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Alabama General Contractor License: Get Licensed to Work

August 28, 2023 10 min. read
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Getting your general contractor license in Alabama is a surefire way to get your foot in the door of the lucrative construction industry in the United States. According to the U.S. Bureau of Labor Statistics, over 36,000 new construction manager jobs are projected to be available nationally by 2031. 

And according to the Economic Research Institute, general contractors in Alabama earn an average annual salary of more than $123,000, with top earners bringing in close to $151,000. So, there’s never been a better time to lay your career foundation and become a general contractor, particularly in the Yellowhammer State. 

In this licensing guide, we’ll cover everything you need to know about getting your contractor license. Remember to bookmark this page so you can check back in whenever you have questions about the general contractor license in Alabama.

Do you need a general contractor license in Alabama?

In Alabama, you have a little more opportunity to work without a license than in some other states. A General Contractor license is required for commercial projects with a value of $50,000 or more, and a Residential Home Builders license is required for residential projects with a value of $10,000 or more.

Alabama has two licensing boards for contractors:

Note that a licensed General Contractor must also obtain a Residential Home Builders license in order to perform new construction of residential buildings.

Types of contractor licenses in Alabama

Both General Contractor and Residential Home Builders licenses have different classifications that applicants must choose from.

For General Contractors, there are six major license classifications:

License ClassificationDescription
Building ConstructionLicense holder can:
• Construct or modify buildings and structures used for shelter or comfort
• Excavate and create foundations for the construction of buildings
Building Construction Under Four Stories (BCU4)License holder can:
• Construct or modify buildings and structures up to three stories tall with roofs not over 50 feet high used for shelter or comfort 
• Excavate and create foundations for the construction of buildings under three stories
• Make interior, non-structural changes and repairs to buildings four stories or more
• Work under a General Contractor or Construction Manager licensed under the Building Construction classification for projects including buildings of four stories or more
Highways & StreetsLicense holder can:
Construct roads, streets, guardrails, fences, parkways, park ideas, bridges, grading, draining, and perform related work
Municipal & UtilityLicense holder can:
• Perform clearing, grubbing, and paving; construct curbs, gutters, walks, alleys, and driveways; work on sewer projects, water projects, gas projects, electric projects, and telephone projects; and perform related work
Heavy & Railroad ConstructionLicense holder can:
• Construct railroads, bridges, foundations, pile driving, cofferdams, and tunnels; work on drainage projects, irrigation projects, hydro-electric development, transmission lines, pipelines, marine construction, and runways; and perform related work
Specialty ConstructionLicense holder can:
• Perform any work in connection to constructing or modifying buildings and structures that requires special skills or trades

A full review of the General Contractor classifications is available on the Alabama Licensing Board for General Contractors website.

For Residential Home Builders licenses, there are three classifications:

License ClassificationDescription
Residential Home Builders Unlimited License holder can:
• Engage in all forms of residential construction and repair, regardless of scope (includes roofing)
Residential Home Builders LimitedLicense holder can:
• Engage only in residential repair or improvement projects (excludes roofing) 
Residential Home Builders Limited, RooferLicense holder can:
• Install or repair the external covering of a residence building or structure

A full review of the Residential Home Builders licensing classifications is available on the Home Builders Licensure Board website.

Alabama general contractor license requirements

There are no educational requirements for obtaining a General Contractor license or a Residential Home Builders license. But both the LGBC and the HBLB require proof of experience.

License TypeRequirements
General ContractorMust submit three work/job references for each of the six major classifications they’re applying for
Residential Home Builders Unlimited May take the Alabama Home Builders exam in lieu of submitting proof of experience
Residential Home Builders Limited and Residential Home Builders Limited, RooferMust submit a business or occupational license as a contractor issued by a municipality, township, or county within the past year

In many cities, like Huntsville, Alabama, professionals and businesses also have the additional requirement of obtaining a business privilege license. It is important to check with each city in which you plan to work to see if any additional licenses are required. 

How to get a general contractor license in Alabama

Let’s take a look at the steps you must take to get your General Contractor or Residential Home Builders license:

License TypeSteps to Get Your License
General Contractor1. Complete the application
2. Obtain general liability insurance and workers’ compensation insurance (if the business has or plans to have employees)
3. Register your business with the Secretary of State
4. Provide proof of citizenship
5. Provide three work/job references
6. Provide financial statements no less than one year old, prepared by a CPA
7. Have proof of working capital or a line of credit worth at least $10,000
8. Pass the Business & Law exam and/or any trade exams required by the board
9. Pay all applicable fees

Online application submissions are not accepted.

All hard copies of the application forms must be signed, notarized, and mailed to the Alabama Licensing Board for General Contractors at:

445 Dexter Avenue, Suite 3060
Montgomery, AL 36104
Residential Home Builders Unlimited 1. Complete the Unlimited license application
2. Order a business-related credit report (the credit reporting agency must submit the report directly to the board)
3. Pass the HBLB Business & Law and HBLB Skills exams
4. Pay all applicable fees

Online application submissions are not accepted.

All hard copies of the application forms must be signed, notarized, and mailed to the Home Builders Licensure Board at: 

P.O. Box 303605
Montgomery, AL 36130-3605
Residential Home Builders Limited and Residential Home Builders Limited, Roofer1. Complete the appropriate application: Limited license application or Roofers license application
2. Order a business-related credit report (the credit reporting agency must submit the report directly to the board)
3. Submit proof of experience and ability (business or occupational license as a contractor issued within the past year)
4. Pay all applicable fees

Online application submissions are not accepted.

