Application of General Contractors’ Licensing Statute

Subject:

Requested By: Charles L. Moore Gaston County Attorney

Question: Are builders required to be licensed as General Contractors under G.S. § 87-1 when they erect apartment buildings valued at over $ 30,000 on their own property for lease or rent to the General Public.

Conclusion: No.

The definition of General contractors is set out in G.S. § 87-1 as follows:

"For the purpose of this Article any person or firm or corporation who for a fixed price, commission, fee or wage, undertakes to bid upon or to construct or who undertakes to superintend or manage, on his own behalf or for any person, firm or corporation that is not licensed as a general contractor pursuant to this Article, the construction of any building, highway, public utilities, grading or any improvement or structure where the cost of the undertaking is thrity thousand dollars ($ 30,000) or more, shall be deemed to be a "general contractor" engaged in the business of general contracting in the State of North Carolina."

The statute contains the following exception:

"This section shall not apply to any person or firm or corporation who constructs a building on land owned by that person, firm or corporation when such building is intended for use by that person, firm or corporation after completion."

You state in your letter that building permits are being picked up by unlicensed builders who own the land on which the construction is to take place. Upon securing the building permit, apartment complexes are constructed on the property by the unlicensed builder and after completion are held out for lease and use by the general public. You have asked this office if this type of activity falls within the exception of G.S. § 87-1 which is set out above.

Our North Carolina Supreme Court has dealt with a similar problem in interpreting an exemption contained in the statutes governing the practice of architecture in North Carolina which allowed an individual to design plans for a "building for himself" without being licensed as an architect by The Board of Architecture. Board of Architecture v. Lee, 264 NC 602, 611, 142 SE 2d 643 (1965). The exception contained § 83-12 and now G.S. § 83A-13(d) provides that an unlicensed individual could make plans and design a building for himself without being licensed as an architect in North Carolina. The Architecture Board contended that while an individual could design and plan a building he was going to use himself, he could not make plans for a building for lease or that was to be used by the public after completion. Our Supreme Court rejected this interpretation and held it untenable stating". . .

there is nothing in the express exception in G.S. 83-12 to justify such a contention. The words "buildings for himself" contained in the express statutory exception are broad and comprehensive, State v. Cuthrell, 235 N.C. 173, 69 S.E. 2d 233; 12 C.J.S., Building, pp. 380-81, and contain no limitation of any kind

. . .

Obviously, a building may be erected for any one or more of many purposes. It seems plain that the statutory exception contemplates possession by the designer of the building for whatever lawful purpose he may choose. If the General Assembly had intended the statutory exception to be limited to buildings actually occupied by the designer, and not for lease and use by the public, it could quite easily have said so. The General Assembly in its wisdom and discretion did not so limit the statutory exception. The General Assembly having thus formally and clearly expressed its will, the Court is without power to interpolate or superimpose conditions and limitations which the statutory exception does not of itself contain."

Under the exemption contained in G.S. § 87-1, an unlicensed builder may construct a building on his own land when it is ". . . intended for use by that person, firm or corporation after completion." As stated in the Lee case "use" would mean any lawful purpose including lease and use by the public. If the General Assembly had intended that the building actually be occupied by the builder or immediate members of his family and not for lease, they could have quite easily have said so. Previous opinions by this office have also supported the proposition that a person, firm or corporation may construct a building on land owned by that person, firm or corporation and use it for any lawful purpose including leasing and use by the public without being licensed as a General Contractor under G.S. § 87-1.

In Moon v. Goldstein, 69 Cal App. 2nd Supp. 800, 158 P2d 1004 (1945) cited in your letter the California Legislature made it clear that an owner who builds on his own land a structure not for his own occupancy was regarded by law as a General Contractor with certain exceptions not pertained to this opinion. (Emphasis added) The same was true of the New Jersey Architecture Law N.J. Statute Annotated § 45:3-10 reviewed in the Lee case, which provided that an individual could design building to be constructed by himself on his own property provided it would be occupied by himself or members of his own family. (Emphasis added)

G.S.

§ 87-1 has no such limitation and it is the opinion of this office that the exemption contained in G.S. § 87-1 allows an unlicensed builder to construct rental units on his own property and lease them to the general public without being licensed as a general contractor under

G.S.

§ 87-1. LACY H. THORNBURG

Attorney General

James E. Magner, Jr. Assistant Attorney General