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Construction Contractors FAQs

Information for Consumers

1.   What should I know before hiring a construction contractor?

Most home construction contractors provide skilled services, hire trained and licensed subcontractors, and use reliable materials. But not every person who purports to be a contractor is skilled, experienced, and qualified. Before embarking on your home improvement project, take the following steps:

  • Make sure the contractor is registered and has a bond and insurance
    In Alaska, most contractors that perform residential home improvements must be licensed by the Division of Corporations, Business and Professional Licensing. Among other requirements, general contractors must post a bond for $25,000 and specialty contractors for $10,000.
    Warning: Sometimes people will say they are "licensed and insured" when they only have a business license and liability insurance -- not a professional license and a bond. A bond may be a source of funds available to a homeowner if work is negligently performed.
  • Check references and get written estimates
    Being licensed and bonded is not a guarantee of high quality performance. Interview and get bids from two or three contractors. Check their references and talk to friends, neighbors, or former clients who are familiar with the contractor's work, reliability, and business practices. Estimates should be in writing and include detailed specifications for the job, the materials, labor, timeline, and the total charges for the work.
  • Research complaint history
    Check with the BBB for complaints against the contractor. You may also want to check court records to see if lawsuits have been filed for incomplete or shoddy workmanship or for other unfair or deceptive practices.
  • Insist on a detailed written contract
    A home improvement contract is a written agreement defining exactly what work will be performed, the materials used, the start and completion dates, the total cost of the project, and a payment schedule. Oral promises are very difficult to enforce; if a provision is not written in the contract, you'll have a hard time proving it was part of the deal. A well-written, detailed contract will provide clear expectations for you and the contractor and help avoid many of the problems experienced by consumers. Ask for time to review the contract on your own and make sure you understand the contract terms. Don't hesitate to ask for clarification or suggest modifications. Never sign a contract with blank spaces.
    Tip: Alaska has a five-day cancellation period (five business days) when a seller solicits a sale and the agreement is signed in your home or at a place other than the contractor's place of business. The contractor should provide written notice of this right.
  • Make partial payments as different stages are completed
    Don't pay a contractor in full before your project is completed. Most projects are paid for in installments, with partial payments made at different stages. Final payment should be contingent on satisfactory inspection of the project.
    You should know the entire cost of your proposed project, including any interest charges, and then comparison shop for the financing you need from reputable lenders through personal, bank, or home equity loans.
2.   How do I know if a construction contractor is licensed and insured?

Professional Licensing Section: You can check to see if a contractor is licensed in the State of Alaska by performing a Professional License Search on the Division of Corporations, Business Licensing and Professional Licensing section’s website. In the Professional License Search details, you can see if the construction contractor’s license is current, what specialty type of license they may have and if there has ever been any licensing action taken against them.

Corporations Section: If a contractor is an entity (i.e. corporation, LLC, etc.) you can check the status of a contractor’s entity online at: Search Corporation

Business Licensing Section: Per Alaska Statute AS 43.70, an Alaskan Business License is required prior to engaging in business activity. You can check the status of a contractor’s business license online at: Search Business License Database

3.   What if who I am hiring is a "handyman"?

Starting January 1, 2015, a professional “General Contractor – Handyman” license is required. If someone is doing business under this license, the aggregate total of the project must not exceed $10,000 and they must carry public liability and property damage insurance as required by AS 08.18.101.

To check the status of the contractor’s professional license, entity registration and business license with the State of Alaska, see Question #2 above.