All hard copies of the application forms must be signed, notarized, and mailed to the Home Builders Licensure Board at: 

P.O. Box 303605
Montgomery, AL 36130-3605

Alabama general contractor exam

The Business & Law exam for General Contractors is administered by PSI testing centers, and the HBLB Business & Law and HBLB Skills exams are administered by Prov testing centers.

Here is some information about each exam:

License TypeExamRequirements
General ContractorBusiness & Law

Candidate Information Bulletin
• 50 questions

• 120 minutes to write

• 70% to pass (35/50)
Residential Home Builders UnlimitedHBLB Business & Law

Candidate Information Bulletin
• 40 questions

• 120 minutes to write

• 70% to pass (28/40)
Residential Home Builders UnlimitedHBLB Skills

Candidate Information Bulletin
• 80 questions

• 240 minutes to write

• 66% to pass

Does Alabama reciprocate general contractor licenses?

Reciprocal license agreements let general contractors from other states apply directly for an equivalent license in Alabama.

Alabama reciprocates its General Contractor and  Residential Home Builders contractor licenses with the following states:

StateLicense
Arkansas• General Contractor
Mississippi• General Contractor
• Residential Home Builders
Louisiana• General Contractor
• Residential Home Builders
Tennessee• General Contractor
• Residential Home Builders
North Carolina• Residential Home Builders
South Carolina• Residential Home Builders

Note that with the Residential Home Builders reciprocity agreement, you may be exempt from taking the HBLB Skills exam, but you will still be required to pass the HBLB Business & Law exam.

How much does a general contractor license cost in Alabama?

The cost of an Alabama contractor license varies depending on the type of license you want to hold and the exams you need to take. In general, you can expect to pay around $250-$510 for the initial licensing process. 

For General Contractors, here are the relevant fees:

Licensing StepFee
Application$300
Business & Law Exam$96
Renewal$200

For Residential Home Builders, here are the relevant fees:

Licensing StepFee
Unlimited application$350
Limited application$350
Roofer application$250
HBLB Business & Law Exam$80*
HBLB Skills Exam$80*
Unlimited & Limited License Renewal$350
Roofer License Renewal$150
Late Renewal+$50
Reinstatement$600

*If both exams are taken on the same day, the cost is reduced to $130.

Renewing your general contractor license

General Contractor licenses in Alabama must be renewed annually. The Licensing Board for General Contractors determines your renewal month based on the first letter of your company name. See the chart below for details or consult the Licensing Board’s renewal information page.

Company Name Beginning WithRenewal Month
I, J, K, LMarch
M,NApril
O,P,Q,RMay
SJune
T,U,V,W,X,Y,ZJuly
G,HAugust
D,E,FSeptember
COctober
BNovember
ADecember

Renewal forms are available online only, and notices for renewal are no longer mailed to licensees. If you fail to renew your license within a year of its expiration date, you’ll need to resubmit your license application and retake all examinations.

Residential Home Builders licenses must be renewed annually and expire December 31 of the year they were issued. Renewal notices are sent online and through paper mail on October 1 of the current year. 

You can renew online via the Home Builders Licensure Board’s online renewal portal between October 1st and December 31st of each year. However, if you miss the deadline and your license expires, you must submit the correct expired application form and pay the $600 expired application fee to be reinstated.

Additionally, to maintain an active license, there are continuing education requirements of six credit hours each year for ages 60 and under. Visit the Home Builders Licensure Board’s website for more information.

What happens if my general contractor license expires? 

If you think your general contractor license has expired, stop working immediately.

Working without a general contractor license (or with an expired license) is a Class A misdemeanor, according to Alabama Code 34-8-6, and carries a fine of up to $5,000 for each offense.

So, if you’re a General Contractor, be sure to submit your renewal form before the end of your renewal month. And if you’re a Residential Home Builder contractor, watch your email and mailbox for your renewal notice.

How to start a contracting business in Alabama

With your Alabama general contracting license in hand, you’re well-equipped with the knowledge and expertise the industry requires. 

The next logical step? Establishing your own general contracting business and paving the way to greater profits.

Starting a business in any industry has specific requirements, and Alabama’s general contracting industry is no exception. But before you break ground on your new venture, familiarize yourself with the essential steps and prerequisites:

  • Research Alabama’s business requirements: The Alabama Small Business Commission provides resources and support for businesses in need of guidance. 
  • Insurance and bonding: Alabama requires general contractors to have both liability and workers’ compensation insurance. Ensure you understand the coverage amounts and types suitable for your business size and type.
  • Understand local licensing: While you have a state-level license, some Alabama cities or counties may require additional permits or licenses to operate. It’s crucial to research local regulations to remain compliant.
  • Register your business: All businesses in Alabama need to be registered with the appropriate state and local entities. This often includes registering your business name and obtaining a sales tax license if you’re selling goods or services.
  • Taxation: Get acquainted with the Alabama Department of Revenue’s guidelines on state business taxes. The Department has a collection of resources catered to small businesses called the Business Essentials For State Taxpayers (B.E.S.T) and also has a handy checklist for new business owners, which includes information about selecting your business structure, obtaining an Employer Identification Number (EIN), and registering your business name.
  • Employee regulations: If you plan to hire a crew, familiarize yourself with Alabama’s labor laws, wage regulations, and safety requirements.

There are also some practical considerations for general contractors who are thinking of starting their own company, including: 

Does a general contractor license in Alabama increase your earning potential?

Yes, getting your general contractor license in Alabama definitely boosts your earning potential. Alabama has strict limits for what residential and non-residential contractors can charge without being licensed. Getting your license opens the door to many projects that you wouldn’t otherwise be able to bid on or complete.

With a license, you’ll join the ranks of highly paid general contractors, potentially earning north of $120,000 a year. And if you open your own general contractor business, that number could be considerably higher.

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