Virginia Contractor Virginia Portion (Rules and Regulations)

Key Concepts

License Classes (A, B, C) and Contract Thresholds - Class C: Contracts up to $10,000 per project; no single contract exceeds $150,000 annually - Class B: Contracts between $10,000 and $120,000 per project; annual volume between $150,000 and $750,000 - Class A: Contracts $120,000 or more per project; no cap on annual volume - A contractor may only perform work within their licensed class limits

License Structure — Two Parts Every Virginia contractor license has two components: 1. Class — governs contract size/dollar limits 2. Classification or Specialty — governs the type of work permitted (e.g., building contractor, electrical, plumbing, HVAC, highway/heavy)

Designated Employee Requirement - Every licensed contractor entity must have a designated employee (DE) who passes the required exam - The DE must be a bona fide employee, officer, or partner of the firm - If the DE leaves, the contractor must notify DPOR and obtain a new DE within 90 days or the license may be suspended

Financial Responsibility Requirements - Class A: Minimum net worth of $45,000 OR surety bond/insurance of $45,000 - Class B: Minimum net worth of $15,000 OR surety bond/insurance of $15,000 - Class C: Minimum net worth of $2,500 OR surety bond/insurance of $2,500

Study Brief | 5 Questions | 21% of Exam

Key Concepts

License Classifications & Scope (18VAC50-22-20)

Class A – Unlimited contract value; no single-project or annual gross cap. Requires the highest financial net worth and experience standards.

Class B – Single contract limit: $120,000; annual gross revenue limit: $750,000.

Class C – Single contract limit: $10,000; annual gross revenue limit: $150,000. Most restrictive class.

Commercial Building Contractor (CBC) – May work on commercial, industrial, institutional, governmental, residential multi-family, and accessory structures. Does NOT cover electrical, plumbing, HVAC, or gas fitting, and does NOT allow construction/repair of single-family dwellings or townhouses as defined by the USBC. Can act as prime contractor and subcontract work outside the CBC scope.

Electrical (ELE) – Construction, repair, maintenance, alteration, or removal of electrical systems.

Qualifier / Designated Employee Requirements

Every licensed firm must have a qualified individual (qualifier) who meets experience and exam requirements for that license class. The qualifier must be: - A full-time employee (minimum 30 hours/week carrying out contracting business work), or - A sole proprietor, officer, partner, or manager of the firm

A qualifier cannot simultaneously qualify more than one firm unless they hold a controlling financial interest (>50% ownership) in each firm.

Specialty Contractor Designations

Specialty designations are required when a contractor performs work outside the general scope of their primary classification. A CBC that performs specialty services (e.g., roofing, masonry, swimming pool) must obtain the appropriate specialty designation for each. Specialty contractors are limited to their designated trade.

Prohibited Acts & Standards of Conduct

(21% of exam — approximately 5 questions)

Key Concepts

Uniform Statewide Building Code (USBC) Compliance Virginia's USBC establishes minimum construction standards statewide. Licensed contractors must comply with the USBC on all projects. Exempted persons (see below) are not entirely off the hook — specific exemptions carry their own compliance obligations.

Exempt Persons Who Still Need a Certificate of Occupancy Three specific exemptions require a Certificate of Occupancy (CO) before conveying property to a third-party purchaser: 1. Owner-developers who use a licensed contractor and make the third-party purchaser a beneficiary of that contract 2. Students/schools constructing portable classrooms or single-family homes as part of a career and technical education project 3. Residential landlords performing repairs/improvements on units subject to the Virginia Residential Landlord and Tenant Act (§ 55-248.2 et seq.)

Exception to the CO requirement: A third-party purchaser may waive the CO requirement, but only if they acknowledge in writing that no CO has been issued and consent in writing to acquire the property without one.

Building Permits and Inspections as Prerequisites Contractors must obtain required building permits and pass required inspections before proceeding with covered work. Performing work without a required permit or failing required inspections can constitute a violation subject to disciplinary action by the Board for Contractors.

Building Code Violations as Evidence in Disciplinary Proceedings Code violations are admissible as evidence in contractor disciplinary proceedings before the Virginia Board for Contractors. A pattern of code violations can support findings of incompetence or improper workmanship, leading to penalties including fines and license revocation.

Key Concepts

Purpose: The Transaction Recovery Fund protects consumers (claimants) who suffer financial harm due to improper or dishonest conduct by a licensed Virginia contractor (regulant). It is administered by the Virginia Board for Contractors through DPOR.

Who Can File a Claim (Eligibility): - The claimant must have contracted with a licensed Virginia contractor - The claimant must have suffered an actual, out-of-pocket loss resulting from improper or dishonest conduct - The claimant must have obtained a judgment in a court of competent jurisdiction against the regulant - All other collection remedies must have been exhausted before the Fund will pay - Claims must be filed within 12 months of the final judgment becoming unsatisfied

Qualifying Conduct ("Improper or Dishonest Conduct") includes: - Fraud, misrepresentation, or deceit - Conversion of funds (e.g., taking a deposit and failing to perform) - Wrongful failure to complete a project - Note: Poor workmanship alone (without fraud/dishonesty) does not automatically qualify

Maximum Recovery Limits: - Per claimant: $20,000 per transaction - Per regulant (per license period/biennium): $40,000 aggregate cap — once a regulant's $40,000 limit is reached, no further claims are paid against that license until the next biennium

Assessment Fees & Minimum Fund Balance: - Contractors pay a Fund assessment at the time of initial licensure and renewal - If the Fund balance drops below $400,000, the Board is authorized to levy additional assessments on regulants to replenish it - The Board monitors Fund balance and triggers collection when the minimum threshold is not maintained

Key Concepts

Authority & Administration (§ 62.1-44.15:54) - Any locality that has not established a Virginia Erosion and Stormwater Management Program (VESMP) must administer a Virginia Erosion and Sediment Control Program (VESCP). - A town may enter into an agreement with a county to administer the town's VESCP. - VESCP authorities may contract with soil and water conservation districts, adjacent localities, or public/private entities to assist with plan review, monitoring, inspections, and enforcement. - A VESCP adopted by a county, city, or town must be approved by the Board if it establishes requirements consistent with the article and associated regulations. - The Board conducts compliance reviews of VESCPs and may require localities to furnish information as needed.

Fee Authority & Public Hearing (§ 62.1-44.15:54) - VESCP authorities may charge applicants a reasonable fee to defray program administration costs. - A public hearing is required before establishing a fee schedule. - Fees shall not exceed an amount commensurate with services rendered, considering time, skill, and expense involved.

Civil Penalties (§ 62.1-44.15:54) - Localities may adopt ordinances imposing civil penalties for violations. - Per violation: minimum $100, maximum $1,000. - Each day of violation = a separate offense. - A series of violations from the same operative set of facts: cap of $10,000 total. - Violations from commencing land-disturbing activity without an approved plan: also capped at $10,000 total. - These penalties are also available to the Board in enforcement actions.