North Carolina Overhauls Landscape Contractors License Bonds

North Carolina Overhauls Landscape Contractors License Bonds

Date Enacted:  August 2, 2014

Date Effective: August 2, 2014

North Carolina’s HB 366 (also known as the North Carolina Farm Act of 2014) rewrites and revises many rules for a variety of businesses that fall under the umbrella of agriculture.

The changes touch on a variety of issues including confidential agricultural investigations, authority to regulate fertilizer, and landscape contractor licensing statutes. One of the biggest changes is the required surety bond type has changed.

Previously, only registration was needed if a contractor fell under the landscaping contractor laws, but requirements now include licensing and the posting of a license surety bond. Get your North Carolina Landscape Contractors’ Licensing Compliance Bond in order to comply with the new standards set forth in this bill.

How Do the Changes Affect Landscape Contractors Bonds?

Landscape contractors are now required to be licensed and post a contractor license bond in the amount of $10,000. A letter of credit may also be posted in lieu of the surety bond. Prior to these amendments, landscapers were only required to register with the state. According to these revisions, direct actions against the bond can now be made.

HB 366 also provides exemptions. Under this law, the North Carolina Department of Transportation (NCDOT) is excluded from the licensing obligations. However, when a landscaping project surpasses the state bond threshold, NCDOT must hire a licensed landscape contractor to carry out the work.

Are You Exempt?

Not all landscaping projects fall under this law. There are some jobs that may not meet the state’s stipulated project amount of $30,000 for a consecutive twelve month period for a single job site. This amount is the total of all labor, materials and anything else included to perform the job.

Golf course owners and property owners are not required to be licensed or bonded under this bill. Individuals and businesses which are clearing land, grading plots and other areas of land and performing erosion control are also exempt. Landscaping performed on a farm for agricultural purposes falls outside the requirements of this law as well. Arboriculture, landscaping other than mowing and edging, any project for wastewater management and landscape construction done by utilities for erosion control and grading are also all exempt.

Sod, seed and plugs can be placed by sod producers who are certified by the Plant Industry Division of the North Carolina Department of Agriculture and Consumer Services without need for a license or bond as it applies to this particular bill. Lastly, plumbers, electrical engineers, electrical contractors and general contractors licensed under various General Statutes and carrying out work in their designated professions do not need to be licensed and bonded in accordance with HB 366 as they are covered under other statutes.

Next Steps

Now that you understand the requirements of the North Carolina Farm Act, you may have to become licensed and bonded. If you’ve never done this before, you may have a few questions about the process.

First, get an application for a business/license from the North Carolina Landscape Contractors’ Licensing Board. Then apply for your contractor’s license bond. You can complete this process online and get an instant approval.

Prices for the bond depend on your credit. The price you pay for the bond is a percentage of the total amount of the bond, called a premium. Your premium can be as little as 1%–3% of the bond amount for those with good credit and as much as 15% for those with bad credit.

Last, send the business/license application and your surety bond to the Board.

Act Now! You May be Grandfathered

Some landscapers may be grandfathered and licensed without sitting for the license exam. Those landscaping contractors that were registered by December 31, 2014, but not licensed must obtain a landscape contractors license bond and send their proof of bond and the appropriate Grandfather Application to the North Carolina Landscape Contractors’ Licensing Board before August 1, 2015. Other entities included in the grandfathering clause are:

  • Licensed Irrigation Contractors
  • Certified Turf Professionals
  • Individuals with three years of documented landscape contracting experience as of December 31, 2014.

A Few Last Thoughts

A word to the wise — bonds are meant to protect the public, not you. They are basically an insurance policy to ensure that damages can be taken care of if you don’t follow the letter of the law. You should avoid bond claims because they will cost you money, and potentially your reputation. It’s always best to follow the law and any contracts you have signed rather than default.

Read the full text version of the North Carolina Farm Act for more details.
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