4.   How can I protect myself from home-improvement scams?

Don't do business with anyone who claims to be a contractor and who:

  • solicits door-to-door
  • asks you to pay for the entire job up-front
  • pressures you for an immediate decision
  • offers you discounts for finding other customers
  • just happens to have materials left over from a previous job
  • only accepts cash payments
  • asks you to get the required building permits
  • offers exceptionally long guarantees
  • suggests that you borrow money from a lender the contractor knows. If you're not careful, you could lose your home through a home improvement loan scam.
5.   What steps can I follow to ensure my home-improvement project is done correctly?
  • Ensure that your contractor has complied with state licensing requirements. To check the status of the contractor’s professional license, entity registration and business license with the State of Alaska, see Question #2 above.
  • Verify your contractor's name, address, telephone number, credentials, and references before signing a home improvement contract.
  • Solicit two or three bids from contractors for your project, and get written estimates for the detailed specifications included in your home improvement plan.
  • Include in your contract all the terms, conditions, warranties, and verbal promises concerning your home improvement project.
  • Do not sign a contract until you have thoroughly read and understood all its provisions, notices, and terms. Never sign a written agreement that is not completely filled out.
  • Obtain and keep copies of every written document, including contracts and receipts from suppliers and others providing materials for your project.
  • Take your time, and do not hesitate to say no to high pressure sales tactics by a contractor or sales representative.
  • Know about your five-day cancellation rights for door-to-door sales, and don't hesitate to cancel a home-improvement contract within the time period if you have concerns.
  • Never pay for the entire job in advance or make scheduled payments before the agreed-upon terms are met and the work is completed to your full satisfaction.

Information for Contractors

1. Do I need a construction contractor license?

Professional Licensing Section:The only way to evaluate whether you need a license is to become familiar with the laws governing your profession. The statutes and regulations regarding contractors cover all circumstances in which you need a contractor license and provides for certain exemptions.

You may need a construction contractor or mechanical/electrical administrator license if:

  • Your business name, signage, or advertising potentially indicates to the public that you are either a builder or contractor, or that you are qualified to engage in the contracting business.
  • If you plan to submit bids to work as a contractor.
  • If you work for a contractor, work as a subcontractor on smaller jobs for a general contractor, or subcontract work to a licensed contractor.
  • If you perform mechanical or electrical installation.
  • If you perform mechanical or electrical repairs or maintenance. The The Department of Labor and Workforce Development may also require that certain electrical and mechanical work be performed by a licensed journeyman. (Anchorage: 269-4925, Juneau: 465-4871, Fairbanks: 451-2894)

Corporations Section: If your business structure is an entity (i.e. corporation, LLC, etc.), per Alaska Statute Title 10, you must register your entity; for more information go to: Corporations Section

Business Licensing Section: Prior to engaging in business activity, per AS 43.70, you must obtain an Alaskan Business License; for more information go to: Business Licensing Section

For more information, go to: How to Get Started

2. I'm a handyman, do I need a professional license?

Professional Licensing:In a move designed to provide consumer protection to Alaskans, the legislature passed a bill in 2014 extending the licensure and bonding requirement to all construction contractors—including those often known as “handymen” who work on smaller jobs.

While many handymen don’t consider themselves construction contractors, Alaska Statute defines a contractor as a person constructing, altering, repairing, moving, or demolishing a building, highway, road, railroad, or any type of fixed structure, including excavation and site development and erection of scaffolding. (AS 08.18.171(4))

Regardless of the size of the job, any business or person that falls under “a person who, in the pursuit of an independent business, undertakes or offers to perform, or claims to have the capacity to perform, or submits a bid for a project” is considered a construction contractor and must be registered, bonded, and insured to perform this type of work. (AS 08.18.171(4))

Starting January 1, 2015, a professional “General Contractor – Handyman” license for this type of work is required. If you are doing business under this license, the aggregate total of the project must not exceed $10,000 and you must carry public liability and property damage insurance as required by AS 08.18.101.

Corporations Section: If your business structure is an entity (i.e. corporation, LLC, etc.), per Alaska Statute Title 10, you must register your entity; for more information go to: Corporations Section

Business Licensing Section: Prior to engaging in business activity, per AS 43.70, you must obtain an Alaskan Business License; for more information go to: Business Licensing Section

For more information, go to: How to Get Started

3. What are the amounts of bonding required of contractors?

Effective January 1, 2015, bonding requirements for existing contractor and home inspector license types have increased:

  • General Contractor without Residential Endorsement: $25,000
  • General Contractor with Residential Endorsement: $20,000
  • Mechanical or Specialty Contractor: $10,000
  • Home Inspector: $10,000
  • Handyman Contractor (i.e., a contractor whose work on one project – with an aggregate contract price of $10,000 or less, including all labor, materials, and other items, - when the work is not part of a larger or major operation or otherwise divided into contracts of less than $10,000 to evade a higher bonding requirement): $5,000

For guidance on how to list your business name on your bond and insurance documents, please see FAQ #13 below.

