Last verified against the Alabama Home Builders Licensure Board, the Alabama Licensing Board for General Contractors, and Title 34, Code of Alabama, on 20 October 2026. Bond and insurance coverage content reviewed by Tyler Williamson, Licensed Property & Casualty Insurance Agent, North Carolina.
Alabama has two contractor boards, and the type of building decides which one you need. Residential work over $10,000 (over $2,500 for roofing) needs a licence from the Home Builders Licensure Board. Commercial work of $100,000 or more needs a licence from the Licensing Board for General Contractors. An unlimited home builders licence takes two open-book exams, a clean credit report and about $350 in board fees.
Most confusion about Alabama comes from mixing up the two boards. A general contractor licence does not let you build homes, and a home builders licence does not cover commercial work. This guide covers both, starting with the residential licence, because that is the one most people searching for an Alabama contractor licence need.
Comparing states? See how to become a general contractor, our side-by-side of the requirements in every state we cover.
Which Alabama licence do you need?
| Home builders licence | General contractor licence | |
|---|---|---|
| Board | Home Builders Licensure Board (HBLB) | Licensing Board for General Contractors |
| Work covered | Homes and residential structures up to three floors and four units | Commercial, industrial and public work; swimming pools |
| Required above | $10,000 (roofing: $2,500) | $100,000 or more (pools: over $5,000) |
| Financial test | Credit report | CPA-prepared financial statement, $10,000 minimum net worth |
| Exam provider | Prov | PSI |
The general contractor law expressly exempts “the construction of any residence or private dwelling.” The one exception is old licences: general contractor licences numbered 1 to 18907, issued before the home builders board existed in 1992, can still be used for residential work. Any general contractor licence numbered 18908 or higher needs a separate home builders licence for homes.
Do you need a home builders licence?
Under section 34-14A-2 you are a residential home builder if you build, remodel, repair or improve a residence, or supervise or consult on that work, for someone else and the cost of the job, including labour and materials, exceeds $10,000. For residential roofing the threshold is $2,500. Advertising the work counts as engaging in it.
Two points catch people out:
- The threshold is the whole job, not your profit. A $12,000 bathroom remodel needs a licence even if most of the cost is materials.
- Subcontractors to a licensed builder are usually exempt. The licence duty attaches to whoever contracts directly with the homeowner. The Board’s rules give the example of a framer paid $30,000 by an unlimited licensed builder, who needs no licence of their own. The same framer contracting directly with a homeowner for $30,000 of framing would.
Work on your own home or your own real estate is exempt.
Is there an Alabama handyman licence?
No. Alabama has no handyman licence. Residential jobs at or under $10,000 ($2,500 for roofs) are outside the home builders law, but your city or county may still require a business licence. Electrical, plumbing and HVAC work is licensed by separate boards.
Unlimited, limited or roofing
The Board issues three types of licence. Choose by the work you will contract for directly.
| Licence | What it covers | How you qualify |
|---|---|---|
| Unlimited | Any residential work, including new homes and roofing | Pass the Skills and Business and Law exams |
| Limited | Repair and improvement involving one trade that does not affect structural integrity | Proof of experience; no exam |
| Roofers | Installing or repairing the roof covering only | Proof of experience plus a $10,000 bond; no exam |
An unlimited licence includes roofing, so you do not need a separate roofers licence. A limited licence does not include roofing: a limited licensee who wants to roof needs a roofers licence as well.
For a limited or roofers licence, the Board accepts any one of three kinds of experience evidence:
- a business or occupational licence as a contractor, roofer or related trade, issued by an Alabama city or county, that you hold now or held within the past year;
- a written, signed recommendation from a builder holding an unlimited home builders licence in Alabama or another state; or
- a recommendation from a building official.
