If you’re considering becoming a contractor in the state of Texas, you’re probably trying to discern which rules and regulations are applicable to your line of work. There can be specific insurance, bonds, and other requirements — including carrying a license.
If you are starting a new construction business or looking to expand your business into Texas, this guide will point you in the right direction toward running your business above board. We’ll go over the application process, the rules, and the requirements for getting a license. The goal is to ensure you’re able to build your business without the stress of wondering if you’re in compliance with local laws and regulations.
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Not all contractors in Texas need to hold a license. Whether or not you need a license depends on your trade and the area in which you’re working. So who needs a contractor license in Texas?
If you’re a handyman, general contractor, or builder, you don't need a contractor license in Texas. The state does not require folks in these lines of work to carry a license issued by the State. However, you might have some additional paperwork to sort through depending on where you’re working — and certain Texas cities require specific licenses and registration to work in depending on your trade and other factors.
Contractors that specialize in certain trades need to hold a Texas contractor license: Plumbers, electricians, and HVAC technicians will need to meet specific requirements and pass a test issued by the state. There may also be local laws requiring additional paperwork from individual municipalities before you begin work.
Fire sprinkler installers, well drillers, mold remediation contractors, and companies installing elevators and escalators also need to carry a state license.
Keep in mind that even if you don’t consider yourself an electrician, plumber, or HVAC tech, if you offer those services, you’ll need to carry a license to perform those trades.
Texas mechanics lien laws do not require a contractor to hold a license in order to file a lien. Even if the state requires you to hold a license, and you are unpaid for work you performed without a license, you still have the right to file a construction lien on the property.
Becoming a general contractor in Texas is extremely easy. Because the state doesn’t require a license, there are no age, experience, or educational requirements.
However, you will have to register your business with the state or county, depending on your business structure. You’ll have to decide whether you want to register as an LLC, partnership, corporation, or sole proprietor. Going the route of sole proprietorship is the easiest, but it also leaves unlimited personal liability for all the debts incurred through your business.
If you’re not a general contractor, handyman, or home improvement specialist, you will need a license to conduct business in Texas. The following are some of the requirements for the typical trades requiring licensing.
If you’re interested in becoming an electrician in Texas, you’ll have to apply through the Texas Department of Licensing and Regulation (TDLR). There are 11 different licenses, with several applying to specific types of businesses, such as maintenance or sign electrical work. As an example in this article, we’ll focus on the Master Electrician’s license.
To apply for the Master Electrician’s license, there are certain requirements and hoops to jump through. For one, you must have 12,000 hours of on-the-job training, which you’ll receive as an apprentice and journeyman working under a Master Electrician. You must also have held the journeyman’s license for two years.
Once you meet the requirements, you’ll have to send the Master Electrician License Application Form, with a $45 check, via mail to the Texas Department of Licensing and Regulation. Once the TDLR receives and approves your registration, they’ll contact you to take the test.
Once you pass the test, you’ll have to renew your license annually.
Plumbing contractor licensing has its own set of requirements, with four types of licenses for which you can apply. Licensing is a matter of the Texas State Board of Plumbing Examiners (TSBPE). To be an independent plumbing contractor, you’ll need a Responsible Master Plumber’s (RMP) license.
To apply for an RMP license, you’ll need to already hold a Master Plumber license in Texas. You’ll also have to complete a 24-hour training course with the TSBPE and provide proof of $300,000 of commercial liability insurance.
Once you send in your completed application, a Certificate of Insurance, and a non-refundable $345 licensing fee, the TBSPE will review it and approve or deny your license. If approved, you’ll have to renew your license for $420 each year.
Like electrical licensing, HVAC and refrigeration licenses are a matter of the TDLR. The TDLR offers a technician license or certificate, as well as a contractor’s license, which you’ll need to run your own HVAC business independently.
To qualify for a contractor’s license, you’ll have to have 48 hours of practical experience in air conditioning and refrigeration related-work under the supervision of a licensed contractor. Or, you could hold a technician certification for the 12 months prior to applying, in addition to having 36 months of practical experience.
There are exemptions for some of the requirements to take the test. They include earning a degree, diploma, or certificate from an accredited school, having a degree in mechanical engineering, being a licensed engineer, or having military training in HVAC. There is also an exemption for those employed by industrial operations, which wouldn’t apply if you were to strike out on your own.
You’ll also have to choose a class designation for your license. Class A licenses allow you to work on any size unit. Class B allows you to work on cooling systems 25 tons and under, as well as heating systems of 1.5 BTUs an hour and under.
To apply, you must be 18 years old and send in a completed application to the TDLR. There is a fee of $115. Once the TDLR reviews and approves your application, they’ll contact you to take the exam. If you pass and receive a license, it’ll be your responsibility to renew it each year.
After passing the exam, there are insurance requirements you need to meet:
Class A:
