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Quick answer
Alabama issues a general contractor license through the Alabama Licensing Board for General Contractors for undertakings costing $100,000 or more, and a residential home builders license through the Home Builders Licensure Board. Prime contractors take a Business and Law Exam administered by PSI. As of October 3, 2026, the prime contractor application fee is $300 per application.
Alabama · Contractor licenseVerified 2026-10-04
State license
General contractor license; residential home builders license (residential and commercial)
Alabama's Licensing Board for General Contractors licenses general contractors, defined as those who undertake to construct or superintend or engage in construction work where the cost of the undertaking is $100,000 or more; the chapter exempts the construction or repair of any residence or private dwelling or any residential swimming pool. The Home Builders Licensure Board licenses residential home builders annually.
Prime contractors: a Business and Law Exam administered by PSI; the prime application instructions also name the Alabama Business and Project Management exam and any trade examination(s) required by the board. A subcontractor is not required to sit for any examination before being licensed; Home builder Unlimited License: pass the Alabama Home Builders Exams; the passing scores are 70 on the Alabama Business & Law Exam and 66 on the Alabama Skills Exam
General contractor license; residential home builders license (residential and commercial). Alabama's Licensing Board for General Contractors licenses general contractors, defined as those who undertake to construct or superintend or engage in construction work where the cost of the undertaking is $100,000 or more; the chapter exempts the construction or repair of any residence or private dwelling or any residential swimming pool. The Home Builders Licensure Board licenses residential home builders annually.
Threshold. General contractor: the cost of the undertaking is $100,000 or more. The general contractor definition also covers swimming pool work where the cost of the undertaking exceeds $5,000. Residential home builder: the cost of the undertaking exceeds $10,000, and the term includes a residential roofer when the cost of the undertaking exceeds $2,500.
undertakes to construct or superintend or engage in the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving, or project or any improvement in the State of Alabama where the cost of the undertaking is one hundred thousand dollars ($100,000) or more.
Ala. Code § 34-8-1(a) · Official text · retrieved 2026-10-03
(a) The following shall be exempted from this chapter:
Ala. Code § 34-8-7(a) · Official text · retrieved 2026-10-04
(2) The construction or repair of any residence or private dwelling or any residential swimming pool.
Ala. Code § 34-8-7(a)(2) · Official text · retrieved 2026-10-03
All residential home builders shall be required to be licensed by the Home Builders Licensure Board annually.
Ala. Code § 34-14A-5(a)(1) · Official text · retrieved 2026-10-03
(6) A general contractor license and license number issued by the board to subcontractors shall denote subcontractor status.
Ala. Code § 34-8-7(b)(6) · Official text · retrieved 2026-10-04
(a) Except as provided in Section 13A-9-111.1, any person who undertakes or attempts to undertake the business of residential home building without holding a current and valid residential home builders license, issued by the Home Builders Licensure Board, as required by this chapter, or who knowingly presents to, or files false information with the board for the purpose of obtaining the license or who violates any law or code adopted by a county commission under this chapter shall be deemed guilty of a Class A misdemeanor.
Ala. Code § 34-14A-14(a) · Official text · retrieved 2026-10-04
Any person who engages in the construction, superintending of the construction, repair, or renovation of any swimming pool in the State of Alabama, where the cost of the undertaking exceeds five thousand dollars ($5,000), shall be deemed to have engaged in the business of general contracting in the State of Alabama and shall be subject to this chapter.
Ala. Code § 34-8-1(b) · Official text · retrieved 2026-10-04
of any residence or structure that is not over three floors in height and that does not have more than four residential units, or the repair, improvement, or reimprovement thereof, to be used by another as a residence when the cost of the undertaking exceeds ten thousand dollars ($10,000).
Ala. Code § 34-14A-2(16) · Official text · retrieved 2026-10-03
Notwithstanding the foregoing, the term includes a residential roofer when the cost of the undertaking exceeds two thousand five hundred dollars ($2,500).
