If you live in New York and want to repair, remodel, or build residential properties, you must obtain a home improvement contractor license. This is a required legal step. Acquiring a license is something that’s required by state authorities to guarantee that the contractors are fully qualified and that they are safe to do business with. Consumers and Contractors can check licensing status here.
Some of the activities that are covered under this license include replacing, constructing, or repairing swimming pools, driveways, sidewalks, fences, porches, patios, garages, and similar home improvement projects.
Like other types of contractors, a home improvement contractor must meet a range of criteria to be legally allowed to operate. One of the most important licensing requirements to provide security to the clients you will work for is the contractors license bond.
The Requirements You Must Meet to Acquire a NY Home Improvement Contractor License
As with any other licensing process for a contractor, a home improvement contractor in New York must be able to demonstrate their professional experience, along with their business know-how before they can work in the state. The regulating body that issues these licenses is the NYC Department of Consumer Affairs.
The requirements that are the most important when you are applying for this license include the following:
- The proof of a business and a home address
- Information on workers compensation insurance coverage
- Certificate of Authority Application Confirmation Number of Sales Tax ID
- Contractual Compliance Agreement
- Employees list
- Trust fund or home improvement bond
- Fingerprints (required for shareholder or member with over 10 percent stock, corporate officer, general partner, and sole proprietor)
More information can be found at NYC Consumer Affairs website.
Also, for a shareholder or member with over 10 percent stock, corporate officer, general partner, and sole proprietor, you must go to the DCA Licensing Center and take the Home Improvement Exam. It is required that you answer 21 of the 30 total questions properly. The exam comes with a fee of $50 and it must be completed within 30 days after you have submitted the licensing application.
Acquiring the Home Improvement Bond Needed
As mentioned above, one of the main requirements for you to get your New York home improvement contractor license is to present a form of security to the Department of Consumer Affairs. This can be either a home improvement contractor license bond or a trust fund. For most, the preferred method is the home improvement contractor license bond.
In New York, only home improvement contractors are required to get the license bond. This bond must be for $20,000 and provides a guarantee that you (as the contractor) will fulfill your obligations. It serves as a safety net for all your customers that you will dutifully complete your work.
Cost of the Bond
These license bonds are freely written by MG Surety Bonds. The cost for most contractors will be $100 for one year or $150 for two years, depending on the applicant’s credit. Most surety bond companies will provide discounts for purchasing multiple years in advance. These discounts are usually 25% – 30%. Strangely enough, these license bonds are required to expire on February 28th of odd years. However, they are easily renewed with a continuation certificate.
Underwriting New York Home Improvement Bonds
These license bonds are easily obtainable with good credit. A contractor can either call us or complete this application. Most of these license bonds can be issued withing minutes. Even contractors with credit challenges can obtain these license bonds, although the cost may be higher.
Indemnity is Required
Like all surety bonds, these contractor license bonds are written on the Principle of Indemnity. That means is a valid claim is filed against the bond, the surety bond company will seek reimbursement from the contractor and indemnitors. This is a major difference between surety bonds and insurance. Contractors should do everything they can to avoid claims against their bonds.
A Home Improvement Contractor License Bond is just one of many surety bonds a contractor may need. Contractors with questions can contact us anytime or visit our Surety Bonds Frequently Asked Questions Page here. At MG Surety Bonds, we want to be your surety bond broker for life and look forward to assisting you.