4. How do I obtain a construction contractor license?

Professional Licensing:To apply for any type of contractor license or if you have further questions, contact a licensing examiner and visit the web site: ProfessionalLicense.Alaska.Gov/ConstructionContractors

Corporations Section: If your business structure is an entity (i.e. corporation, LLC, etc.), per Alaska Statute Title 10, you must register your entity; for more information go to: Corporations Section

Business Licensing Section: Prior to engaging in business activity, per AS 43.70, you must obtain an Alaskan Business License; for more information go to: Business Licensing Section

For more information, go to: How to Get Started

5. What are a contractor’s advertising requirements?

Per a combination of Professional Contractors Statutes (AS 08.18) and Business Licensing Regulations (12 AAC 12.020) a contractor’s advertising, contracts, correspondence, cards, signs, posters, papers, and documents prepared by the contractor MUST contain the following:

  • Business Name as it appears on the Alaska Business License (per 12 AAC 12.020(g))
  • Contractors Name as it appears on the Professional Contractor’s License (per AS 08.18.051(b))
  • Contractor’s Professional License Number (per AS 08.18.051(b))
  • Mailing Address (per AS 08.18.051(b))
  • Physical Address (per AS 08.18.051(b))
6. How do I know which contractor license to apply for?

The only way to evaluate which license you need is to become familiar with the laws governing your profession. The statues and regulations regarding contractors cover all circumstances in which you need a contractor license and provides for certain exemptions.

Here are some of the main clarifying points between each construction contractor license type:

  • General Contractor without Residential Endorsement:Contractors whose operations require the use of three or more trades or the use of mechanical or specialty contractors and subcontractors who are under the supervision of the contractor. For more information, review the following statutes and regulations (via the link above):
    • AS 08.18.171(7). Definitions. General Contractor.
  • General Contractor with Residential Endorsement: Contractors undertaking the construction or alterations of a privately-owned residential structure of one to four units that is used or intended to be used as a human dwelling. For more information, review the following statutes and regulations (via the link above):
    • AS 08.18.025. Residential Contractors.
    • AS 08.18.171(15). Definitions. Residential Contractor.
    • 12 AAC 21.650-21.695. Article 4. Residential Contractor Endorsement.
  • Mechanical Contractor:Contractors whose business operations involved plumbing, pipe fitting, sheet metal, heating, air conditioning, ventilating, or sprinkler and dry chemical fire protection trades in order to install or modify mechanical piping and systems, devices, fixtures, and equipment or other mechanical materials subject to the codes listed under AS 08.18.171(12). For more information, review the following statutes and regulations (via the link above):
    • AS 08.18.028. Mechanical Contractors.
    • AS 08.18.171(12). Definitions. Mechanical Contractor.
    • 12 AAC 21.600. Article 3. Mechanical Contractor.
  • Specialty Contractor: Contractors, other than Mechanical Contractors, who provide a limited use of specific construction techniques or materials as part of one specialty trade by a specialty. Generally, specialty contractors perform work that requires the use of no more than three trades. The specialty contractor trades recognized by the department are listed under 12 AAC 21.200-21.570 (via the link above). For more information, review the following statutes and regulations (via the link above):
    • AS 08.18.024. Specialty Contractors.
    • AS 08.18.171(16). Definitions. Specialty Contractor.
    • 12 AAC 21.200 – 21.570. Article 2. Specialty Contractor Trades.
  • Handyman Contractor: Contractors who work on one project with an aggregate contract price of $10,000 or less, including all labor, materials, and other items, when the work is not part of a larger or major operation or otherwise divided into contracts of less than $10,000 to evade a higher bonding requirement, shall be $5,000. For more information, review the following statutes and regulations (via the link above):
    • 12 AAC 21.700. Article 5. Handyman Contractor.
7. What all do I need to submit with my application?

