During this past legislative term, the South Carolina General Assembly amended the Contractor's Licensing Act. The Act went into effect in April 1999. The Act is important because it changes a number of licensing categories based on project value, it strengthens the state's enforcement power, and it expressly regulates construction managers under the scope of the Act.
Some of the highlights of the amended act are as follows:
- Both general contractor's and mechanical contractor's licenses are divided into five groups. Each group has a separate ceiling for job value and a threshold for required owner net worth.
- Joint venture bids are allowed.
- The Act sets limits on who may obtain a building permit.
- For jobs where total construction cost exceeds $5,000.00, a general or mechanical contractor's license is required.
- The Act prohibits dividing projects to avoid licensure requirements.
- The enforcement power of the state Department of Labor, Licensing and Regulation is enhanced, and twenty-three new categories of offenses are established which subject contractors to disciplinary action by the Contractor's licensing Board.
- The Act restricts the use of a license for the benefit of more than one entity, and it establishes rules for 'qualifying parties' to use their licenses for the benefit of their employers.
- Unlicensed contractors are barred from bringing actions to enforce contracts. This does not change the law, but it codifies case law in South Carolina.
- The Act defines construction managers and includes a list of services normally provided by a construction manager, including the coordination, management or supervision of design, construction costs, scheduling, bid packaging and contractor selection.
- The Act establishes that construction managers must be either licensed contractors, architects or registered engineers. Architects or engineers who monitor the execution of design plans or perform work for owners as on-site representatives for construction quality control are not construction managers for purposes of the Act.
- The Act prohibits construction managers who are not architects or engineers from performing design work themselves. Entities performing construction themselves or holding construction contracts in their own name must be treated as general contractors and be licensed as such.
- The new statute provides a limited grandfather clause to allow entities to practice within their license classification under certain circumstances, without requiring the licensee to meet additional requirements imposed by the new act.
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