Ala. Code § 34-14A-2(16) · Official text · retrieved 2026-10-04
License classes
Class
Scope
Source
Prime contractor (bid limit A, B, C, D, E or U)
Maximum bid limit on any one single contract: A not to exceed $100,000.00; B not to exceed 250,000.00; C not to exceed 500,000.00; D not to exceed 1,000,000.00; E not to exceed 3,000,000.00; U unlimited
Undertakings of $100,000 or more under contract to a general contractor or another subcontractor; no bid limits; the general contractor license and license number the board issues to a subcontractor denote subcontractor status
Residential home builders license: Unlimited, Limited and Roofers
Residential home builders; the board may issue licenses that vary in scope of work authorized, including licenses without limitation and with limitation
The following letter symbols indicate the maximum amount bid limits allowed a licensee on any one single contract undertaking: A - Not to exceed$100,000.00 B - Not to exceed 250,000.00 C - Not to exceed 500,000.00 D - Not to exceed 1,000,000.00 E - Not to exceed 3,000,000.00 U - Unlimited
Ala. Code § 34-8-2(a) · Official text · retrieved 2026-10-04
(c) For the purpose of this chapter, a “subcontractor” is defined to be one who constructs, superintends, or engages in the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving, or project or any improvement in the State of Alabama where the cost of the undertaking is one hundred thousand dollars ($100,000) or more under contract to a general contractor, as defined in subsection (a), or another subcontractor.
Ala. Code § 34-8-1(c) · Official text · retrieved 2026-10-04
(2) No bid limits shall be established for a subcontractor.
Ala. Code § 34-8-7(b)(2) · Official text · retrieved 2026-10-04
The board may issue licenses that vary in scope of work authorized, including, but not limited to, licenses without limitation and with limitation.
Ala. Code § 34-14A-5(a)(2) · Official text · retrieved 2026-10-03
A. To receive an Unlimited License, take and pass the Alabama Home Builders Exams.
B. To receive a Roofers License, request that a $10,000 License/Permit Bond naming the Board as the Obligee be submitted directly to the Board by the Surety issuing the bond.
B. To receive a Limited or Roofers License, applicant must provide a copy of a currently held, or held on or before one (1) year prior to the date of the application, business or occupational license as a contractor issued by a municipality, township, or county in the state.
Exam. Home builder Unlimited License: pass the Alabama Home Builders Exams; the passing scores are 70 on the Alabama Business & Law Exam and 66 on the Alabama Skills Exam. Source: How to Get Licensed, Home Builders Licensure Board
Bond. Home builder Roofers License: a $10,000 License/Permit Bond naming the board as obligee, submitted directly to the board by the surety. Source: How to Get Licensed, Home Builders Licensure Board
Other. Home builder Limited or Roofers License: a copy of a business or occupational license as a contractor issued by a municipality, township or county in the state, currently held or held on or before one year prior to the date of the application. Source: How to Get Licensed, Home Builders Licensure Board
All primes must take a Business and Law Exam administered by PSI.
A. To receive an Unlimited or Limited License, request that a current credit report on the individual or business who is making application be sent to the Board directly from a credit-reporting agency.
Term and renewal. General contractor: the certificate of authority expires 12 months following its issuance or renewal and becomes invalid on that date unless renewed. Residential home builders are licensed annually, and the annual license fee covers 12 months beginning January 1.
The certificate of authority to engage in the business of general contracting in the State of Alabama shall expire 12 months following its issuance or renewal and shall become invalid on that date unless renewed.
Ala. Code § 34-8-2(b) · Official text · retrieved 2026-10-04
The annual license fee shall be for a period of 12 months beginning January 1 of each year.
Ala. Code § 34-14A-5(b)(3) · Official text · retrieved 2026-10-03
Contracting without a license
Engaging in the business of general contracting without being duly authorized, except as the chapter provides, is a Class A misdemeanor, and in a suit for an injunction the board may demand a fine of up to $5,000 plus costs and attorney fees for each offense. Except as provided in Section 13A-9-111.1, undertaking or attempting to undertake the business of residential home building without a current and valid residential home builders license is a Class A misdemeanor, and a residential home builder without the required license may not bring or maintain an action to enforce a residential home building contract entered into in violation of the chapter.
