Washington Contractor Registration Requirements

A contractor can show up with a truck, a bid, and a business card — and still not be properly registered for the work.

For HOA boards, that matters more than it sounds. Registration status affects whether a contractor is legally eligible, whether required bond and insurance are in place, and whether the association is taking on avoidable risk before approving a project or payment.

Under Washington’s Contractor Registration Act (RCW 18.27), most contractors performing compensated construction work must be registered with the Department of Labor and Industries. For boards, the practical question is simple: is this vendor active, properly classified, and currently backed by bond and insurance?

Who is actually covered by the law

RCW 18.27 requires anyone performing construction work for compensation to register with the Department of Labor and Industries (L&I). This includes general contractors, specialty contractors, and most subcontractors.

Exemptions exist for owner-occupants working on their own property, employees working for registered contractors, and work below certain dollar thresholds. HOA common area work is not exempt.

The key distinction: "registered" means the contractor has an active record with L&I. It does not mean their bond is current, their insurance is verified, or their specialty classification matches the work you are hiring them for. Those are separate checks.

General vs. specialty: why the distinction matters

L&I issues two registration types:

General Contractor — Can perform any type of construction work and hire subcontractors. Required for projects that span multiple trades.

Specialty Contractor — Registered for specific trade categories (electrical, plumbing, roofing, etc.). Can only perform work within their registered specialty.

The mistake boards make: hiring a specialty contractor for work outside their registered trade. A plumbing contractor performing drainage work on a common area may not be covered under their registration if the work falls outside their specialty classification. If something goes wrong, the registration the board relied on may not apply.

The three items boards should verify before payment

Before approving a vendor payment, boards should confirm three things on the L&I record. All three must be current, not just present.

1. Active registration with the correct specialty

Check the contractor’s status on the L&I contractor lookup tool. "Active" means current. "Expired," "Suspended," or "Revoked" are not acceptable — even if the contractor has worked for the HOA before.

If hiring a specialty contractor, verify their registered trade matches the work being performed. A contractor can be active and still not be registered for the specific type of work you need.

2. Current surety bond

All registered contractors must maintain a surety bond: minimum $30,000 for general contractors, $15,000 for specialty contractors (effective July 2024). The bond protects consumers who are damaged by contractor violations.

Bond expiry dates are visible on the L&I record. Do not stop at Active registration — you still need to inspect bond status separately. A lapsed bond means the contractor is non-compliant even if other fields look fine.

3. Insurance verification status

L&I tracks whether the contractor has current insurance on file. Check whether insurance is shown as verified and current. If insurance shows as unverified or not on file, the contractor may have coverage but L&I has not confirmed it — and from the board’s perspective, unverified is functionally the same as unprotected.

Registration and insurance are separate systems. A contractor can be registered and bonded and still have lapsed insurance. The L&I record shows all of these fields, but boards need to check each one.

Workers’ compensation is also required for contractors with employees — either L&I industrial insurance or an approved self-insurance program. If a contractor claims to have no employees, that should be verified separately.

What "active" does not mean

An active registration is necessary but not sufficient. It does not mean:

• Insurance is current (it may have lapsed since registration)
• The bond covers the scope of your project
• The contractor has no violations, suspensions, or debarment history
• The contractor’s specialty matches the work being performed

Boards that verify only registration status and skip the other checks are relying on incomplete information.

How BuildRated automates this

BuildRated pulls contractor registration data directly from the L&I database and evaluates license status, bond adequacy, insurance verification, and violation history as part of every contractor profile.

When a contractor’s license expires, a bond lapses, or insurance verification drops, BuildRated’s daily compliance check flags the issue and notifies any HOA that has a payment relationship with that contractor.

The VECR (Vendor Eligibility and Compliance Record) summarizes all of this in a single document designed for audit, board review, and payment approval. It answers the question boards should be asking: based on current evidence, is this contractor eligible to be approved and paid?