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Licenses

Do all MH distributors need to have a contractor’s license? Can a distributor contract with a licensed installer if the distributor does not have a contractor’s license? Or does the customer need to work directly with the installer and pay the invoice directly? In California, the code has an exemption that states that if the equipment is not part of the structure, then a contractor’s license is not needed. If that is so, then why do all the cities require that a contractor’s license number be written on the application?
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Jeff Andrews, Elite Storage Solutions (Irvine, CA)

Jack Phelan: There are no national requirements for MH companies to have a contractor’s license. The requirements are established on a state-by-state basis. Whether or not a distributor can contract with a licensed contractor is also established on a state-by-state basis. In some states, you are not even allowed to sell equipment unless you have a license in that state.

Scott Hennie: Permits and licenses have become a major issue over the past 18 months. Earlier this year, MHEDA presented a Webinar on this topic and I’m sure you can access the archives to see the material.

We execute projects throughout the United States, Canada and Mexico and have found that the requirements are not only state-mandated, but even down to the city level. As a practice, we contact the city in which we are doing the project to determine the exact requirements and expectations. Even with that, we have had projects where the requirements have changed mid-stream! Generally, however, this is what we have found: As the Integrator, we do not have to have a contractor’s license, as long as our installer is contracted in the state and city that we are performing the work. The installer will then pull any permits required for the installation, but we provide the information and details to secure the permits.

If we are billing the job, we do have to be licensed to do business in the state where the job is being invoiced. This typically means that we are an agent to collect sales tax in that state.

There are some states where we are required to have a contractor’s license. We can secure a license fairly easily, but we have to be very clear on what type of equipment we are installing. At first pass, the governing body wants to “lump” us into a General Contractor category, which is very encompassing. Once they understand what we are doing, we are then typically categorized as a “Fixture Contractor.”

Steve Strifler: Licensing requirements are controlled at the state level. For example, Arkansas re-quires a contractor’s license for projects over $20,000 which involve labor, but Texas has no contractor licensing requirements for material handling distributors. Check the requirements for the state in which you are working.

Licensing requirements when contracting with a licensed installer also vary by state. In Arkansas, you must have a contractor’s license regardless of whether or not you subcontract installation to an installer who has a license. In California, you may perform installations by subcontracting them to a licensed subcontractor. Having the customer work directly with the installer and pay the invoice directly is an option because contractor’s licenses are generally used to address issues involving labor on a jobsite.

As for the code exemption in California, I suggest getting input from distributors who do the majority of their business in that state. MHEDA’s Membership Directory contains a geographical listing of members located there.

Material Handling Equipment Distributors Association

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