Construction Licensing Compliance Guide
Mechanical Contractor Company Licensing
About Company Licensing
Most states require mechanical contractor companies to obtain a license before providing HVAC/R (Heating, ventilation, air conditioning, and refrigeration) services. A contractor license generally allows the licensee to hire licensed technicians, bid on projects, and apply for the necessary permits for projects.
In addition to HVAC/R specific licenses, several states require mechanical contractors to obtain a generic contractor license. Mechanical contractors in Iowa, for example, are required to obtain a mechanical contractor license from the Department of Public Health and must complete a construction contractor registration through the Division of Labor.
Mechanical contractor licenses are typically issued to individual technicians, although some states issue these licenses to business entities. In cases where only individuals are licensed as contractors, businesses should ensure that an employee of the business obtains and maintains the requisite licenses for practice. Some states also require that individually licensed contractors be an officer of the business that their license covers.
In addition to licensing, companies should register with the secretary of state before conducting business in a state. New business entities will file incorporation or formation documents, while firms doing business outside of their home state will likely need to foreign qualify.
To start, mechanical contractor companies should choose an individually licensed employee to act as the designated license holder for the business. This individual will obtain the contractor license on behalf of the company and be in responsible charge of the HVAC/R services the business provides in the licensing jurisdiction.
License application requirements vary by state, but contractors are often required to submit the following:
- Application fee
- Surety bond
- General liability insurance
- Licensed plumber information
- Business entity information
- Job experience
Many states require the qualifying individual to pass a contractor exam after the license application is approved. In these cases, the contractor license is issued after the qualifying individual passes the exam.
Businesses that take on HVAC/R projects in multiple states may need to obtain a license in each state where they have a project. Some states have reciprocal agreements to honor licenses issued in other states, but these agreements are not common.
In addition to state-issued licenses, some counties and cities issue their own mechanical contractor licenses. Firms with certain HVAC/R projects in Dallas, for instance, may need to obtain a city-issued registration in addition to the state-level mechanical contractor license.
Most cities and counties require businesses to obtain a permit before performing HVAC/R installations, alterations, replacements, or repairs within commercial or residential structures. Minor repairs, however, are typically exempt from permitting requirements.
Permit applications vary by locality, but many require information about the technician or mechanical contractor performing the work as well as a detailed list of the work to be performed. Permits must be approved by the governing body before work can begin.
Mechanical contractor licenses typically need to be renewed on an annual basis. Licenses that are not renewed by the due date become inactive until the renewal is filed. Having an inactive license means that your firm may not be able to pull permits and could also limit the firm’s ability to expand to new states.
Licenses that are inactive for a significant time can be revoked entirely by the state, and contractors that perform work under an inactive or revoked license may be subject to penalties.
Businesses that do not follow state and local regulations while conducting mechanical contracting activities can be hit with steep penalties. Civil penalties vary by state and the circumstances of the violation, but they typically amount to thousands of dollars per violation. In Texas, for example, air conditioning and refrigeration contractors that perform unlicensed activities or fail to meet local ordinances can be fined up to $5,000 per day and may face suspension or revocation of their license.
Click on a link below to view licensing information in your state.
Associated General Contractors of America
Professional association providing advocacy and organization for construction firms and workers.
National Association of Home Builders
National association for the promotion of the housing industry.
National Association of State Contractors Licensing Agencies
National organization that represents and promotes the interests of state level contractor licensing agencies.