Hired Help – What Are General Contractors?
A general contractor, principal contractor or developmental contractor is ultimately responsible for the management of trades and vendors, the management of information for all involved parties during the course of a construction project, and the coordination of details for completion of the project on time and within budget. General contractors have many of the same responsibilities as managers in other types of business. In general, they must establish a contract with a client that details the scope of work to be performed; prepare the contractual agreement outlining fees and responsibilities; hire and train staff to carry out contracted work; maintain proper records of all work performed; and develop and implement plans to achieve successful completion of the project. This type of general contractor also must perform the necessary inspections on the construction site to ensure compliance with local and national building codes. In addition, a general contractor should be in close contact with the city, county, state, and federal governments regarding permits, inspections, and approval requirements for projects of various sizes and complexities.
There are several different categories of general contractors. The most common are builders and developers, who oversee the construction of buildings. Other general contractors specialize in certain aspects of the construction process, such as plumbing, structural steel, fire prevention, and electrical wiring. Still other general contractors specialize in construction management, such as property management, real estate accounting, and building maintenance. No matter what type of general contractor is performing a specific job, all require a thorough knowledge of building codes, the procedures required by local governments, and the tools and equipment required to perform their jobs.
When a person contracts with a general contractor to complete construction projects, he or she is hiring the contractor to perform work on his or her behalf to accomplish pre-determined specifications. This typically includes the hiring of workers, materials, and the completion of specific tasks assigned to the contractor. The ultimate responsibility for these tasks lies with the owner of the building or home that has been targeted for construction. However, when the project is large or complicated, the owner is responsible for providing workers, materials, and the necessary tools to accomplish the project. In this case, the general contractor is the one who performs tasks that an owner would not normally have enough time to complete on his or her own.
A licensed contractor must be registered with the State Construction Commission (SCC) before being able to legally perform construction projects. Because states vary in terms of their licensing requirements, it is best to do some research on the requirements of the state you plan to start your business in. A licensed contractor will also have to pass the contractor exam provided by the SCC. Although there are currently no national requirements for general contractors, almost all states require at least a general contractor license to conduct business. The license requirements vary from state to state, so it is best to check with a prospective general contractor in order to be sure that he is licensed to perform the work you need him to do.
There are additional licensing requirements for people who conduct business out of their homes. Home-based general contractors must be licensed by the local housing authority and pass a comprehensive exam. Although these professionals are technically not allowed to work out of their homes, they can apply for a sales tax exemption based on the income they earn. These home-based workers will also be required to pay a reasonable amount of taxes. Contractors who work out of their homes cannot work as general contractors for real estate brokers.
It is important to note that most states require general contractors to be licensed. Most major construction firms as well as subcontractors are licensed by the SCC. As long as the workers hired by these builders are paid wages that the state allows, they are considered legal workers. The general contractors who work outside the home are usually called “prime contractors.” Unlike primary and secondary contractors, primary contractors are required to secure a certificate of occupancy before they can begin working on any home.