All items required to be submitted as part of your application packet are listed on the application instructions found here.

8. Do I need a residential contractor endorsement in addition to my contractor’s license?

Contractors undertaking the construction or alterations of a privately-owned residential structure of one to four units that is used or intended to be used as a human dwelling are required to hold in a Residential Endorsement in addition to a General Contractor with Residential Endorsement. For more information, review the following statutes and regulations (via the link above):

  • AS 08.18.025. Residential Contractors.
  • AS 08.18.171(15). Definitions. Residential Contractor.
  • AAC 21.650-21.695. Article 4. Residential Contractor Endorsement.
9. When is my application considered “complete” and put into processing?

An application is complete once all required items for the application packet – as listed on the first page(s) of the application from our website (including fees) – have been received by our office. The average time to process an application generally takes several weeks from the time the complete application packet has been submitted; and processing times can be lengthened when a program is in renewal or a heavy filing period.

10. I submitted an application but haven’t heard anything or received my license yet. What should I do?

The average time to process an application generally takes several weeks from the time the complete application packet has been submitted; and processing times can be lengthened when a program is in renewal or a heavy filing period.

You should utilize MY LICENSE to track the progress of your license. MY LICENSE is a self-serve portal that allows you to see real-time progress on your application; including all notes and status letters from the licensing examiner. Please review the MY LICENSE instructions for more information.

If you submitted your application four or more weeks ago, you have no updates on MY LICENSE, and you have not heard anything from the licensing examiner, please notify us of this situation via the Professional Licensing Contact Form.

11. Is there a way I can track the progress of my application?

Yes! In 2018, the department introduced an online feature to help you conveniently manage your professional license or application: MY LICENSE. Please review the MY LICENSE instructions for more information.

12. In what order do I need to obtain my corporation registration (if applicable), professional construction contractor license, and business license?

Please review our How to Get Licensed page for detailed instructions.

13. How does my business name need to be written on the required bond and insurance documents, and how long before applying do I need to obtain those from my bond broker/insurance agent?

The way your business is listed on your bond and insurance documents must be identical to how it is listed on your license application. If the business will be owned by a corporation, LLC, LP, or LLP, then both your corporate entity name and Doing Business As (DBA) name must appear on the bond/insurance documents, unless your entity name and DBA name are identical. If your business will be owned by a sole-proprietor/individual(s), it just needs the DBA name. Your DBA name and corporation name are all listed under Part II – Registration Information – on the initial application. Be sure that your DBA name on your professional license and your DBA name on your business license (which you will obtain after your professional license is issued) are also identical.

You’ll also need to ensure the bond/insurance documents are submitted to our office within 30 days of issuance by your bond broker and/or insurance agent. If the documents are dated more than 30 days prior to the date the documents are received by our office, they cannot be accepted and we’ll ask you to obtain updated documents before your license can be issued.

Examples:

  • Significantly different corporation and DBA names: If you are an LLC under the name “Alaska Construction, LLC” and you list your DBA name as “Alaskans Building Things,” then your bond/insurance documents should read, “Alaska Construction, LLC DBA Alaskans Building Things."
  • Slightly different corporation and DBA names: If you are an LLC under the name “Alaska Construction, LLC” and you list your DBA name as “Alaska Construction,” then your bond/insurance documents should read, “Alaska Construction, LLC DBA Alaska Construction."
  • Identical corporation and DBA names: If you are an LLC under the name “Alaska Construction, LLC” and you list your DBA name as “Alaska Construction, LLC,” then your bond/insurance documents should read, “Alaska Construction, LLC”. You do not need to repeat the DBA name if it’s identical to the corporate entity name.
  • Sole-proprietorships (i.e., no corporation): If you are a sole-proprietor business applying for a construction contractor professional license, then you will only need to list your DBA name: “Alaskans Building Things."