Menu Close

Getting Into The HVACR Business Part 2

In Part 1 of the posts on this subject, I mentioned briefly that some states require technician licensing and others do not. That, as I said was technician licensing, meaning a technician who is employed by an HVAC contractor, not to be confused with being a licensed contractor.

The specific requirements, rules and regulations, in the same way that they vary from one state to another in regard to technician licensing, can be different in one state than they are in another. Basically, though, there is a simple way to look at the process….simply that somebody who has a business that:

A. Receives a request for a repair service  on a given piece of HVAC equipment from a customer.

B. Goes to the customer’s home or business and replaces parts and repairs the equipment.

C. Collects money for doing so.

…..then that somebody may be a licensed contractor, or maybe they’re not.

Basically there are some limitations for somebody who chooses to operate as an un-licensed contractor. In some states, that difference is that you can perform service and repairs for a customer up to a certain dollar amount, like $400, $500, or maybe even $600, in some states. If the price of the repair is higher than the dollar amount limit in your state, then you can’t legally perform the work. You have to be a licensed contractor.

This dollar amount limitation (as well as other rules and regulations in some states) fundamentally excludes an un-licensed contractor from performing a new equipment installation or an equipment replacement. Getting a gas furnace only replaced, for example, will likely exceed the dollar limit in just about any state, which means that replacing or installing a complete split system or package unit air conditioning unit would certainly be far beyond the allowed dollar amount for an un-licensed contractor.

In some states, if you’re an un-licensed contractor, your advertising has to say so, yet, in some states, there may be no such requirement, which brings me to an appropriate time to disuss a bit about what “licensed” really maans. I’ve been in conversations in which somebody has referred to themselves as a “licensed contractor” because they purchased a business license that was required (for tax collection purposes) by the city they were in and/or they registered for a required state tax license. Does that mean in any way, shape or form that the licensing they referred to was a guarantee that they were competent and could troubleshoot and repair an air conditioner?

Likely not, though in some locations, a person may have to show a limited amount of understanding about the workings of the business they are getting a license to run, while in some cases, the only requirement is the fee for the licensing. This is not to say that each and every person who operates an HVACR repair business as an in-licensed contractor is totally inept and will not be able to perform even the most basic repair a refrigeration system or troubleshoot an electrical problem in an HVAC system.

On the other side of the service and repair contractor coin is the licensed contractor, sometimes referred to as a registered contractor, or advertises their business as being “licensed, bonded and insured.” Becoming a bonified licensed contractor obviously takes more time an expense than being an un-licensed business operator, and I’ll discuss that issue in the next segment of my blog.