By Attorney Edward Jesson
With the rise in popularity of “HGTV” and “DIY Network,” and with people looking to make additional income in the real estate market, we have seen a rise in the number of people wanting to “flip” their own homes. However, in North Carolina, there are important considerations when undertaking any construction project, especially when you are “flipping” a home.
Generally, under North Carolina law, a General Contractor is any person or corporation who bids on or contracts to perform construction work where the overall cost of the project is going to be greater than $30,000.00. If you want to perform work for another person, and the cost of that work is over $30,000.00, you’ll typically need a general contractor’s license. Importantly, for work totaling less than $30,000.00, you don’t need a license. This is why handyman services, etc. do not need to necessarily be licensed with the state.
However, there is an exception to the rule requiring a license for any work performed over $30,000.00—after all, YouTube tutorials are a thing! In North Carolina, you can act as your own General Contractor so long as you own the building or land at the time the work is being done and so long as the building is intended solely for occupancy by that person and his family. North Carolina presumes that if the property is sold within 12 months following completion of the work, the person did not intend the building to be solely for their occupancy.
What does this mean for budding HGTV stars? If the “flip” you are doing is going to cost more than $30,000.00 and you intend to sell the home once the home is complete, you need to get a general contractor’s license prior to beginning work or hire a general contractor to oversee the work instead of yourself.
It is important to note that you still need to pull the relevant permits, obtain the necessary inspections, and have work such as electrical, plumbing, and HVAC performed by properly licensed individuals, regardless of whether or not you need or have a General Contractor’s license.
Should you have any questions about the process or need additional help, please don’t hesitate to call Jesson & Rains today.
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Kelly Rains Jesson