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How To Become a Building Contractor in New Mexico

Contractor Tips , Posted by Charlotte Smith on

How To Become a Building Contractor in New Mexico

There's been a massive rise in new buildings in 2022, as we begin to shake off the effects of the pandemic. The U.S. Census Bureau reported a healthy 1,517,000 new building permits in August 2022 alone. That's on-par with rates before the pandemic. 

The trend doesn't show any signs of slowing, either. There's been a massive surge in home improvement projects since 2020. Analysts predict that trend will continue well into 2023. 

Considering the massive surge in demand, it's little surprise that there's been such a rise in those looking to become a building contractor. Many look to become building contractors due to the appeal of freedom and independence that few other industries afford.

If you're thinking of becoming a New Mexico building contractor, here are the steps you can follow to fulfill the contractor requirements as mandated by the state.

Steps to Becoming a Building Contractor in New Mexico

The first step in becoming a building contractor in New Mexico is to contact the New Mexico Regulation & Licensing Department. You will need to seek out the Construction Industries and Manufacturing Housing Division specifically.

Failing to apply to become a contractor in New Mexico can result in heavy fines. Construction projects can be terminated if undertaken by an unlicensed professional, too. It can even result in criminal charges in some circumstances.

Potential New Mexico contractors need to submit a classification determination request to the appropriate certification body. Then they'll need to get a Qualifying Party certificate proving they have either two or four years of experience. They'll also need to sign and submit a generalized work affidavit that's been signed by a notary.

All of this needs to be submitted to the appropriate certification body along with the necessary application fees. Proof of CID contractor license code bond is needed at this stage in the application process, as well.

Who Needs a New Mexico Contractor's License?

According to New Mexico law, anyone engaging in construction-related contracting needs to have a contractor's license. This includes general construction contracting.

Construction professionals doing electrical work or plumbing need a contractor's license, as well.

You can find a complete list of activities considered contracting in the Construction Industries Licensing Act. Section 60-13-3 lists the specifics.

What's Needed to Become a New Mexico Contractor?

Becoming a New Mexico contractor involves filling out numerous forms and applications. These then need to be submitted to the  Construction Industries and Manufactured Housing Division (CID) and the PSI.

Here are the steps to follow to get your contractor's license in New Mexico.

Determine Your Classification

Start off by determining what classification you're applying for. Fill out the Classification Determination Request.

When you're done, mail it to:

PSI – New Mexico Construction Licensing Services

2820 Broadbent Pkwy NE, Suite E&F

Albuquerque, NM 87107

(877) 663-9267

You can also submit the classification determination request online.

Get Your Qualifying Party Certificate

Contractor licenses can only be issued to eligible employees. This means you need to obtain a Qualifying Party certificate by filling out the application.

After you've filled out the application, you'll need to submit your General Work Experience Affidavit. There are two levels of General Work Experience Affidavits. The first proves you have two years, or 4,000 hours of experience.

This level is for Residential Building and Building Specialties. Asphalt Bitumen and Concrete Construction classifications are also covered. So are Fixed Work and Mechanical Specialties.

Finally, Residential Wiring and Electrical Specialties both only require two years experience.

The other level is for four years experience. 8,000 hours is the hourly equivalent. 

Four years of experience qualifies a contractor for:

  • Electrical- Residential and Commercial (EE-98)
  • Electrical Distribution Systems (EL-1)
  • Mechanical (MM-98)
  • Plumbing (MM-1)
  • Natural Gas Fitting (MM-2)
  • HVAC (MM-3)
  • Process Piping (MM-4)
  • Fire Sprinklers (MS-12)
  • Dry Chemical Fire Protection (MS-14)
  • General Building (GB-98)
  • Asphalt Bitumen and Concrete Construction (GA98)
  • Fixed Works (GF-98) 

You'll need to submit an application of $30 along with your General Work Experience Affidavit. There's also a $6 fee per certificate.

Once your General Work Experience Affidavit is approved, you'll be given notification to schedule your QP exam with the PSI exam services.

After you've passed your exams, the last thing you'll need to do is to attach your certificate to the license you're issued within 12 months of passing your exams.

Obtain a Surety Bond

Most states require some form of surety bond in order for a contractor to practice in the state. New Mexico is no exception. Contractors are expected to have a minimum of $10,000 surety bond for eligibility as a New Mexico contractor.

Different areas often have different criteria for contractors, as well. Make sure you check with local registration boards where you're conducting business to ensure you're in compliance with local ordinances.

Obtain Insurance

Contractors with employees are also usually required to have worker's compensation insurance. The amount varies from city to city, though, so you'll need to check with local licensing boards for that as well.

Unlike many other states, New Mexico doesn't require contractors to have liability insurance on a statewide level. Liability insurance does protect contractors from various complaints that can befall a contractor. These include false insurance claims in order to avoid payment and protection against equipment failure.

If you do decide to get liability insurance, make sure to display your certificate of insurance properly.

