Big Changes Coming to North Carolina’s General Contracting Statutes!

By Attorney Edward Jesson

Recently, the North Carolina legislature passed House Bill 488, key sections of which will go into effect on October 1, 2023. While most of the changes made to this law relate to the energy efficiency rules found in the North Carolina Building Code, there is one big change for people in the construction industry.

North Carolina General Statute 87-1(a) governs who is required to obtain a North Carolina general contractor’s license prior to performing or bidding on work. The general rule was that any person or business that bid on or performed work which was valued at more than $30,000.00 was required to have a general contractor’s license prior to bidding on or performing that work (with a few exceptions).

However, House Bill 488 amends the language of N.C.G.S. § 87-1 to state the following:

[A]ny person or firm or corporation who for a fixed price, commission, fee, or wage, undertakes to bid upon or to construct or who undertakes to superintend or manage, on his own behalf or for any person, firm, or corporation that is not licensed as a general contractor pursuant to this Article, the construction of any building, highway, public utilities, grading or any improvement or structure where the cost of the undertaking is forty thousand dollars ($40,000) or more, or undertakes to erect a North Carolina labeled manufactured modular building meeting the North Carolina State Building Code, shall be deemed to be a "general contractor" engaged in the business of general contracting in the State of North Carolina.

The extra $10,000.00 will allow many people who are not licensed with the state to bid on projects that they would have not been legally permitted to bid on before this amendment. It is important to note that the new law only applies to projects or contracts that are entered into after October 1, 2023—the new law does not apply retroactively.

It is also important to note that whether you need a license to perform a certain item of work has no bearing on whether that work needs to be permitted or inspected by the relevant County. This change in the law does not mean that work which would require a building permit no longer requires that permit.

This is a big change in the law that will likely have an effect on the building industry in North Carolina as a whole—especially on those projects ranging from $30,000 to $40,000 where there will probably be much more competition.

If you need assistance with licensure, or other legal issues in the construction industry, don’t hesitate to reach out to the attorneys at Jesson & Rains.