Minnesota requires a Department of Labor and Industry license for a person who contracts directly with an owner of residential real estate to provide work in more than one special skill, and for an owner who builds or improves homes for resale or speculation. Look up the current license before you sign a contract or let work begin.

License numbers begin with BC for a residential building contractor, CR for a residential remodeler, RR for a residential roofer, or MI for a manufactured home installer, followed by six digits. The official lookup is at dli.mn.gov/license-and-registration-lookup.

Who needs a license, and what do the letters mean?

Section 326B.805 requires a residential building contractor, residential remodeler, residential roofer, or manufactured home installer, as those terms are defined in section 326B.802, to be licensed by the commissioner, except as provided in subdivision 6. No person required to be licensed may act or hold out as one of those professionals for compensation without a license.

The DLI residential contractor FAQ states that any individual or company that contracts directly with an owner of residential real estate to provide work in more than one special skill needs a license, as does an owner who builds or improves homes for resale or speculation. A BC license allows the work a CR license allows, plus new construction. A CR license allows work on existing structures only. A roofer license allows roofing work only; it does not allow the holder to contract to install gutters, downspouts, soffits, fascia, or other residential work.

Examinations are fulfilled by a designated qualifying person. DLI explains that a BC license requires the qualifying builder exam, a CR license the qualifying remodeler exam, and an RR license the qualifying roofer exam. Qualifying-person registration numbers begin with QB, QC, QR, or QI and are not themselves a business license. Search the company license record, not only a personal registration number.

Section 326B.805, subdivision 6, lists exemptions. They include an employee of a licensee performing work for the licensee; an owner who builds or improves residential real estate that the owner occupies, will occupy, or will retain for rental, unless the owner is building or improving for resale or speculation (with a presumption of speculation if the owner constructs or improves more than one property within any 24-month period, unless the properties will be retained for rental); a person whose total gross annual receipts for specialty skills that would require licensure do not exceed $15,000, if the person obtains a certificate of exemption; a plumber, electrician, or other statewide-licensed professional when engaged in that licensed activity; and specialty contractors who provide only one special skill. The $15,000 exemption must be renewed with an affidavit, and a person who exceeds $15,000 must immediately surrender the certificate and apply for the appropriate license.

That owner-occupant path is not a way to skip credentials for a hired contractor. If you are hiring someone, ask who will be named on the permit and whether that person holds the required DLI license.

How do you look up a license, and what is the Contractor Recovery Fund?

Use the official DLI license and registration lookup, continue as a guest, and search by company name or the full license number. DLI also states that license numbers must appear on business cards, contracts, mechanics-lien notices and statements, and all other advertising, including websites.

The Contractor Recovery Fund, described in the official FAQ and in section 326B.89, replaces bonding requirements for these licensees. The fund reimburses consumers who have suffered a financial loss as a result of a licensed residential building contractor or residential remodeler who has engaged in fraudulent, deceptive, or dishonest practices, converted funds, or failed to perform. No more than $550,000 per licensee may be paid from the fund. After a payment is made, the license is automatically suspended. Reinstatement requires repayment in full, plus interest, of twice the amount paid from the fund, and a surety bond of at least $40,000.

A person who performs unlicensed work as a residential building contractor or remodeler when a license is required is guilty of a misdemeanor, DLI states, and additional civil penalties may apply. Local building permits and inspections still apply. Keep a copy of the lookup result, the signed contract, and the permit with your project file. A companion article explains the written-contract rule in section 326B.809.

FAQ

What license numbers should I look for?

DLI states that business license numbers begin with BC, CR, RR, or MI, followed by six digits. Qualifying-person numbers beginning with QB, QC, QR, or QI are registrations, not the company license.

Is an owner who works on their own home always exempt?

An owner who occupies or will occupy the home, or will retain it for rental, is exempt, but that exemption does not apply to an owner who constructs or improves for resale or speculation. Building or improving more than one property in 24 months is presumed to be speculation unless the properties will be retained for rental.

What is the $15,000 figure?

A person whose gross annual receipts for specialty skills that would require licensure do not exceed $15,000 may qualify for a certificate of exemption, with an affidavit, under section 326B.805, subdivision 6.

How much can the Contractor Recovery Fund pay per licensee?

DLI's official FAQ states that no more than $550,000 per licensee may be paid from the fund.

If you are hiring work on a Minnesota house, talk with a licensed local agent about insurance questions, and confirm a current DLI residential contractor, remodeler, or roofer license before work starts.

Sources: Minnesota Department of Labor and Industry, License and Registration Lookup; Minnesota Department of Labor and Industry, Residential Contractor FAQs; Minnesota Statutes section 326B.805; Minnesota Statutes section 326B.89.

