Washington State Legislature Updates Contractor Registration Statute

In the 2007 legislative session, the Washington State Legislature significantly expanded the definition of what constitutes a “Contractor” in Washington State, such that for the past 8 years a broad reading of the contractor’s registration statute, RCW Ch. 18.27, would require just about any person or entity, other than a residential homeowner, who is involved at any level in improving real property to be registered as a “Contractor,” irrespective if that person or entity hired a licensed contractor to perform work on real property that they own.  This has imposed a burden to register as a contractor on persons or entities not performing any actual construction work, such as “house flippers” or developers, who retain general contractors to perform work for them, and do not so much as lift a shovel of dirt to improve the property that they own. 

In April of 2015, the Legislature passed SHB 1749 which amended RCW 18.27.010  so that those who “offer to sell their property without occupying or using the structures, projects, developments, or improvements” are excluded from the definition of “contractor” and not required to be registered, provided that the person or entity “contracts with a registered general contractor and does not superintend the work.”

While the legislative bill history seems to indicate that the amendment was targeted at lifting the undue burden placed on those flipping residential properties to register as contractors when they hire a general contractor, the amended statute seems to eliminate the registration requirement for large scale developers who hire general contractors to construct improvements on the property that they own.  The statutory amendment would not modify the obligation of developers to register as contractors when the developer does not own the land in question, although, the practical advice for Washington state developers who seek to avoid the need to register as a contractor would be to conduct any development activities through the entity that owns the land and retain a licensed general contractor to perform construction work.

Revised RCW 18.27.010 takes effect on July 24, 2015.