The home builders exams
An unlimited licence requires passing two exams, both open-book and timed, administered by Prov:
| Exam | Questions | Time | Main reference |
|---|---|---|---|
| Skills | 80 | 4 hours | International Residential Code (2015) |
| Business and Law | 40 | 2 hours | NASCLA Contractors Guide to Business, Law & Project Management, Alabama Residential, 4th edition |
The Skills exam is weighted towards carpentry (20 questions), plan reading (10) and sitework and foundations (10). Business and Law is weighted towards estimating and bidding (8), contract management, financial management and project management (5 each).
Three useful details:
- No board approval is needed to sit the exam. You can register with Prov before you apply.
- The cost is $130 if you take both exams on the same day, or $80 each on separate days.
- A passing score is valid for three years. Apply within that window, or you sit the exams again.
Financial responsibility: your credit report
For unlimited and limited licences, the Board checks your finances through a credit report sent directly to it by a credit reporting agency. There is no net worth minimum, but the rules set limits on what the report can show:
- Business-related collections or foreclosures up to $500 in total are allowed. Above that, you must show they are paid, show a payment plan, or explain them to the Board’s satisfaction.
- Outstanding judgments and liens up to $500 in total are allowed, or up to $1,000 if they are under dispute in court, with the taxing authority or on appeal.
If you would rather not give your Social Security number for the credit check, the Board accepts five notarised business credit letters and a certified public records search instead.
The $10,000 roofers bond
Roofers licence applicants show financial responsibility with a bond of at least $10,000 instead of a credit report. The bond must name the Home Builders Licensure Board as obligee, run from issue to 31 December of the licence year, and be sent to the Board by the surety. Unlimited and limited licences carry no bond requirement. For how Alabama compares with other states, see contractor license bonds by state.
Insurance
The Board’s FAQ is direct: the home builders law does not require insurance to get a licence. But two other rules matter.
First, under section 34-14A-19, before starting work you must disclose in writing to the homeowner whether you carry liability insurance. The disclosure is signed by you and the homeowner and witnessed by someone the homeowner chooses. Failing to do it is a violation the Board can discipline. In practice, an uninsured builder has to put that in writing to every client.
Second, workers’ compensation. Alabama generally requires it once you have five or more employees, counting part-timers, corporate officers and LLC members. But businesses that build, or assist on-site with, new single-family detached homes must carry workers’ compensation whatever their headcount, according to Workforce Alabama. For what each policy covers, see licensed, bonded and insured.
Fees
| Fee | Amount |
|---|---|
| Annual licence fee, unlimited or limited | $235 |
| Homeowners’ Recovery Fund fee (unlimited or limited) | $15 |
| Application processing fee (new applicants, non-refundable) | $100 |
| Annual roofers licence fee | $150 |
| Exams, paid to Prov (both on one day) | $130 |
| Late renewal fee (on or after 1 December) | $50 |
The $235 licence fee and the $15 recovery fund fee are the “$250 a year” figure you will see quoted elsewhere. A new unlimited licence costs $350 in board fees plus $130 for the exams. See the cost of a contractor licence for how that compares with other states.
Applying for a home builders licence
Submit a notarised application with the processing fee and the licence fee. An LLC, corporation or partnership names a designated qualifying representative, an officer, partner, member or manager who meets the experience and exam requirements. It must also provide a Certificate of Compliance from the Department of Revenue, notarised minutes naming the qualifier, and, for out-of-state entities, a Certificate of Existence from the Secretary of State.
The Board estimates 3 to 4 weeks from receipt to approval. Your file must be complete, with test scores and the credit report or bond, at least seven days before a Board meeting to be reviewed at it.
Renewal and continuing education
Home builders licences are annual, for a licence year beginning on 1 January. Renewals open on 1 October, and any received on or after 1 December pay the $50 late fee. Each year, individual licensees and each company’s qualifying representative need six hours of continuing education from a Board-approved provider. Up to six hours can carry over to the next year.
The commercial general contractor licence
If you bid commercial, industrial or public work where the job is $100,000 or more, you need a licence from the Alabama Licensing Board for General Contractors. Swimming pool work over $5,000 also needs one, including residential pools. Since a 2024 amendment, subcontractors working under a general contractor on $100,000-plus jobs need a licence too. They pay half fees, need no exam and have no bid limit, but must be licensed before they start work.
