Alabama Contracting Law & Unlicensed Practice
Alabama law bars an unlicensed contractor from enforcing a contract and requires a license before bidding on covered work. This chapter covers the enforceability rule, the bidding requirement, the definition of a general contractor, and the penalties for unlicensed contracting.
Unlicensed contracts are unenforceable
Under the Code of Alabama, Title 34, Chapter 8, a general contractor who performs work requiring a license without holding one cannot enforce the construction contract. Alabama courts have long treated such contracts as null and void as to the unlicensed contractor, meaning the contractor generally cannot sue the owner to collect the contract price. Licensure is therefore a precondition to being paid on covered commercial work.
License required before bidding
Alabama requires a general contractor to hold the license before submitting a bid on a project that falls within the licensing statute. A contractor cannot lawfully bid a covered $100,000-or-more project and obtain the license afterward. Bid documents and prequalification packages typically require the license number, and submitting a bid without the required license can void the bid and expose the bidder to penalties.
Definition of general contractor and penalties
Title 34, Chapter 8 defines a general contractor broadly as one who, for a fixed price or other compensation, undertakes to construct or superintend covered public or private projects at or above the statutory cost threshold. Engaging in that business without the required license is a violation subject to civil penalties and, potentially, criminal misdemeanor treatment, in addition to the loss of the right to enforce the contract. The combination of unenforceable contracts and penalties makes early licensure essential.
State-specific details
State exam facts
Does Alabama require a state contractor license?
Yes. Alabama uses two statewide boards: the State of Alabama Licensing Board for General Contractors (ALBGC) licenses commercial general contractors, and the Home Builders Licensure Board (HBLB) licenses residential home builders.
When is an Alabama general-contractor license required?
A commercial general-contractor license is required for public or private projects costing $100,000 or more (raised from $50,000 by Act 2024-277, effective October 1, 2024). Swimming-pool work is licensed at $5,000 and residential home building above $10,000.
What happens if an Alabama contractor is unlicensed?
An unlicensed contractor's contract for work that required a license is unenforceable, and applicants must demonstrate a minimum net worth of $10,000 and choose an Unlimited, Major, or Minor monetary tier.
Sources: https://www.genconbd.alabama.gov, https://www.hblb.alabama.gov