South Dakota Contractor License Search

Who Is a Contractor in South Dakota?

Contractors are individuals or businesses that offer services based on a written or oral agreement. South Dakota does not have statewide licensing requirements for all types of contractor licenses; however, where there is no state-level licensing, a contractor must obtain the appropriate license from their local licensing authorities. Contractors working within South Dakota are generally grouped into two categories:

• General Contractors: General contractors engage in various construction and home improvement projects. These contractors usually supervise a project and serve as the project owner's primary point of contact. South Dakota does not provide statewide requirements for general contractor licenses.
• Specialty Contractors: Specialty contractors are trained to provide specific construction and home improvement tasks, like plumbing, electrical work, painting, masonry, and roofing. Electricians and plumbers must obtain state-issued licenses from the appropriate Occupational and Professional Licensing Boards of the South Dakota Department of Labor and Regulation. Specialty contractors, also known as "subcontractors," are typically hired by general contractors to perform a specific task or provide a particular service related to a construction project. Nevertheless, you can engage a specialty contractor for projects restricted to their expertise.

How to Search for a Contractor's License in South Dakota

South Dakota does not require general contractors working within the state to obtain a license. However, these contractors must comply with local regulations in the city they operate. On the other hand, specialty contractors like electricians and plumbers are licensed by appropriate Occupational and Professional Licensing Boards of the South Dakota Department of Labor and Regulation. Always verify your prospective contractor's license before signing any agreement. You can do this using the Uhire professional license search tool or by contacting the South Dakota Department of Labor and Regulation's plumbing and electrical commissions at (605) 773-3429 and (605) 773-3573, respectively.

Penalty for Hiring a Contractor Without a License in South Dakota

Although South Dakota does not have specific penalties for hiring an unlicensed contractor, there are several reasons you should avoid doing so. These reasons include the following:

• You may receive shoddy and subpar services.
• You may fall victim to a home improvement scam.
• If the contractor doesn't have a license, they may have trouble getting the necessary permits for your project. This could lead to penalties from the local permitting agency.

While a state-issued contractor license is not required to provide certain services, it is a misdemeanor to contract without a tax license in South Dakota. Defaulters may face penalties of up to $1,000 in fines, one year in jail, or both. We recommend verifying your prospective contractor's tax license by contacting the South Dakota Department of Revenue at (605) 773-3311.

How Much Does a Contractor Charge in South Dakota?

Specialty contractors in South Dakota typically charge anywhere from $20 to $150 per hour. The total cost of their services is usually based on the difficulty level and amount of labor required for the tasks they are hired to complete.

The table below provides average hourly rates for commonly requested specialty contractors in South Dakota (note that factors like your location and the contractor's reputation may influence actual costs):

Electricians

$28 - $125

Plumbers

$24 - $125

HVACR Technicians

$26 - $120

Carpenters

$20 - $80

Painters

$22 - $75

Roofers

$18 - $110

Flooring Contractors

$19 - $80

Masons

$15 - $120

Landscapers

$22 - $95

Architects

$21 - $200

Interior Designers

$18- $185

Excavation Contractors

$23 - $250

Concrete Contractors

$22 - $120

Handymen

$15 - $75

Appliance Repair Technicians

$21 - $100

Exterminators

$22 - $105

Cleaning Services

$15 - $100

Movers

$20 - $150

Typically, a residential or commercial project will require the services of multiple specialty contractors, as each one has expertise in a specific area. You should hire a general contractor to manage the entire project to avoid the stress of dealing with multiple contractors. South Dakota general contractors typically charge 10 to 20 percent of the project's value and choose a pricing method to help them properly estimate and calculate project costs before submitting a quote to the client. Some common types of pricing methods used by general contractors in South Dakota are listed below:

• Unit Pricing Method: This pricing method allows the contractor to charge per unit of individual costs. Factors such as labor, materials, and overhead costs influence the unit pricing method. Any project scope alterations will impact the contractor's unit price for their work.
• Lump Sum Pricing Method: Here, the contractor bids for the entire project cost instead of a unit price. This way, the general contractor receives a fixed price covering all expenses to avoid delays or interruptions. This pricing method is useful for projects with clearly defined scopes.
• Cost Plus Pricing Method: The cost-plus pricing method allows the contractor to charge the total cost of materials and labor plus an added amount, usually between 10 to 20 percent of the project's cost. This extra amount is meant to cover any increased expenses during the project, whether or not this ultimately benefits the client. It only benefits the client if the project's materials or labor costs are lower than originally estimated, resulting in a refund. However, homeowners should be wary of contractors who initially charge significantly lower fees under this pricing method, as they may later increase their fees if the project gets more expensive than expected.