A prime (general contractor) application needs:
- a $300 non-refundable application fee, by cashier’s check or money order;
- a financial statement prepared by a CPA (audited, reviewed or compiled), no more than a year old, showing at least $10,000 of net worth and working capital. Your bid limit is set from these figures;
- three references for commercial work, from licensed general contractors, architects or engineers;
- proof of current liability insurance naming the Board as certificate holder; and
- passing scores on the Alabama Business and Project Management exam and any trade exams for your classifications, administered by PSI.
The application must be received at least 30 days before a Board meeting. If you have held a general contractor licence for at least a year in Arkansas, Louisiana, Mississippi or Tennessee, you may qualify for reciprocity.
Penalties for working without a licence
Building homes without a required licence is a Class A misdemeanor, and the home builders board can fine up to $5,000 per violation and order the work stopped. The commercial rules are similar: unlicensed general contracting is a Class A misdemeanor with board fines of $500 to $5,000. On commercial work, an owner or architect who even considers a bid from an unlicensed contractor commits a Class B misdemeanor, which is why every bid and contract must show your licence number.
Licensed in another state?
If you hold a residential licence in Tennessee, South Carolina, Mississippi, Louisiana or North Carolina, the home builders board may exempt you from the Skills exam. You still take Business and Law. Include a copy of your out-of-state licence with your application. For how Alabama compares with its neighbours, see how to become a general contractor, or the guides for Georgia and Florida.
Step by step: unlimited home builders licence
- Confirm you need the home builders licence: residential, over $10,000, contracted directly with the homeowner.
- Register with Prov and pass the Skills and Business and Law exams.
- Order a credit report sent directly to the Board, and clear any collections or judgments over the limits.
- Set up your business entity and get its Department of Revenue Certificate of Compliance.
- File the notarised application with $100 processing and $250 licence and recovery fund fees.
- Get liability insurance so the written disclosure to your clients says yes, and workers’ compensation if you build new homes.
- Renew each year before 1 December with six hours of continuing education.
Frequently asked questions
How do I get a home builders license in Alabama?
For an unlimited licence, pass the Prov Skills and Business and Law exams, have a credit report sent to the Home Builders Licensure Board, and file a notarised application with the $100 processing fee and $250 in annual fees. The Board takes about three to four weeks.
How much work can you do without a license in Alabama?
For residential work, up to $10,000 per job including labour and materials, or $2,500 for roofing. For commercial work, under $100,000. Local business licences may still apply.
Is the Alabama home builders exam open book?
Yes. Both exams are open-book and timed: Skills has 80 questions in four hours, and Business and Law has 40 questions in two hours.
Can a general contractor build houses in Alabama?
Only with general contractor licence numbers 1 to 18907, issued before 1992. Holders of later general contractor licences need a separate home builders licence for residential work.
Do you need insurance for an Alabama home builders license?
Not to get the licence. But you must tell each homeowner in writing, before starting, whether you carry liability insurance. New-home builders must also carry workers’ compensation regardless of how many employees they have.
Sources
- Code of Alabama, Title 34, Chapter 14A (Home Builders Licensure Board law, as amended to 1 October 2025)
- Alabama Administrative Code, Chapter 465-X (Home Builders Licensure Board rules, effective 14 November 2025)
- Home Builders Licensure Board: applicant FAQ and Candidate Information Bulletin (Prov, September 2025)
- Code of Alabama, Title 34, Chapter 8, sections 34-8-1, 34-8-4, 34-8-6 and 34-8-7
- Alabama Licensing Board for General Contractors: prime application instructions
- Workforce Alabama: workers’ compensation insurance compliance
Verified against the HBLB, the Licensing Board for General Contractors and Title 34 on 20 October 2026. Fees, exam arrangements and rules change; confirm with the relevant Board before you apply. This page is research, not legal advice.
