Chapter I Licensure of Construction Professions and Occupations

• Library: SC Construction Law Desk Book (SCBar) (2022 Ed.)

Chapter I Licensure of Construction Professions and Occupations

R. Patrick Smith

The following construction-related professions and occupations are licensed subject to the jurisdiction of the South Carolina Department of Labor, Licensing and Regulations ("LLR"): General and Mechanical Contractors, Construction Managers, Residential Builders, Sanitarians, Plumbers, Architects, Engineers, Land Surveyors, Landscape Architects, Soil Classifiers, Geologists and Dealers in Burglar and Fire Alarms. Other construction-related occupations such as blasting and asbestos abatement are regulated by the South Carolina Department of Health and Environmental Control ("DHEC").

A. Contractors

1. The Contractor's Licensing Board

The South Carolina Contractor's Licensing Board ("Contractors' Board"), under the administration ofLLR, regulates Contractors and Construction Managers.¹ The Contractors' Board consists of nine members appointed by the Governor, seven of whom must be licensed contractors. Two members must be consumer members representing the public at large.² Members serve terms of five years.³

2. Definitions

A "contractor" is a general or mechanical contractor.⁴ "General construction" means "the installation, replacement, or repair of a building, structure, highway, sewer, grading, asphalt or concrete paving, or improvement of any kind to real property."⁵ "Mechanical construction" means "the installation, replacement, or repair of plumbing, heating, air conditioning, process piping, refrigeration, lightning protection equipment, or electrical components, fixtures, or devices of any kind, excluding burglar alarm work."⁶

3. "Qualifying Party" or "Certificate Holder"

The holder of a contractor's license can be an individual or a firm. Every license holder must designate a "primary qualifying party" as "the principal individual responsible for directing or reviewing work performed by the licensee in a particular license classification or subclassification."⁷ The individual "who has been issued a certificate to qualify an entity for a license by way of examination in a license classification or subclassification" is the "qualifying party."⁸ The "qualifying party" is also called the "certificate holder."⁹

4. "Total Cost of Construction" and Licensure Requirements

No entity or individual may practice as a contractor by performing or offering to perform general or mechanical contracting work for which the "total cost of construction" is greater than $5,000 without a license.¹⁰ The "total cost of construction" means the "actual cost incurred by the owner, all contractors, subcontractors, and other parties for labor, material, equipment, profit, and incidental expenses for the entire project," excluding the cost of design services, unless the cost of design services is included in a construction contract.¹¹

5. Exemptions

Work on projects for which the total cost of construction is less than $5,000 is generally exempt from South Carolina's contractor licensing law.¹² In addition, S.C. Code Ann. § 40-11-360 specifically exempts certain activities from contractor licensing requirements. These exemptions include:

(1) The installation of fire sprinkler systems if the entity is licensed under Chapter 45 of Title 23, or burglar and fire alarm systems if the entity is licensed under Chapter 79 of Title 40;

(2) The installation of finished products, materials, or articles of merchandise that are not fabricated into and do not become a permanent fixed part of the structure;

(3) Construction, alteration, improvement, or repair carried on within the limits of a site, the title to which is in the name United States of America or with respect to which federal law supersedes this chapter;

(4) Contractors performing construction work for the South Carolina Department of Transportation pursuant to that department's prequalification requirements with the exception of public/private partnerships performing work pursuant to S. C. Code Ann. § 57-3-200;

(5) An owner of residential property who improves the property or who builds or improves structures or appurtenances on the property if he does the work himself, with his own employees, or with licensed contractors; provided that the structure, group of structures, or appurtenances, including the improvements, are intended for the owner's sole occupancy or occupancy by the owner's family and are not intended for sale or rent, and provided further, that the general public does not have access to this structure.

(6) An owner of nonowner-occupied property who improves the property or who builds or improves structures of less than five thousand square feet or other appurtenances on the property, either by himself or with the owner's employees, if all structural and mechanical work is performed by licensed contractors regardless of the cost of construction and if the property is not sold for two years after completion of the improvements.