Minnesota section 326B.809 requires licensed residential contractors to put customer agreements in writing, including proposals, estimates, bids, quotations, contracts, purchase orders, and change orders. The agreement must describe the work, the materials or standard features, and the total contract price.

Before entering into an agreement, the licensee must give the prospective customer written performance guidelines for the services to be performed. Those guidelines must also be included or incorporated by reference in the agreement. All agreements shall be signed and dated by the licensee and the customer. The licensee must provide, at no charge, a signed and dated copy at the time both parties sign, including agreements, performance guidelines, and mechanic's lien waivers.

What should a written Minnesota home improvement contract include?

Use section 326B.809 as the checklist, and add the practical details that prevent later disputes:

• The legal name of the licensed company and the DLI license number, which must appear on contracts and advertising
• A detailed summary of the work, room by room or trade by trade
• Materials or standard features, including product names or grades where they matter to the price
• The total price, or the hourly or unit basis if the job is not a fixed price
• Written performance guidelines, given before you sign and included or incorporated in the contract
• Start and completion timing if you have agreed on dates
• How change orders will be written and priced
• Mechanic's lien waiver documents, provided at no charge when they are signed

If a salesperson wants you to sign a blank or incomplete proposal, wait until the required terms are on the page. A change in the work or the price should appear in a written, signed change order, because the statute lists change orders among the agreements that must be in writing.

Confirm the company's license in the official DLI lookup, as the companion licensing article explains. License numbers begin with BC, CR, RR, or MI, followed by six digits, and must appear on contracts. A qualifying-person registration number is not a substitute for the company license. If the person at the kitchen table cannot show a current BC, CR, or RR license for the legal name on the proposal, pause.

The Contractor Recovery Fund, also described in that companion article, may reimburse certain losses caused by a licensed residential building contractor or remodeler who engaged in fraudulent, deceptive, or dishonest practices, converted funds, or failed to perform, subject to the official fund limits, including a $550,000 per-licensee cap published in DLI's FAQ. A written, signed contract and a dated copy of the performance guidelines are the records that support a later claim, a DLI complaint, or a recovery-fund process.

Local building permits and inspections still apply. Ask who will pull the permit and whether subcontracted electrical or plumbing work will be done by people licensed for those trades. An electrician or plumber acting within that statewide license is on a different licensing path than the residential contractor license, under the exemptions in section 326B.805, but the written home-improvement agreement with the company you hired should still name the work clearly.

What if the work is late, incomplete, or not as written?

Put any complaint in writing to the company, attach the signed contract, change orders, and photos, and keep a copy. DLI publishes consumer information on residential building contractor complaints and enforcement actions. A person who performs unlicensed work when a license is required is guilty of a misdemeanor, and additional civil penalties may apply.

Do not make final payment, or sign a completion document, until the work matches the written agreement and required inspections are done. The statute does not state a general one-third deposit cap, and this article does not invent one. It does require a written, signed contract before the relationship is treated as a completed agreement, and it requires a free signed copy at signing.

If a mechanics lien is later claimed, the written waivers you were given, and the license number on the contract, will matter. Take photos before work starts, and date each change-order page. If the crew is asked to add work on the spot, stop and get a written, signed change order before the extra work proceeds. That habit is the practical side of the statute's requirement that change orders be in writing.

A licensed local agent can also review whether contractor insurance, homeowners coverage, or a recovery-fund claim is the better path for a particular loss, but the first step is the written agreement required by section 326B.809.

FAQ

Do estimates and change orders have to be in writing?

Yes. Section 326B.809 lists proposals, estimates, bids, quotations, contracts, purchase orders, and change orders as agreements that must be in writing and must contain the required terms.

What has to be in the contract?

A detailed summary of the services, a description of specific materials or standard features, and the total contract price or the basis for calculating the price, plus written performance guidelines included or incorporated by reference.

Do I get a copy?

Yes. The licensee must give you, at no charge, a signed and dated copy of the agreement, performance guidelines, and mechanic's lien waivers at the time the documents are signed and dated.

Is there a statutory cap of one-third as a down payment?

Section 326B.809 does not state a general one-third deposit cap. It does require a written, signed agreement with a stated price or pricing basis.

If a home improvement contract, a deposit, or a late project has you unsure about the next step, talk with a licensed local agent about related insurance questions, and use the official written-contract rule in section 326B.809.

Sources: Minnesota Statutes section 326B.809; Minnesota Department of Labor and Industry, Residential Contractor FAQs; Minnesota Statutes section 326B.805.