Who needs a Minnesota residential contractor license?
A business contracting directly with an owner of one-to-four-unit residential real estate needs a Residential Building Contractor or Residential Remodeler license when it offers work in more than one special-skill category. (Minnesota DLI)
Roofing is the exception to the one-skill exemption. A business contracting directly for roofing must hold a Residential Building Contractor, Residential Remodeler, or Residential Roofer license.
Start by mapping every scope you sell to DLI’s eight special-skill categories. Do not count line items or subcontractors casually; classify the contracted scope before deciding that one-skill work is exempt.
The business license and qualifying person
Minnesota licenses the business, not simply the owner who passed a test. Each company designates a qualifying person, and that person must pass the prelicensing exam before the company applies. (Minnesota DLI exam page)
The qualifying person must hold an allowed role for the entity, such as proprietor, partner, chief manager, chief executive officer, or managing employee. A managing employee must work for the company and be actively engaged in its residential contracting or remodeling business.
One person may qualify more than one company only when the companies share at least 25% common ownership and the person meets the position requirement for each.
Fees, insurance, the recovery fund, and exemptions
The base license fee is $180. Minnesota adds a Contractor Recovery Fund fee based on gross annual receipts: $320 under $1 million, $420 from $1 million through $5 million, and $520 over $5 million. (Minnesota DLI)
The liability policy minimum is $100,000 per occurrence, $300,000 aggregate, and $25,000 property damage. The business name on the certificate must exactly match the Secretary of State filing, and DLI must be listed as certificate holder.
A residential contractor with gross annual residential receipts below $15,000 may use a Certificate of Exemption. Gross receipts are not reduced by expenses or cost of goods sold. Track the gross figure, not profit.
For coverage planning, compare contractor bonds versus insurance and our general liability insurance guide.
Builder, remodeler, or roofer?
| License | Scope |
|---|---|
| Residential Building Contractor (BC) | Existing residential work plus new homes and detached garages |
| Residential Remodeler (CR) | Work on existing structures only |
| Residential Roofer (RR) | Roofing only |
DLI says a building contractor may perform everything a remodeler may perform plus new construction. A roofer may not contract for gutters, downspouts, soffit, fascia, or other residential work. (Minnesota DLI exam page)
Pick the license from the widest contract you intend to sign, not the work your crew happens to self-perform on one job.
What the prelicensing exam covers
The exam has 110 multiple-choice questions, requires 70% to pass, and allows five and a half hours. Roughly 60% covers the Minnesota Residential Building Code; the remainder covers statutes and rules for the residential construction industry. (Minnesota DLI exam page)
Candidates receive the 2020 Minnesota State Residential Code and DLI reference manual during the exam. There are no prerequisite experience or education requirements to take the builder, remodeler, or roofer exam. A failed candidate must wait 30 days before applying to retake it and must submit a new application and fee.
The Builder (QB), Remodeler (QC), and Roofer (QR) paths use different qualifying exams. Apply for the class that matches the company’s intended scope.
Q registration and continuing education
After passing, the qualifying person receives a Q registration number used for the company license and future continuing education tracking. The Q registration lasts two years and will probably expire on a different date from the company license. (Minnesota DLI)
The qualifying person must complete 14 hours of DLI-approved continuing education to renew the Q registration. At least one hour must address the Energy Code and at least one hour must address business-management strategies.
Track the Q expiration and business-license expiration as two separate controls. A current company license depends on a current qualifying person and current business and insurance records.
Electrical and plumbing are separate
The residential builder or remodeler license does not replace Minnesota’s electrical or plumbing credentials. DLI treats electrical and plumbing as separate regulated programs. Companies that contract with residential homeowners to install solar photovoltaic systems must be licensed as a residential building contractor or remodeler. The actual installation of the solar PV system must be performed by a Minnesota-licensed electrical contractor. (Minnesota DLI)
If your contract includes electrical or plumbing, use a properly licensed trade contractor or obtain the separate credential before offering that scope. Do not treat a broad building-contractor license as trade authority.
Minnesota contractor license FAQ
Does a one-trade contractor need this license?
Usually not when it offers only one special skill, but residential roofers are specifically required to hold an eligible license.
What is the difference between BC and CR?
A BC may work on existing structures and build new structures. A CR is limited to existing structures. (Minnesota DLI)
How hard is the exam?
It has 110 multiple-choice questions, five and a half hours, and a 70% passing score. DLI provides the named reference books.
How much continuing education does the qualifying person need?
Fourteen DLI-approved hours every two years, including at least one Energy Code hour and one business-management hour. (Minnesota DLI)
Is the $15,000 exemption based on profit?
No. It uses gross annual receipts from residential contracting or remodeling before reducing for costs or expenses.
Application control
Before opening the online application, align the Secretary of State business name, insurance certificate, qualifying-person Q number, workers’ compensation form, and ownership disclosures. DLI warns that the name must match exactly across the filing and insurance documents. (Minnesota DLI) Our starting a construction business guide helps organize the entity work before licensing.