How to Get a Contractor’s License in New Jersey

 

Did you know that construction jobs account for 2.9% of all jobs nationally? In New Jersey, 3.8% of all wage and salary workers work in construction.

Each state saw a decline in the need for construction because of the pandemic, but things are now changing. New Jersey is in need of contractors, but the state requires businesses and individuals to register for their work.

Keep reading to learn how to get a New Jersey contractor license.

Who Needs a Contractor's License?

The "Contractors' Registration Act" requires contractors in New Jersey to register with the Division of Consumer Affairs.

Any contractor that sells or makes home improvements needs certification. Plumbers, electricians, and HVAC professionals are different when it comes to licensing.

Any business organizations that complete these tasks are considered contractors:

• Installation
• Construction
• Altering
• Remodeling
• Repairing
• Painting
• Restoring
• Renovating
• Moving
• Modernizing
• Demolishing

If someone fails to register with the Division of Consumer Affairs, they cannot make or sell the above home improvements. Plus, they are subject to civil and possible criminal penalties.

It's the law to register for a New Jersey contractor's license, but there are also benefits of receiving this certification, including:

• Makes you appear professional
• Gives you a stamp of approval from the state
• Gives you a competitive advantage over sketchy contractors
• Requires you to carry business insurance and general liability insurance

Simply put, registering for a contractor's license makes you official in the industry.

Contractor License vs. Contractor Registration

A contractor license and registration are terms used interchangeably, but they don't always refer to the same thing. In many states, you need to meet various requirements and pass an exam to get a contractor's license.

In New Jersey, this is not the case. You only need to register to become licensed as a contractor in the state.

Registration is simpler than getting licensed because there is less paperwork involved. Plus, you don't have to take exams and you pay fewer fees.

However, workers that perform electrical, HVAC, or plumbing work do need to register, apply for a license, and take an exam. More on this later.

How to Get a Contractor's License in New Jersey

There are various steps you'll need to take to become a registered and licensed general contractor. These are the basic steps to receiving a contractor's license in New Jersey:

• Submit an application and necessary documentation to the Division of Consumer Affairs
• Complete the Disclosure Statement on the application
• Submit a Licensing Application to the DOBI if you want to offer financing options
• File proof of general liability insurance (minimum amount of $500,000)
• Pay the $110 Division of Consumer Affairs application fee

New Jersey contractor licensing requirements aren't as strict as other states. Some states require proof of experience and education in addition to the above requirements.

New Jersey also doesn't have a statewide requirement stating that all contractors need to be bonded. Contractors that have specific classifications in more than one city should research local construction bond laws.

Plumbers in the entire state of New Jersey have to post a surety bond.

New Jersey Contractor's License Registration

You can find the New Jersey Home Improvement Contractor Application on the Division of Consumer Affairs website. To fill out the application, you'll need the following:

Business Name

The business name you put on your application must match the business name listed on corporate documents. List any names you use to do business.

Type of Business Entity

To get a contractor's license, you'll also need to indicate the type of business entity you have. This will be one of the following:

• LLC
• LLP
• Sole proprietorship
• Partnership
• Corporation

Attach documents like your Trade Name Certificate or Certificate of Incorporation/Formation. This certificate will depend on the business type.

Sole proprietors need to answer additional questions. The sole proprietor applicant must answer whether or not they:

• Are the subject of a child-support warrant
• Have failed to pay a child support obligation ordered by the court
• Have failed to pay any court-ordered health care coverage within the past six months
• Have failed to respond to child support or paternity subpoena

Sole proprietors also need to describe their immigration status in their applications.

If your corporation is out-of-state, you need to attach a copy of your business' New Jersey Certificate or Authority. Include formation documents from your home state as well.

Business Information

Business information is straightforward. Make sure you include this info in your application:

• Fax number
• Physical and mailing address
• Email address
• Telephone number

If your business is a corporation, include the name of each owner with an interest of 10% or more in the company. You'll also need to provide the name and address of the agent in New Jersey that is authorized to accept documents.

Address whether any principal, director, officer, or person with more than 10% ownership holds a professional license or registration with the state. If they do, provide information about the issuing agency and type of license.

Signed Disclosure Statement

The Signed Disclosure Statement involves criminal records. You'll answer whether you, any principal, director, officer, or person with more than 10% ownership has been convicted of a crime of the first degree.

Answer whether or not someone has been convicted of a second or third-degree crime that is a violation of chapter 20 or 21 of Title 2C of the New Jersey Statutes.

Any other crime violating N.J.S.A also needs to be disclosed. For example, these crimes are violations:

• Conspiracy
• Assault
• Criminal attempt
• Criminal homicide
• Kidnapping
• Terroristic threats
• Fraud
• Possession of a controlled substance

If any convictions have happened, you'll need to provide the applicant's name, date of conviction, and address of the government agency that took action against the convicted.

