Getting your contractor license in New Jersey only consists of a few major steps, many of which are easy enough to understand.
However there are few that are newer requirements and this short post will help you understand these and each step.
We'll focus on the home improvement and the home elevation contractor licenses in this article. Both have nearly identical application processes.
The 5 Steps To Get Your New Jersey Home Improvement License And Home Elevation License
At a high level the steps include:
- Step 1 - Have your business and any alternate names registered
- Step 2 - Outline ownership and key personal history
- Step 3 - Secure the minimum liability insurance policy
- Step 4 - Provide your additional financial security
- Step 5 - Complete application and pay fees
Step 1 - Have Your Business Registered
You don't need to have a registered business, you can get licensed as a sole proprietor.
However, most contractors do register a legal business entity. And you need to make sure that your license is registered with the exact name on your business registration documents.
If you use a "doing business as" name or alternate business name you need to fill out Alternate Name Form C-150G. This Alternate Name Form is the form used to register alternate names for your business in the state.
Step 2 - Outline And Organize Business Ownership
You'll need to provide the legal name and contact information for any individual who owns at least a 10% stake in the business.
Beyond just listing the owners you must also provide:
- The owner who actively hold any professional or occupation license including the type of license they hold
- The owners who have a history of violations, dishonesty, fraud, or professional misconduct including the action taken against them
If you have any owners who have a negative history, this does not mean you'll have your application denied. You must include copies of all final court orders, judgements, and any agreements related to each issue.
This also includes outlining any crime or felony. And just like any acts of misconduct, you must include all court related documentation.
If ownership changes throughout the year, you must notify the Division of Consumer Affairs immediately with an updated owner list.
Step 3 - Obtain Contractor General Liability Insurance
The Division of Consumer Affairs requires all home improvement contractors and home elevation contractors to obtain a minimum level of general liability insurance.
If this is your first time getting liability insurance, it's purchased for your businesses protection but also for the home owners you'll work with.
In any incident of customer injury, property damage, or even legal costs the insurance policy will pay for these damages.
You may be required to purchase a workers compensation policy as well.
At a high level you're exempt from this requirement if you have no employees. However, check with your CPA about your business structure. Some corporation entities make you an employee of your own company.
In these rare cases you would still need to have a minimal workers compensation policy.
Step 4 - Provide Additional Security
This is one of the more confusing requirements, but once you understand what this additional security is for, you'll see it as just a cost of doing business.
You can provide additional security in one of three ways:
- A surety bond or compliance bond
- A letter or credit from a financial institution
- Providing securities or financial collateral
The amount of financial security is going to be based on your highest contractor values in the previous 12 months.
| Contract Value | Bond Amount | Get Your Pricing |
|---|---|---|
| Minimum | $10,000 | Click here to purchase for $100 |
| A contract valued between $10,000 and $120,000 or a sum of contracts between $150,000 and $750,000 | $25,000 | Click here to request a quote |
| A contract valued over $120,000 or a sum of contracts over $750,000 | $50,000 | Click here to request a quote |
This coverage or security is the penalty amount in the event of a contractor purposefully committing fraud against their customers.
These amounts are available to a harmed customer as financial compensation.
Most contractors purchase a surety bond because the price to purchase is a small fraction of the amount.
Prices for a surety bond range from $100 to $500 for the higher amounts. This is one yearly payment that must be renewed on your bond's effective date.
Learn the details of the New Jersey home improvement contractor surety bond and here are some other common bond questions:
Keep in mind this is a contractor license bond and that is different from a construction or performance bond.
Step 5 - Complete the Application And Pay Fees
Once you have all the above information, completing your application will be easy.
The application fee structure is as follows:
- $110 initial application fee
- $90 for application renewals
- $140 for reinstatement applications
The New Jersey Division of Consumer Affairs requires all contractors to renew their license before March 31st of each year.
If you choose to purchase a surety bond for your financial compliance, that needs to be renewed on the effective date you choose when you purchased your bond. This is separate from your contractor registration renewal.
If you purchase your surety bond with us, we manage this for you so you can forget about your bond. We'll contact you when it's time to renew.
When You're Ready To Purchase Your Surety Bond We're Ready To Help You
I hope this article gave you some insights to get through the New Jersey home improvement contractor and home elevation licensing process easier.
Like I mentioned above, most contractors choose to purchase a surety bond for the additional security requirement. It's easier and a lot less expensive compared to obtaining a letter or credit.
We are Surety Bonds Direct and it's our job to help get your home improvement compliance bond for the lowest possible price... and then manage your bond for you.
Click here and request a price quote. If you need the $10,000 bond, you can actually purchase that today.
Call a bond specialist at 1-800-608-9950 if you have any questions. You'll speak with a real human ready to help you get this done.