Considering how expensive construction equipment is, it's in your best interest to strongly consider liability insurance if you're serious about making it as a contractor. Otherwise, one equipment failure could put you and your livelihood in jeopardy.

Apply for a CID License

After you've passed your PSI exam, you will need to apply for your CID license. Your CID license application needs to include an application fee of $36 as well as all applicable licensing fees.

You also have to include proof of your license bond and your tax registration certificate. 

A certificate from NMRPC is required, as well, if you have a corporation or LLC.

If you have a Limited Liability Partnership or Limited Partnership, you are required to submit a certificate from the Secretary of State as well.

Finally, a copy of your QP certificate or relevant test scores for the relevant certifications or the Business & Law exam scores are also required.

After all of these requirements are met, the CID will make a decision about your CID license.

Pay CID Licensing Fees

Different licenses and classifications have different fees. The Contractor Licensing Application Fee costs $30, for example. Each Contractor Certificate Application Fee costs $6, on the other hand.

Qualifying Party license applications cost $30. Qualifying Party certificates cost $6 each.

Finally, the License Fee costs $150. Classification licenses cost $300 each.

Take Exams 

If you're seeking to become a licensed contractor in New Mexico, you'll need to pass the pertinent PSI exams. First, you must pass the Business Law exam dictated for your Qualified Party. Then you'll need to pass the General Building exam as well.

Once you've passed the exams, you'll need to pay all the necessary exam fees to the PSI licensure department.

Complete a New Mexico Contractor’s License Application 

The next step of your New Mexico contractor application is to fill out the relevant paperwork. Start by submitting the completed Contractor Licensing Application form. Then include a copy of your Qualifying Party certificate.

You'll also have to include the transcripts showing a passing grade on a business or law course from a CID-approved school if you don't have a passing grade on a business or law exam.

Proof of fiscal responsibility is required along with your application. This usually takes the form of a surety bond issued to a name exactly matching the one on the application.

You're also required to submit a current tax ID number with an official stamp or registration number.

All application materials must include a self-addressed stamped envelope for the CID to mail back your license if you're accepted.

Finally, you'll need to pay all relevant fees by cash, personal check, money order, cashier's check, or accepted credit card.

Contractor Registration and Permitting Requirements

Different cities in New Mexico have different laws and regulations about zoning and permits. For example, Tucumcari has its own regulations around contractor's licenses independent of the state's regulations. 

You'll need to check with the local board where your contractor business is set up along with the state licensing organizations to ensure you're in compliance with local ordinances. 

Register With the Secretary of State

If you want to conduct business in New Mexico, your business must be registered with the Secretary of State. Then you'll need a CRS ID number.

Finally, you'll need to show proof that you possess worker compensation insurance.

Reasons to Become a New Mexico Contractor

There is nothing quite like being in charge of your own destiny. It's also endlessly rewarding to work with your hands to help build homes and commercial spaces where people's dreams will come true. 

Here are a few other great reasons to become a New Mexico contractor.

Freedom

No one likes being under someone else's thumb. The freedom and independence that comes with being a New Mexico contractor is one of its most enduring appeals. This is especially true in the modern world, where work is constantly invading our home life and free time. 

Working as a contractor means you get to decide what jobs you want to take and which ones you don't. You have the power to make your own decisions about which clients to work with, what kind of work you want to do, and set your own rates.

Portability

The experience you'll gain as a contractor in New Mexico can be practiced anywhere on Earth. You'll have to apply for additional licensing, of course, if you end up working outside of the state, but you could easily do construction and contracting work all over the Southwest, for example. Or the East Coast. 

You could even do contracting work in Asia or Central America, if you could figure out the regional requirements. 

That kind of freedom and portability offers a peace of mind you won't find in very many other trades or professions. 

Helping People

Being a contractor means you get to help people while helping yourself at the same exact time. You get a dependable, stable, lucrative career doing work you love. Your customers will get their dream home or business, to help them realize their life's goals and ambitions.

You won't believe how intensely rewarding and satisfying this is. You'll watch your customer's eyes light up as their dreams begin to come to life over the course of the project. You get to work closely with prospective homeowners regarding precise details to help them more fully enjoy their new lives in their brand-new home.

They'll be spending decades in their new home, hopefully. They'll raise their children there if they have any. It might even get passed down to their children's children. 

It's difficult to find that level of meaningful work in today's money-hungry corporate world. Employment that leaves a lasting legacy is one of the best feelings you can possibly imagine. Meaningful work that also earns quite a bit of money is living the dream indeed!

Real estate is never going to not be in demand. People will always need someplace to live. They'll always be moving in search of a better place to make their dreams come true. 

Becoming a building contractor in New Mexico lets you help them while giving you a stable and in-demand career at the same time. 

Are You Looking to Become a New Mexico Building Contractor?

You've come to the right place! It is our great passion to help construction workers and professionals obtain the knowledge and skills they need to advance their contracting careers. 

If you're ready to take the exams to become a building contractor in New Mexico, get started with one of our exam prep courses or reach out to a licensing specialist for a start-up consultation today!