For each conviction, you also must attach these documents:

• Presenting report
• Sentencing order
• Judgment of conviction
• Confirmation letter for probation or parole
• Documents showing evidence of rehabilitation
• Certificate of Rehabilitation

Completing background checks on your employees can help ensure this is a smoother process.

Signed Certification

Provide your name, business name, title, date, and signature to certify that the information you filled out in the application is true to the best of your knowledge.

Signing the application also means that you understand that your application will be accepted only if you meet the requirements of the Consumer Fraud Act.

Once you sign, send your application off to the home improvement unit of New Jersey's Division of Consumer Affairs.

The Waiting Period

Once you submit your application, it can take up to six weeks to learn if you were accepted or not. In the meantime, you can check for updates on the Division of Consumer Affairs website.

If you are granted a license, the certificate will get sent to you in the mail. The certificate must be displayed in your place of work.

When you receive the certificate, you'll also get a registration number. This number must be included on business vehicles, business-related documents, and your advertisements.

Your registration is valid for one year and renewal is required prior to the deadline. It's best to apply for this certification at the beginning of the year because every license expires on December 31.

This one license will allow you to work on residential and commercial properties throughout the state.

Tradesman Business and Law Exam

Plumbers, HVAC professionals, and electrical contractors need to be licensed in the state of New Jersey. All commercial trades need to take an exam and obtain a license before any work can take place.

Contractors can apply online through the Division of Consumer Affairs. The application fee is $100.

Board members will review applications once a month and approve them following each meeting.

Approval letters are sent to applicants and then the licensing exam must be scheduled and passed before the actual license can be issued.

To qualify for an examination, you need evidence of one of the following educational requirements:

• Completion of a four-year U.S. Department of Labor-approved apprenticeship
• Four-year Bachelor's degree from an accredited college plus one year of journeyperson experience under a licensed contractor
• A two-year degree from a Trade school, two years of a U.S. Department of Labor-approved apprenticeship, and one year of journeyperson experience under a licensed contractor

With the right education under your belt, you can prepare for the Tradesman Business Law Exam. This exam is required for all New Jersey tradesman applicants.

You can take classes to prepare you for the exam, most of which you can complete at your own pace. Our New Jersey contractor license courses highlight exam instructions and provide students with practice exam questions to prepare for the real deal.

If you have a license in another state, you can get a New Jersey license if the other state's standards are equal or comparable to those of New Jersey.

To renew this license, you'll pay a $160 renewal fee. New Jersey requires that you complete continuing education (14 hours) prior to each renewal.

For certain licenses, you'll sign a reciprocity agreement that can make the renewing process simple in more than one state. Reciprocity refers to when states recognize a license from another state.

How to Get an Apprenticeship

To qualify for a contractor's license and take the business and law exam, you may need an apprenticeship. It can be difficult to secure one, so we'll provide a few tips.

Once you know the trade you are interested in, connect with the appropriate building trade union training centers. They can help you apply for various career opportunities.

For most jobs, you'll need to meet these basic requirements:

• Be at least 18 years of age
• Have a valid driver's license
• Have a high school diploma or a GED equivalent

In some cases, you'll have to pass an aptitude test by the trade union that you are applying to.

Some unions will allow you to enter an apprenticeship program if you are first hired by a construction company. You may also have to apply to a program yourself.

No matter the path you choose, always contact the trade unions you are interested in working with. If unions require that you get hired by a contractor first, they will provide you with a list of contractors looking for workers.

Next, you'll interview in person. You will either be hired by a contractor or a trade union after the interview and begin work! You'll begin working almost immediately and earn pay while under the supervision of a journeyperson.

While working with construction professionals, you'll also receive classroom training through the trade union in addition to the hands-on work.

Get Business Insurance

Getting business insurance is a step on the way to getting a contractor's license. If you've been paying attention, you know you'll need a copy of your insurance when you submit your certification application.

A high-quality insurance plan can help protect you, your employees, and the overall business if there is a loss or accident on the property. It also adds another level of professionalism to complement your new license.

You will need general liability insurance to register for a contractor's license. However, it's beneficial to also have workers' compensation insurance and inland marine insurance if you want to protect your equipment.

How We Can Help You

Obtaining a contractor's license in New Jersey is a pretty straightforward process. All you need to do is register your business unless you are trying to become a trade contractor.

For those applying for a contractor's license for HVAC, electrical, plumbing, etc., we can help you prepare for the tradesman business and law exam.

Contact us today to learn more about how our exam preparation can benefit you!