Select a domain
On September 18, 2016, a regulatory amendment came into force, and the required amount of licence security for contractors doubled.
Licence security is a financial guarantee that a contractor obtains from an association, an insurance company or a financial institution in order to guarantee the performance of his contractual obligations toward his clients.
It is intended to compensate a client who has suffered harm, as the result of faulty performance or non-performance of construction work, related to deposits made, non-completion of work, faulty work and construction defects discovered in the year following the end of the work.
The Regulation respecting the professional qualification of contractors and owner-builders has been amended to increase the amount of the licence security in order to compensate the consumers better.
The previous amounts were of $10,000 for specialized contractors and of $20,000 for general contractors. Since the coming into force of the regulatory amendments on September 18, 2016, the amounts are doubled: $20,000 for specialized contractors and $40,000 for general contractors.
An analysis of the effectiveness of the licence security showed that the amounts were often insufficient to compensate the consumers. The RBQ decided to amend its regulation so as to offer them a better protection with indemnities that reflect their reality and needs.
The regulatory amendment concerning the increase in licence security came into force on September 18, 2016.
Since this date, payments for maintenance of your licence must be made according to the new amounts. So, contractors have to send the original certificate of their licence security or its additional clause to the RBQ on or before the due date for the fees and charges payable. As the moment to pay is different for every contractor, there will be one-year transitional period before all contractors holding a RBQ licence must pay according to the new amounts.
Failing to receive the licence security by the due date of the payment for maintenance of the licence could lead to the suspension of the licence, as recommended by the RBQ.
Holders of the subclasses 1.1.1 or 1.1.2 (New residential buildings covered by a guaranty plan, Class I and II) don’t have to provide a licence security. Indeed, it’s the Guarantee Plan that will compensate the clients who suffered a prejudice.
Every contractor must provide a licence security if he holds any other subclass as well as the subclasses 1.1.1 or 1.1.2.
For instance, if a contractor holds the subclass 1.2 in the general contractor’s class besides subclass 1.1.1, he must provide a licence security and be accredited with the Guarantee Plan.
Consult the pages related to licence security for the contractor to get more information.