North Carolina Business and Law Exam (General Contractors)

North Carolina Business and Law Exam (General Contractors)

Key Concepts

Plan filing and approval - No person shall initiate land-disturbing activity disturbing more than one acre on a tract unless, 30 or more days prior to initiating the activity, an erosion and sedimentation control plan is filed with and approved by the agency having jurisdiction (G.S. 113A-57(4)). A plan may be filed less than 30 days prior under an approved express permit program. - Persons conducting land-disturbing activity on a tract that covers one or more acres file the plan with the local government having jurisdiction, or with the Commission if no local government has jurisdiction. The approving authority shall act within 30 days of receipt or the plan is deemed approved. A paper copy of the approved plan shall be kept on file at the job site (15A NCAC 04B .0118(a)). - A plan shall be disapproved unless the application includes an authorized statement of financial responsibility and documentation of property ownership (15A NCAC 04B .0118(c)). - If no land-disturbing activity has been undertaken, a plan expires three years after approval (15A NCAC 04B .0129). - Before construction begins, the certificate of plan approval must be posted at the primary entrance or other location observable to the public and inspectors; no person may initiate land-disturbing activity until notifying the approving authority of the start date (15A NCAC 04B .0127).

Key Concepts

Scope of licensure. General contractors are persons, firms or corporations entering construction contracts of $40,000 or more; a license must be obtained before bidding, contracting, or agreeing to superintend (Chapter 3). Exemptions: owner building a residence on own land occupied solely by owner and family — if not occupied solely by owner/family for 12 months following completion, it is presumed the owner did not intend it solely for personal occupancy (G.S. 87-1(b)(2)); a farmer building on own farmland for own use after completion, with no dollar threshold (G.S. 87-1(b)(3)).

Classifications (21 NCAC 12A .0202). Building, Residential, Highway, Public Utilities, Specialty, and Unclassified, which includes all others (.0202(b)). Residential also covers solar panel installation on units conforming to the Residential Building Code (.0202(a)(2)). Highway covers airport runway/taxiway/apron paving and grading including fencing, signage, runway lighting and marking (.0202(a)(3)). Building covers S(Concrete Construction), S(Insulation), S(Interior Construction), S(Marine and Freshwater Construction), S(Masonry Construction), S(Roofing), S(Metal Erection), S(Swimming Pools), S(Asbestos), S(Wind Turbine) — not S(Boring and Tunneling) (.0202(a)(1)). S(Concrete Construction) excludes bridges, streets, sidewalks, curbs, gutters, driveways, parking lots and highways (.0202(a)(5)(D)). S(Asbestos) is required only when asbestos activities cost $30,000 or more (.0202(a)(5)(Q)). S(Wind Turbine) covers wind turbines, generators and power units (.0202(a)(5)(R)). PU(Electrical–Ahead of Point of Delivery) includes construction of solar arrays (.0202(a)(5)(E)); PU subclassifications include natural gas and other petroleum products distribution facilities (G.S. 87-10(b)(3)(e)).

Exam weight: 3 questions, 8% of the North Carolina Business and Law Exam (General Contractors) Primary source: NASCLA Contractors Guide, Appendix L, Pages L-1 through L-2

Key Concepts

Statutory definitions — NCGS 22C-1 (Appendix L, Page L-1)

• "Contractor" means a person who contracts with an owner to improve real property.
• "Improve" means to build, effect, alter, repair, or demolish any improvement upon, connected with, or on or beneath the surface of any real property, or to excavate, clear, grade, fill or landscape any real property, or to construct driveways and private roadways, or to furnish materials, including trees and shrubbery, for any of such purposes, or to perform any labor upon such improvements. It also includes design or other professional or skilled services furnished by architects, engineers, land surveyors and landscape architects registered under Chapters 83A, 89C or 89A of the General Statutes.
• "Improvement" means all or any part of any building, structure, erection, alteration, demolition, excavation, clearing, grading, filling, or landscaping, including trees and shrubbery, driveways, and private roadways, on real property.
• "Owner" is a person who has an interest in the real property improved and for whom an improvement is made and who ordered the improvement to be made; includes successors in interest and agents of the owner acting within their authority.
• "Real property" means the real estate that is improved, including lands, leaseholds, tenements and hereditaments, and improvements placed thereon.
• "Subcontractor" means any person who has contracted to furnish labor or materials to, or has performed labor for, a contractor or another subcontractor in connection with a contract to improve real property.

Key Concepts

Lien rights by tier. A person who contracts directly with the owner to improve real property may file a claim of lien on the real property (§44A-8). A first-tier subcontractor has lien rights against money owed to the contractor by the owner; a second-tier has lien rights against money owed to the first-tier by the general contractor; a third-tier against money owed to the second-tier by the first-tier (Chapter 16; §44A-18). A third-tier subcontractor is also subrogated to the lien upon funds of the second-tier and of the first-tier, to the extent the second-tier is entitled to subrogation (§44A-18(c), Appendix M p. M-13). Subcontractors more remote than the third tier have a lien only upon funds owed by the person with whom they dealt and are not entitled to subrogation (§44A-18(4)).

Lien agent system. For improvements costing $40,000 or more, the owner shall designate a lien agent no later than the time the owner first contracts with any person to improve the property (§44A-11.1(a)). No lien agent is required for improvements to an existing single-family residential dwelling occupied by the owner as a residence, or for an accessory building/structure incidental to that residence (§44A-11.1(a), p. M-3). A lien agent must be chosen from the list of registered lien agents maintained by the Department of Insurance (§44A-11.1(b)). If the lien agent resigns or becomes unable/unwilling to serve, the owner must designate a successor within three business days (§44A-11.1(d)).

Key Concepts

• Notice window. Notice for excavation/demolition not involving a subaqueous facility must be given within three to 12 full working days before the proposed commencement date; near a subaqueous facility, 10 to 20 full working days (G.S. 87-122(a); Chapter 3, Excavator Responsibilities, p. 5; Chapter 10).
• Operator response time. Member facility operators have 3 full working days, starting the day after the notice is received, to mark facilities and to provide status to the Positive Response System (Chapter 6 — Member Facility Operator Responsibilities, p. 16; Date & Time Calculations, p. 28). Subaqueous locates allow 10 full working days (p. 28).
• "Working Day" means every date except Saturday, Sunday, National legal holidays and State legal holidays (Notifications — Work Date & Time, p. 23).
• Life of a ticket. Tickets are good for 15 working days, starting the day after notice is given; update by the 12th full working day to allow the new 3 full working day notice and keep continuous coverage (Chapter 7 — Notice Expiration; G.S. 87-122(a)). Flags/markings are good for 15 full working days (FAQ, p. 33–34).
• Notification types (Chapter 8): Normal (3 full working day notice); Retransmit — resend an active ticket to originally notified members, add members, directions or contact numbers, or state lines were marked incorrectly (a newly added member gets 3 full working days); Update — when work continues past the 15 full working days, no changes permitted; Destroyed Marks — marks destroyed by weather, grading, heavy traffic, etc., while the original notice is still active; Design/Survey — members have 10 full working days; Three Hour — when an operator fails to respond and there are…