September 8, 1997
The Honorable Daniel F. McComas N.C. House of Representatives P. O. Box 2274 Wilmington, North Carolina 28402
RE: Advisory Opinion; General Contractors; Method to determine Appropriate Level of License to be issued to a General Contractor; N.C.G.S. § 87-10
Dear Representative McComas:
- N.C.G.S.
- § 87-10(a) establishes three levels of licensure for a general contractor. The three levels are: (1) unlimited license; (2) intermediate license; and (3) limited license. "The holder of an unlimited license shall be entitled to act as a general contractor without restriction as to value of any single project; the holder of an intermediate license shall be entitled to act as a general contractor for any single project with a value of up to five hundred thousand dollars ($500,000); the holder of a limited license shall be entitled to act as a general contractor for any single project with a value of up to two hundred fifty thousand dollars ($250,000); . . . ." (Emphasis added)
- N.C.G.S.
- § 87-10(a).
As it is used in N.C.G.S. § 87-10(a), you ask our opinion on "the meaning of the term ‘value’ as it applies to speculative construction in which the general contractor owns the land upon which the home or other building is built and then sells both the structure and the land to the purchaser."
For reasons which follow, we conclude that the term "value" should be limited to the cost of the home or other building, and should not include the cost of the land.
Article 1 of Chapter 87 applies to "general contractors," and includes §§ 87-1 through 87-15.2. A "general contractor" is defined as "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 thirty thousand dollars ($30,000) or more, or undertakes to erect a North Carolina labeled manufactured modular building meeting the North Carolina State Building Code . . . ."
N.C.G.S. § 87-1.
In Builder Supply v. Midyette, 274 N.C. 264, 270 (1968), the North Carolina Supreme Court explained that
(t)he purpose of Article 1 of Chapter 87 of the General Statutes, which prohibits any contractor who has not passed an examination and secured a license as therein provided from undertaking to construct a building costing $20,000.00 [now $30,000.00] or more, is to protect the public from incompetent builders.
In Sample v. Morgan, 311 N.C. 717 (1984), the North Carolina Supreme Court discussed the purpose of N.C.G.S. § 87-10(a). "Clearly the statute contemplates a differing level of expertise for those applying for and receiving a license in the three enumerated categories. In enacting this statute, the legislature reasonably determined that as the cost of a structure increased, there would be additional demands of expertise and responsibilities from the contractor." (Emphasis added) Id. at 722.
It is clear, therefore, that the Legislature’s focus when enacting N.C.G. S. §87-10(a) was on the value of the home or other building to be built by the contractor, and not on the value of the land upon which the home or other building is built.
Should you have any further questions, please feel free to contact us.
Andrew A. Vanore, Jr. Chief Deputy Attorney General