Professional License Lawyer in North Carolina

The Four Paperwork Mistakes That Will Suspend Your GC License Quickly

The Four Paperwork Mistakes That Will Suspend Your GC License Quickly

Today, we’re going to talk about the four paperwork mistakes that will likely get your general contractor license suspended quickly. The first one is a biggie, and it happens far too frequently and is easily avoidable. So the first one is, if you’re going to pull a permit as a licensed general contractor, you are wholly responsible for the job. You need to ensure that all the money is processed through your qualified company, or if you are a qualified individual without a company, make sure it runs through you and your bank account. You should be cutting the checks or ensuring your company cuts the checks. Ensure you have all the invoices, and that the invoices match up with the payments for both labor and materials. Do not let your subcontractors pay for anything. Everything needs to be processed through you. For example, when you cut a check to the roofer, the roofer will make disbursements to their employees. That’s their business. However, when it comes to drawing from a bank, it needs to come through the licensed general contractor’s company and bank accounts, and then be disbursed accordingly. This approach avoids any potential confusion and helps you stay compliant with the NC Licensing Board for General Contractors. The other thing to consider here is that there are times when general contractors simply hand over the permit saying, ‘Well, I got the permit pulled. This other guy, he’s a sub that’s worked for me for a long time. He can handle everything.’ No, the NC Licensing Board for General Contractors is going to view that as if you’re renting your license to him. Whether that was your intention or not, that’s the way they really look at that. So you really have to supervise. You really have to run all the money through there, paying for both labor and materials, and that’s got to be done. It’s best to have as much paper trails as you possibly can, including text message communications with people, especially the clients, which brings us to #2.
Make sure that you frequently and adequately communicate with your clients, subcontractors, and everybody else on the job site. That way, there’s no confusion about things. Sometimes you’re going to run into delays. If you don’t communicate properly with your clients, they’re going to get upset. They’re going to wonder what’s happening: ‘Oh, he’s not responding to me. He took my money and ran off, etc.’ But if you properly communicate, document those communications, and keep records of all those text messages and emails. If you have a phone conversation with somebody, keep a notepad and a pen next to you and just write down, ‘I spoke with Jane and John Smith on such date at such and such time.’ Your call logs on your phone will back it up. Note, ‘We talked about this.’ If you’ve got some sort of system in place where for each job you can input things online, then transfer it over from where you wrote it to what the client relations manager is, typically called, and then also keep the physical copy that you wrote on there. But document all communications with your clients, and it’s best to document them with your subcontractors and vendors as well. Documentation is huge, and that’s going to keep you out of trouble a lot.
Another thing that you really need to consider for paperwork purposes, and this ties back to communication with clients, is written change orders. You don’t want a change order that’s just, ‘Oh, well, we talked about this and etc.’ You want to have written change orders that are very specific. At the beginning of any engagement with a client, you should also have a well-laid-out written contract. This ensures that everyone is literally on the same page and there is no confusion.
And the last one of the four is to make sure you have your qualifier license linked up with the company that you’re actually advertising as being licensed, if that makes any sense. So, say you’re a qualifier and your company’s ABC Construction, North Carolina. You’ve got the qualifier license, and ABC Construction, North Carolina is properly licensed. You are the qualifier or you’ve got somebody else as the qualifier for it. That’s the company with the license. You can’t be advertising as XYZ General Contracting Services, North Carolina if that company is not actually licensed. So you need to make sure that the business that is qualified is the one you are actually advertising as being licensed.
So those are the four main things. I hope everyone has a great day. Keep building for North Carolina.
*Nothing in this blog establishes an attorney-client relationship. Nothing in this blog is legal advice. If you have any questions, please check out our other blogs and our Youtube channel. You can also call us at 919-521-8810 with questions.