(7) An owner constructing a farm building or portable storage building with less than five thousand square feet of floor space and used only for livestock or storage;
(8) Public owners performing all or a portion of any work on a project themselves as long as the work performed falls within the limitations of a License Group 3 General Contractor or a License Group 4 Mechanical Contractor, as adjusted by an inflation factor reflecting the Department of Labor's Consumer Price Index.

(9) Renovations and maintenance projects of the South Carolina Department of Corrections whereby all labor is supplied from that department's own labor forces;

(10) The South Carolina Public Service Authority when performing maintenance and renovations to existing facilities and when performing work in accordance with S.C. Code Ann. § 40-11-410(4)(n).

(11) The installation, repair, or maintenance of signs of billboards; provided, however, an electrical license is required to perform a final connection to a branch circuit conductor. The installation or modification of a branch circuit conductor is not considered a part of the installation, repair, or maintenance of a sign or billboard.

(New subsection 11 amended effective June 3, 2016).

6. Examination Requirement

The following contractor classifications require passing a technical examination:

1. building:

(a) building contractors examination, license groups one, two, and three;

(b) general contractors examination, license groups four and five;

2. bridges;

3. grading;

4. asphalt paving;

5. concrete paving;

6. concrete;

7. marine;

8. pre-engineered metal buildings;

9. public utility electrical;

10. structural framing;

11. general roofing;

12. specialty roofing;

13. swimming pools;

14. wood frame structures;

15. pipe lines;

16. water and sewer lines;

17. water and sewer plants;

18. packaged equipment;

19. air conditioning;

20. electrical;

21. heating;

22. lightning protection systems;

23. plumbing;

24. pressure and process piping;

25. refrigeration;

26. boilers;

27. such other classifications as the Contractors' Board may designate.¹³

7. Licensure and Standing to Sue

It is unlawful to use the term "licensed" unless the entity or individual using the term "licensed" is licensed. The name of the business, whether personal or of an entity, must be the name on the license.¹⁴ An entity which does not have a valid license as required may not bring an action either at law or in equity to enforce the provisions of a contract.¹⁵ Such an entity may not enforce a mechanic's lien.¹⁶

8. Use of an Unlicensed Subcontractor

A licensed contractor may utilize the services of unlicensed subcontractors to perform work within the limitations of the licensee's license group and license classification or subclassification, provided, the licensee provides supervision. The licensee is fully responsible for any violations resulting from the actions of unlicensed subcontractors performing work for the licensee.¹⁷

9. Licensure Standards and Basis for Refusal of License

The Contractors' Board may refuse to issue a license or certificate to an applicant who:

1. Has failed to meet the minimum qualifications [as required by the licensing statute and regulations promulgated thereunder];

2. Has had a license or certificate denied, suspended, revoked, or otherwise been disciplined;

3. Has engaged in contracting without a valid license as required by law;

4. Has submitted a bid without a valid license when one is required by law;

5. Has committed an act which would be grounds for disciplinary action under this chapter;

6. Has submitted false or misleading information;

7. Has engaged in conduct which demonstrates bad faith, dishonesty, untrustworthiness, or incompetence in business or the profession;

8. Has aided or abetted an entity in the violation of a provision of this chapter or a regulation promulgated under this chapter;

9. Has been convicted in a court of competent jurisdiction of this or any other state, district, or territory of the United States, or of a foreign country of the offense of forgery, embezzlement, obtaining money under false pretenses, theft, extortion, or conspiracy to defraud or other like offense, has been convicted of a felony or a crime involving moral turpitude, or pled nolo contendere to any such offense;

10. Has an outstanding monetary judgment related to construction.¹⁸

10. Grounds for Discipline or Revocation

LLR is authorized to investigate complaints and violations of the contractor licensing laws.¹⁹ LLR may refer reports of violations to the Contractors' Board, or LLR may directly issue administrative citations, cease and desist orders, and administrative fines of up to $500 for a first violation.²⁰ The Contractors' Board may take disciplinary action if it finds one of twenty-three conditions²¹ enumerated at S.C. Code Ann. § 40-11-110. It may also issue a public reprimand, impose a fine not to exceed $500, place a licensee on probation, restrict or suspend a license, or permanently revoke the license.²²

11. Qualifications: Technical...