Construction and home remodeling projects in South Dakota cost anywhere from $100 - $1,500 per square foot. The following factors determine the overall costs of a project:

• The nature and scope of the project
• The cost of required materials
• Accessibility to the project site and site conditions
• Contractor charges
• The reputation and experience of involved contractors
• The urgency of the required services
• Your location
• Permit costs, labor fees, and other miscellaneous expenses

Tips for Hiring a Contractor in South Dakota

When hiring a contractor for construction or home remodeling projects, it may be tempting to choose the first person you find. However, hiring anyone without doing your due diligence may result in shoddy or subpar services and expose you to home improvement scams. To avoid these situations, we suggest following these tips when hiring a contractor for your project:

• Always ask for referrals. You can contact friends and family who have hired a contractor in the past to determine the contractor's level of expertise and work attitude.
• Get and compare bids for your projects from at least three contractors.
• Ask each bidder to provide a list of references and verify them.
• Ensure the contractor you intend to hire is licensed. If there is no state licensing for their trade, contact the local licensing agency in your area to verify the contractor's license.
• Request proof of the contractor's insurance coverage and verify it with the insurance company.
• Insist on getting a written contract with all project expectations and agreements before work starts.
• Make sure the contract terms are clear to you before signing. Always ask when you need help understanding any part of the contract.
• Withhold full payment until the job has been satisfactorily completed.
• Do not pay in cash.
• Keep copies of all documentation related to the project (like receipts, invoices, warranties, and contracts).

Is Your Contractor Insured and Bonded as Required by South Dakota Statutes?

South Dakota does not provide statewide insurance requirements for general contractors working within the state. However, certain specialty contractors must carry appropriate public liability insurance. For example, electrical contractors working within South Dakota must carry public liability insurance of not less than $100,000 per occurrence and a $300,000 aggregate limit for bodily injury. In addition, these contractors must carry property damage insurance of not less than $25,000 per occurrence and a combined single limit of $300,000.

While there are no statewide insurance requirements for most contractors in South Dakota, it is highly recommended that contractors maintain appropriate insurance policies. Insurance protects clients from any financial or legal burden resulting from bodily injuries, accidental property damage, and contractor errors that may occur during their projects.

So, before choosing a contractor, always ask for proof of their insurance. You can get more information about your prospective contractor's insurance requirements by contacting your area's construction work licensing authority.

Top Contractor Scams in South Dakota

In 2021, South Dakota registered only 20 cases of contractor scams. This translates to roughly 0.8 cases for every 10,000 homeowners in the state. While these figures reveal that home improvement scams are not very common in the state, homeowners should still be alert to scam warning signs from contractors during the hiring process.

Some common tactics that fraudulent contractors use to scam South Dakota homeowners include the following:

• Going door-to-door soliciting for work at a discounted rate
• Offering to give a discount on leftover materials from a job that was allegedly completed near you
• Offering free home inspections
• Deliberately inflating the cost of required materials for the project
• Requesting for full payment upfront
• Always making excuses for not providing a written contract
• Downplaying the importance of references
• Avoiding pulling the appropriate permit for the project

You can avoid these scams by taking the following actions before committing to contractors:

• Do not hire unsolicited contractors.
• Get referrals from friends and family.
• Get and compare quotes from up to three contractors.
• Always ensure the contractor you wish to hire is licensed by checking with the appropriate authorities.
• Request references from prospective contractors and look them up online.
• Hire contractors that are insured and bonded.
• Insist on written contracts and review them carefully before signing.
• Only sign documents you clearly understand.
• Request lien waivers from your general contractor and all involved subcontractors.
• Avoid making full payment upfront.
• Avoid cash payments.