by ownership or employment and acts as its qualifying agent. The insurance sits in that person’s name rather than the company’s, and their application has to list every person, entity and business organization they will be affiliated with, including each one they will qualify. The board then keeps that list current by rule: a change in the individual’s or qualifying agent’s legal name, address or location goes in within 30 days, a change in the business organization’s address within 45, and a change in the name or structure of the business organization has to be reported as well. Florida gives a company 60 days to find a new qualifying agent. Georgia is more interested in knowing, continuously, which companies each licensed person is standing behind.

One duty here has no equivalent anywhere else in this pilot. On every covered contract a licensed residential contractor has to offer a written warranty, and the rule says what it must contain: the covered work, the exclusions, the standards for evaluating the work, the term with its commencement date, the claim procedure, the contractor’s response options of repair, replacement or compensation, and any assignable manufacturer warranties. The standards are not left to the contractor either. They are the current Residential Construction Performance Guidelines published by the National Association of Home Builders. A complete copy of the warranty, or an identical blank form of it, is attached to the contract before it is signed.

Repair work sits outside the chapter, on conditions worth reading before relying on it. The board’s rule defines repair as fixing, mending, maintaining, replacing or restoring part of a property to good condition, and the exception holds only if the person doing the work discloses in writing to the owner that they are not licensed as a residential or general contractor, and does not hand supervision of the job to anyone outside their own employees. The rule also says plainly that the repair exception does nothing to the separate licensing chapter covering electrical, plumbing, conditioned air, low-voltage and utility contracting. Calling a job a repair does not make an electrician optional.

Renewal runs on the state’s calendar rather than yours. Licenses renew biennially, due by 30 June of even-numbered years, with continuing education attested on the renewal application and questions about the company’s insurance and financial state answered again each cycle. A penalty period runs from 1 July to 31 December. Missing 31 December has, in the board’s words, the same effect as a revocation, and getting the license back is at the board’s discretion, potentially as a fresh application with a fresh examination.

The counts on the plate above are the interesting part, because they point the opposite way to New York. Georgia carries roughly six solo operators for every construction firm with payroll, one of the highest ratios in this pilot, while New York carries the fewest and licenses the most heavily. Georgia licenses heavily too, from a $2,500 line that catches almost any real job. Whatever produces a market full of one-person firms, the licensing regime is not doing the work on its own, which is worth holding onto before reading a state’s contractor rules as a proxy for how hard it is to start there.