Construction Business License Issues

Transcription

1 Construction Business License Issues Matthew C. Thomas Open For Business Program Coordinator Planning & Development City of Rock Hill Overview Development and construction are a lengthy process, and the business license official must be ready to determine which businesses need a license at every point along the way. The administration of a jurisdiction s business license ordinance will also require coordination with the plan review and permitting departments of that jurisdiction, code enforcement, and the utility provider. The City of Rock Hill includes business licensing under the Planning & Development Department which helps to bring continuity to this process. Development Stages A typical project in The City of Rock Hill looks like this: Propose Review Permit Inspect Occupy There are numerous entities to be licensed (some more obvious than others) along this process. Let s look further into each of them. 1

2 Who needs a business license? Property Owner(s) (sometimes different owners of building and land) Developer (often the property owner, but may be held under a different entity) Architect and/or Engineer for building shell plans General Contractor for shell construction Sub-Contractors for shell construction Architect and/or Engineer for building upfit plans General Contractor for upfit construction Sub-Contractors for upfit construction Who needs a business license? (cont d) Special Inspectors Property Manager Home Owners Association Management Company (The HOA itself usually doesn t need a license.) Business Tenant Business Subtenant Property Owner/Developer The developer is usually the property owner, though the real estate may be held under a different entity (usually an LLC created for the sole purpose of holding the real estate). We require the LLC to obtain a license in most cases. We require the developer to obtain a license before plans can be submitted. We require the real estate holding company (if different) to obtain a license before temporary power is released or before a business occupies the building. 2

3 Architect, Engineer, or Other Design Professional Professional drawings for civil and construction plans usually bear the seal and contact information of the designer. These drawing often include other helpful information that might show other businesses or third parties that should have a license. These businesses must have a business license before their plans will be approved. See next slide for example This is an example of project contact information from a set of sealed plans. General and Sub- Contractors General Contractors and their sub-contractors are separate legal entities. The City of Rock Hill requires that GCs pay for a business license on the entire contracted amount of their job; sub-contractors are required to pay for a business license on their contracted amount with the GC. While this is often labeled as double taxation, it is treated the same as other industries that outsource certain portions of their work. Business Licenses for the GC and their subs must be obtained prior to the issuance of a building permit. 3

4 Special Inspectors Certain development projects require inspections that are beyond the expertise of our building inspectors (usually highly technical or specialized aspects of certain jobs). These are thirdparty companies that are hired to complete particular inspections on a job site. They are required to obtain a business license for the work they do in our jurisdiction. Special inspectors are required to obtain a business license before their special inspection can be scheduled. Building Shell vs. Building Upfit It is very common for multi-tenant commercial buildings to be developed as spec buildings. The developer builds the building on the speculation that it will be purchased or rented by businesses. In these cases, the shell and upfit are usually treated as separate projects as they often involve separate design professionals and contractors. The completion of the shell and upfit can sometimes be years apart. Property Managers / HOA Managers Property managers are often difficult to identify because they have authority to speak on behalf of the property owner for certain types of requests. The property manager will usually request utilities for vacant spec properties, but they will sometimes request them to be moved into the property owner s name. It is important to understand with whom you are speaking when a utility request is being made. Property Managers must have a business license before their request is fulfilled (utilities, sign permit, etc.) 4

5 Business Tenant New business occupants of commercial buildings are very simple to identify and to require to be licensed. The City of Rock Hill requires that new businesses obtain a Zoning and Building Code Compliance Certificate and Business License before occupying a building. These are also required prior to establishing utility service in business s name. A business license is required prior to occupancy, utility transfer, sign permits, etc. Having the business license official as a reviewer on sign permit applications has turned out to be really helpful for us. Business Subtenant Business subtenants are often difficult to identify if a utility transfer request is not made. Sign Permit applications and annual fire inspections are two of our most commons means of enforcement for subtenants to obtain a license. REQUIRING COMPLIANCE and Difficult Applications 5

6 Ways The City of Rock Hill Requires Compliance Building inspectors issue Stop Work Notices for unpermitted work. This requires the customer to apply for a permit, submit plans, etc. If a third-party business is submitting plans on behalf of the developer, design professional, or contractor, that company must obtain a business license before the plans can be reviewed. Plans will not be approved until the developer and design professional are licensed. A permit will not be issued until the contractor and all of their sub-contractors are licensed (annual or per-job). If any business license-related issues arise after the permit is issued (GC changes subcontractor, valuation of the job increases, etc.), the GC may not request inspections until the licensing issue has been resolved. Ways The City of Rock Hill Requires Compliance (cont d) Any business requesting utilities will likely be required to obtain a business license. An exception would be companies like Ecova, Schneider Electric, etc. who simply manage utility accounts for (usually large) businesses as a third-party but usually never step foot into our jurisdiction. Signals of New Business Activity Requests for utility service (Ex. OfferPad) Requests for a new meter (Commercial or Residential) Annual fire inspections Change of mailing address (usually indicates a change of ownership) Sign permit applications Stop Work Notices 6

7 Difficult Applications Lowe s or Home Depot sub-contractors Master-metered buildings Commercial buildings where the landlord pays for utilities Home warranty companies Landscapers, painters, floor covering, and other trades that don t require a permit Third-party waste management companies House flippers who live in their home while flipping (Owner-Builder Affidavit required to be filed with their deed). Construction Business License Renewals Annual License (required for Contractors based inside city limits) Renewed annually by April 30 or at the time of issuance of first permit for the year. Gross revenue verified against valuation of permits obtained from previous calendar year (must be equal or greater). Per-Job License (outside city contractors only) Verified against the written contract for that job. SPECIAL THANKS! Niki Clevenger Permit Technician, City of Rock Hill Cinnamon Hairston Business License Staff, City of Rock Hill 7

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