Does a General Contractor Need a License in Texas? How to Verify a Commercial Contractor Before You Sign

Choosing a Commercial Contractor

Almost every contractor in Texas says “licensed and insured.” Before you sign a six or seven figure construction contract, it is fair to ask what that phrase actually means here.

That leaves more of the checking to owners, developers, property managers and facility managers than most expect. This guide explains who regulates what, how New Braunfels and San Antonio differ, and seven things to verify before you hire a commercial general contractor anywhere between San Antonio, the Hill Country and Austin. It is general information, not legal advice, so confirm requirements for your own project with the city and your attorney.

Does Texas license general contractors?

No. There is no state agency in Texas that tests, licenses or disciplines general contractors. The Texas Department of Licensing and Regulation (TDLR) is the agency most people think of, and its list of regulated programs includes electricians, air conditioning and refrigeration contractors, elevators, boilers, mold assessors, industrialized housing and architectural barriers. General contracting is not on it.

That has two practical consequences for a commercial owner:

• There is no single state lookup that tells you a general contractor is legitimate. You have to check several things in several places, which is what the rest of this guide walks through.
• The barrier to calling yourself a general contractor is low. Experience, financial strength and quality are not screened by the state. They show up in a contractor’s project history, insurance, trade partners and references.

Commercial construction is still regulated. The rules simply sit elsewhere: state licensing of individual trades, city registration and permitting, and state rules on accessibility and payment that apply to the project itself. If you are new to the process, our walkthrough of the commercial build-out process in Central Texas shows where each of those shows up on the schedule.

What the state does license: the trades inside your project

A general contractor coordinates the job, but much of the work that affects life safety is performed by trades that Texas does license. On a typical tenant improvement or ground-up building, these are the ones that matter.

Design professionals are regulated too. Architects are registered with the Texas Board of Architectural Examiners, and engineers with the Texas Board of Professional Engineers and Land Surveyors. Both boards publish a public search, as do TDLR and the plumbing board.

The takeaway: a good commercial general contractor can hand you the license numbers for every regulated trade on your job before the first permit is pulled, and you can check each one yourself in minutes.

City registration: New Braunfels vs San Antonio

Cities fill part of the gap by requiring contractors to register. The rules are local, so they change when your project crosses a city limit. Here is how the two largest jurisdictions in our service area describe their requirements.

	City of New Braunfels	City of San Antonio
Who administers it	Building Safety Division	Development Services Department
What the city says	Registration is required to perform residential or commercial general contractor work within the city	All city and state licensed contractors must be registered with Development Services before permits are issued
Commercial vs residential	Separate registrations. Commercial general contractors perform work regulated under the International Building Code	Published building-contractor criteria focus on residential builders and home improvement contractors
Insurance to register	Certificate of liability insurance naming the city as certificate holder: at least $1,000,000 for commercial general contractors, $300,000 for residential	Some licenses and registrations require a bond or continuous insurance coverage, depending on the trade
State-licensed trades	State trade licenses apply regardless of city registration	Electrical, mechanical, plumbing and sign contractors must register their state license with the city
Term and fee	$200 application fee. Registration expires annually on December 31	Listed on the city page for each contractor type
How to check	Ask for the current registration and confirm with the Building Safety Division	Contractor Connect search tool on the city website

Two cautions. First, a city registration is not a quality endorsement. In New Braunfels it confirms that the business exists, has a named contact with valid identification and carries at least the minimum liability insurance. Second, San Antonio’s published criteria are written mostly around residential work, so for a commercial project ask Development Services how your contractor and its licensed trades need to be registered before the permit is issued.

In smaller Hill Country cities and in unincorporated parts of Comal, Guadalupe and Bexar counties, requirements vary. Call the local building department or fire marshal’s office before assuming that no registration applies.

Insurance, and why workers’ comp is different in Texas

“Insured” deserves as much scrutiny as “licensed.” Ask for a current certificate of insurance sent directly by the contractor’s insurance agent, and read it against your lease and loan documents, which often set their own requirements. The $1,000,000 that New Braunfels requires for registration is a minimum for doing business in the city, not a recommendation for your project.

Workers’ compensation is where Texas surprises people. According to the Texas Department of Insurance, Texas does not require most private employers to carry workers’ compensation. The main exception is public work: private employers who contract with government entities must provide coverage for the employees working on the project. On a private commercial job, a contractor or subcontractor can legally be a “non-subscriber” with no workers’ compensation policy at all.

That is why many owners and landlords make coverage a contract requirement for the general contractor and every subcontractor. You can also verify it. The Division of Workers’ Compensation publishes coverage verification tools, and if the status is unclear it will research an employer’s coverage by email and respond within one business day.

How to verify a commercial contractor in 7 steps

Together, these steps answer the question that “licensed and insured” is supposed to answer.