Any person, firm, or corporation not being duly authorized who shall engage in the business of general contracting in this state, except as provided for in this chapter,
Ala. Code § 34-8-6(a) · Official text · retrieved 2026-10-03
shall be deemed guilty of a Class A misdemeanor and for each offense for which he or she is convicted shall be punished as provided by law.
Ala. Code § 34-8-6(a) · Official text · retrieved 2026-10-03
In the suit for an injunction, the board may demand of the defendant a fine of up to five thousand dollars ($5,000) plus costs and attorney fees for each offense.
Ala. Code § 34-8-6(c) · Official text · retrieved 2026-10-03
(d) A residential home builder, who does not have the license required, shall not bring or maintain any action to enforce the provisions of any contract for residential home building which he or she entered into in violation of this chapter.
Ala. Code § 34-14A-14(d) · Official text · retrieved 2026-10-04
The general contractor definition reaches construction work on a project or improvement in the state where the cost of the undertaking is $100,000 or more [1]. Swimming pool work counts as general contracting when the cost of the undertaking exceeds $5,000 [1]. Separately, the chapter lists among its exemptions the construction or repair of any residence or private dwelling or any residential swimming pool [2].
The home builder statute has its own reach. Its definition of a residential home builder applies when the cost of the undertaking exceeds $10,000 [5], and the term also includes a residential roofer once the cost of the undertaking exceeds $2,500 [5].
Bid limits, subcontractors and home builder tiers
Prime contractors carry a letter symbol that caps what they may bid on any one single contract, with U meaning unlimited [6]. A subcontractor works on undertakings of $100,000 or more under contract to a general contractor or another subcontractor [1]. No bid limits apply to a subcontractor, and the general contractor license and license number the board issues to a subcontractor denote subcontractor status [2].
On the residential side, the Home Builders Licensure Board may issue licenses that vary in the scope of work they authorize, including licenses with and without limitation [3].
What each applicant brings
For a prime contractor, the board names a Business and Law Exam administered by PSI [7], and its prime application instructions also name the Alabama Business and Project Management exam and any trade examinations the board requires [9]. The chapter sets no examination for a subcontractor before licensing [2]. Prime applicants also show a minimum net worth and working capital of $10,000.00 [9] and submit proof of current liability insurance with the application [9].
The home builder Unlimited License calls for passing the Alabama Home Builders Exams, with passing scores of 70 on the Alabama Business & Law Exam and 66 on the Alabama Skills Exam [8]. Unlimited and Limited applicants have a credit-reporting agency send a current credit report directly to the board [8]. A Roofers License applicant has the surety submit a $10,000 License/Permit Bond naming the board as obligee [8]. Limited and Roofers applicants also provide a copy of a business or occupational license as a contractor issued by a municipality, township or county in the state, held now or on or before one year prior to the application date [8].
Application cost and renewal cycle
As of October 3, 2026, the prime contractor application fee is $300 per application [7]. A subcontractor applies at a lower fee [7], and primes and subcontractors renew at different fees [10].
The general contractor certificate of authority expires 12 months following its issuance or renewal and becomes invalid on that date unless renewed [6]. Home builders run on a calendar cycle instead: the annual license fee covers a period of 12 months beginning January 1 of each year [3].
Penalties written into the two chapters
Under the general contractor chapter, engaging in the business of general contracting without being duly authorized, except as the chapter provides, is a Class A misdemeanor [11]. If the board sues for an injunction, it may demand a fine of up to $5,000 plus costs and attorney fees for each offense [11].
The home builder chapter, except as provided in Section 13A-9-111.1, also makes it a Class A misdemeanor to undertake or attempt to undertake residential home building without a current and valid residential home builders license [4]. A residential home builder without the required license may not bring or maintain an action to enforce a residential home building contract entered into in violation of the chapter [4].
