Rehabbing & General Contractor Licenses in Georgia

8 Replies

I am interested to know if most seasoned rehabbers out there require a Contractor you wish to contract to provide their General Contractor's license information and federal tax ID as part of the contract? The reason I ask is that I assumed this would be a no-brainer - anyone that is rehabbing and pulling Permits in Georgia must be licensed; however, I am getting some pushback. Am I talking to unscrupulous contractors, or is there a valid reason not to provide this information? Thank you!

Originally posted by @David Begley:

 Am I talking to unscrupulous contractors?

Yes.

Edit: Hit enter too fast.

Bottom line is that you should be able to both get the contractor's license number and verify it against the Georgia Secretary of State website. 

http://verify.sos.ga.gov/websites/verification/

This is true for HVAC (Force Air), plumbing, electrical, and general contractors. There is NO reason not to give you the license number immediately. 

Now to be fair, if someone wanted my EIN right off the bat I'd probably tell you that unless you're issuing me credit, you don't need that information.

Permits aren't always necessary and sometimes there is the option to pull them yourself. If you're dealing with an unlicensed contractor, make sure each contract amount is under a certain amount ($1000 in VA) and that you don't pay for anything in advance. I would also physically supply all materials at least until you gain more trust in them.

Some are willing to work for a daily rate under 200-300 and are very skilled but I would be there to make sure they work a full day.

Originally posted by @Jassem A.:

Permits aren't always necessary and sometimes there is the option to pull them yourself. If you're dealing with an unlicensed contractor, make sure each contract amount is under a certain amount ($1000 in VA) and that you don't pay for anything in advance. I would also physically supply all materials at least until you gain more trust in them.

Some are willing to work for a daily rate under 200-300 and are very skilled but I would be there to make sure they work a full day.

In Georgia, you can only pull a permit yourself if you are the homeowner and will be occupying the house when complete. A contractor who asks an investor to pull the permits is likely unlicensed and is creating an enormous liability issue for the investor... not to mention an illegal situation.

Originally posted by @Aaron McGinnis:
Originally posted by @David Begley:

 Am I talking to unscrupulous contractors?

Yes.

Edit: Hit enter too fast.

Bottom line is that you should be able to both get the contractor's license number and verify it against the Georgia Secretary of State website. 

http://verify.sos.ga.gov/websites/verification/

This is true for HVAC (Force Air), plumbing, electrical, and general contractors. There is NO reason not to give you the license number immediately. 

Now to be fair, if someone wanted my EIN right off the bat I'd probably tell you that unless you're issuing me credit, you don't need that information.

 Thank you for the reply Aaron, that was my thought as well.  With respect to the EIN, I would only request that for W-9 information.  I was under the impression I would need to file a 1099-MISC for any contractor I pay in excess of $600 during the year.  

If the person is not a corporation, that is correct.

For example - we operate as a C-type corporation. I tell people that they're welcome to my W9 and they can send us a 1099 if it makes them feel good, but my accountant does not need it and neither does the IRS.

The Georgia Sec. of State maintains lists of corporations along with contractors. It's very easy to verify that information.

Originally posted by @Aaron McGinnis:

If the person is not a corporation, that is correct.

For example - we operate as a C-type corporation. I tell people that they're welcome to my W9 and they can send us a 1099 if it makes them feel good, but my accountant does not need it and neither does the IRS.

The Georgia Sec. of State maintains lists of corporations along with contractors. It's very easy to verify that information.

Got it! Thanks Aaron, I was under the assumption I needed to do the W-9 and 1099 if the Contractor is an LLC too. This is good to know that collecting and reporting that information isn't required when contracting with an LLC.

I didn't say LLC.... I said Corporation. I believe LLCs you still need to run a W9, but I'm not an accountant.

Originally posted by @Aaron McGinnis:

I didn't say LLC.... I said Corporation. I believe LLCs you still need to run a W9, but I'm not an accountant.

 Oh okay, I will check with my accountant.  Thank you.  

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