1. Confirm the business entity. Look the company up in the Texas Comptroller’s Franchise Tax Account Status Search by entity name, taxpayer number or Secretary of State file number. The Secretary of State’s SOSDirect service offers entity searches for a $1.00 fee per search. The legal name on the contract should match what you find.
2. Check city registration where the project is located. In New Braunfels that is the commercial general contractor registration. In San Antonio, confirm registration with Development Services. Registrations renew annually, so check the current year.
3. Verify the licensed trades. Ask which electrical, mechanical, plumbing and fire protection subcontractors will be on your job and look each one up with TDLR or the plumbing board. Ask fire alarm and sprinkler firms for their State Fire Marshal’s Office license.
4. Get insurance certificates from the agent. Request general liability, auto, umbrella and workers’ compensation certificates directly from the insurance agency, with you and your landlord or lender named as your documents require.
5. Ask for comparable commercial work. A contractor that has built medical, restaurant, retail or industrial space similar to yours can show it, name the owner or property manager, and tell you what went wrong and how it was handled.
6. Read how the estimate is built. A commercial estimate should show scope by trade, allowances, exclusions and a schedule. Vague one-line pricing makes it impossible to compare bidders or control change orders later.
7. Ask how payments and lien waivers work. You want a schedule of values, monthly pay applications and lien waivers from the contractor and its subcontractors with each payment. The next section explains why.

If you already have drawings or a test fit, the fastest way to see how a contractor handles steps five and six is to ask for preliminary pricing. You can submit your plans for bid and see how we break a project down.

Two Texas rules a qualified contractor already knows

A quick way to gauge commercial experience is to ask about two state rules that apply to the project rather than to the contractor.

Accessibility review on projects of $50,000 or more

Under the Texas architectural barriers law, Chapter 469 of the Government Code, projects with a total estimated cost of $50,000 or more must be registered with TDLR. A full set of construction documents goes to a Registered Accessibility Specialist for review, and inspections are performed by a Registered Accessibility Specialist as well. The owner is responsible for compliance with the Texas Accessibility Standards and can designate an agent to handle it. Private residences are exempt, and a local building official may require registration on smaller projects. A contractor who does regular tenant improvement and commercial build-out work will raise this before you do.

Retainage and lien waivers

Texas Property Code Chapter 53 gives lien rights to those who furnish labor or materials under a contract with the owner, the contractor or a subcontractor. In other words, a subcontractor or supplier you never dealt with may be able to claim a lien against the property if they are not paid. The same chapter has the owner reserve 10 percent of the contract price during the work and for 30 days after completion, and it makes a lien waiver enforceable only if it substantially follows one of four statutory forms: conditional and unconditional, for progress payments and for final payment.

You want a contractor whose pay applications, retainage and waiver paperwork already follow the statute, and an attorney to review the contract. If your project is funded partly by a landlord, our guide to tenant improvement allowances and work letters covers how those payments usually flow.

Red flags worth walking away from

• A “state general contractor license number” on a proposal. Texas does not issue one, so ask what the number actually refers to.
• An insurance certificate that arrives as an edited PDF from the contractor instead of from the insurance agency.
• No workers’ compensation coverage and no clear answer about how job site injuries are handled.
• Reluctance to name the electrical, mechanical and plumbing subcontractors before the contract is signed.
• A suggestion to skip the permit, split the project to stay under a review threshold, or have you pull the permit as the owner.
• No lien waivers offered with payment requests.

The same questions apply whether you are planning a build-out, a new building or a commercial roofing project.

Frequently asked questions

Does Texas require a license for general contractors?

No. Texas does not issue a statewide general contractor license, and you will not find a general contractor program among the license types the Texas Department of Licensing and Regulation administers. The state licenses specific trades such as electrical, air conditioning, plumbing and fire protection, and cities such as New Braunfels register general contractors.

How do I check whether a contractor is registered in New Braunfels?

Ask the contractor for a copy of its current City of New Braunfels general contractor registration, then confirm it with the Building Safety Division. Registrations expire every year on December 31, so a registration from a prior year proves nothing about this year. For a commercial project, confirm it is the commercial registration.

Is workers’ compensation insurance required for contractors in Texas?

Not in most private work. The Texas Department of Insurance states that Texas does not require most private employers to carry workers’ compensation, although private employers who contract with government entities must cover the employees working on that project. Because coverage is optional on private projects, ask for proof and verify it.

Does my commercial project have to be registered with TDLR?

If the total estimated cost is $50,000 or more, yes. Under the Texas architectural barriers law, Chapter 469 of the Government Code, those projects must be registered with the Texas Department of Licensing and Regulation, and the construction documents must go to a Registered Accessibility Specialist for review. Private residences are not covered.

Can a subcontractor file a lien on my property if I already paid the general contractor?

Texas Property Code Chapter 53 gives lien rights to people who furnish labor or materials under a contract with the owner, the contractor or a subcontractor, so the risk does not end with your payment to the general contractor. The same chapter has owners reserve 10 percent of the contract price until 30 days after the work is completed and sets out statutory lien waiver forms. Ask your attorney how those rules apply to your contract.

The bottom line: in Texas, “licensed” is something you verify, not something you take on faith. Check the entity, the city registration, the trade licenses and the insurance, and you will know more about your contractor than a state license number would ever tell you. To talk through a project in New Braunfels, San Antonio or the Hill Country, visit our commercial general contractor page or get in touch.