Last updated: September 2026
QUICK SUMMARY
The short answer: search the builder’s name on the Alabama Home Builders Licensure Board’s online license lookup, or call the board at 1-800-304-0853, before you sign anything. In Alabama, anyone paid to build or supervise construction of a home costing more than $10,000 must hold a residential home builder license, and residential roofers need one for jobs over $2,500. The license matters because Alabama’s Homeowners Recovery Fund (up to $30,000 per transaction) only covers work by licensed builders, and building departments are supposed to refuse permits to unlicensed builders.
Key takeaways
- License required when the job costs more than $10,000 (roofing: more than $2,500).
- Verify on the board’s online lookup or at 1-800-304-0853. The builder should also give you a signed, witnessed liability insurance disclosure before work starts.
- The Recovery Fund pays up to $30,000 per transaction and $90,000 per builder, but only after a court judgment against a licensed builder.
- Board complaints must be filed within six years and only by the original homeowner.
- A home built by an owner and sold within a year of completion is presumed to have been built for sale, which means a licensed builder should have built it.
New construction is a big part of both markets The Williams Group at Keller Williams Realty serves, from new subdivisions around Tuscaloosa and Northport to master-planned communities in Hoover and McCalla. Most builders here are licensed, insured and easy to verify. But buyers who are building a custom home, buying a small-builder spec house, or hiring someone to finish a lot often skip the one check that costs nothing and takes two minutes. This guide explains what the license covers, how to look it up, and what protection you give up if you work with someone who does not have one.
Who has to have a home builder license in Alabama?
Under Alabama Code Section 34-14A-2, a residential home builder is anyone who builds a home for sale, or who is paid to build or supervise the building of a residence, when the cost of the job is more than $10,000. The law covers homes and structures up to three floors with no more than four units, which includes most single-family homes, townhomes, duplexes and small fourplexes. Remodeling and additions over the threshold count too. A residential roofer needs a license once a roofing job is more than $2,500.
The licensing board is the Alabama Home Builders Licensure Board (HBLB) in Montgomery. It regulates residential construction statewide, so the same rules apply whether you are building in Tuscaloosa County, Jefferson County or Shelby County.
Who is exempt from the license requirement?
Alabama Code Section 34-14A-6 lists the main exemptions. The ones buyers run into most often:
Subcontractors working for a licensed builder. The electrician, framer or tile setter your licensed builder hires does not need a home builder license of their own (trade licenses like electrical and plumbing are separate).
Owners building their own home. An owner building or improving a one- or two-family home to live in, and not for sale, is exempt. But subcontractors the owner hires directly must be licensed when their part of the work is over $10,000.
Mobile homes and agricultural buildings are exempt, as are real estate licensees, engineers and architects working within their own licenses.
BUYER TIP: THE ONE-YEAR RULE
The owner-builder exemption has a limit that matters to buyers. Under Section 34-14A-6(5), if the owner sells or offers the home for sale within one year after it is finished, that is presumptive evidence it was built for sale, which is work that requires a license. If you are looking at a nearly new home sold by the person who built it, ask who built it and look up their license.
How do you check a builder’s license?
The HBLB keeps a public license search linked from its consumer pages at hblb.alabama.gov. You can also call the board’s Builder Watch line at 1-800-304-0853, which is also how to report unlicensed construction, or the main office at 334-242-2230 (weekdays 7:30 a.m. to 4:30 p.m.). When you search, confirm:
1. The exact business name on your contract matches the license. A license held by one company does not cover a different LLC with a similar name.
2. The license is active, not expired, suspended or revoked.
3. The license type fits the job. A roofing-only license does not cover building a house.
Two more checks go with the license search. First, Section 34-14A-19 requires a builder to tell you in writing, before work starts, whether they carry liability insurance. That disclosure must be signed by you and the builder and witnessed by someone you choose. Second, ask for the building permit. Section 34-14A-13 makes it the building official’s duty to refuse a permit for licensed work unless the applicant shows a license or an exemption, so a permitted job is a good sign that the licensing question was asked at least once.
Building or buying new in West Alabama or Greater Birmingham? Our new construction guide walks through builder contracts, warranties and inspections. Questions? Call 205-292-2108 (Tuscaloosa) or 205-292-7142 (Birmingham).
What does the Homeowners Recovery Fund cover?
Alabama created the Homeowners Recovery Fund by law in 1992. As of March 17, 2025, it can pay up to $30,000 per transaction (up from $20,000) and $90,000 total per licensed builder. It is a last-resort fund, not insurance, and the rules are strict:
You must sue the builder and win a judgment in court. A consent judgment does not count, and a board complaint alone is not enough.
Within 10 days of filing the lawsuit, you must notify the board by certified mail that you intend to make a Recovery Fund claim.
It pays actual economic damages only, not attorney fees, court costs, interest or pain and suffering.
The builder had to be licensed when the contract was signed and the work was done. Claims based on roofing licenses are excluded.
That last point is why the license check matters. If you hire an unlicensed builder and the job goes wrong, the Recovery Fund is simply not available to you.
What can the licensing board do, and what can’t it do?
The board can investigate violations of the licensing law and discipline builders with reprimands, fines, license suspension or revocation and required education. Unlicensed building is a Class A misdemeanor, and an unlicensed builder cannot go to court to enforce a home building contract signed in violation of the law.
What the board cannot do surprises many homeowners. According to the HBLB, it cannot order repairs, refunds or payments, and it does not handle poor workmanship, cosmetic issues or contract disputes on their own. A complaint must be filed on the board’s notarized form within six years of substantial completion or of the original owner taking possession, and only the original homeowner can file. The board says a complaint takes about 90 days.
BUYING A RESALE HOME?
Because only the original owner can file a board complaint, a buyer of a two- or three-year-old home generally cannot use the HBLB complaint process against the original builder. That makes the resale-side protections more important: a full home inspection, a close read of any transferable builder warranty, and the seller’s answers about repairs. Alabama is largely a buyer-beware state, which we explain in our guide to seller disclosure in Alabama.
What should you do before signing with a builder?
1. Look up the license and save a screenshot with the date.
2. Get the liability insurance disclosure in writing, signed and witnessed, before any work starts.
3. Read the contract for the warranty terms, the draw schedule, change-order pricing and what happens if the job runs late.
4. Confirm the permit with the city or county building department.
5. Plan independent inspections at key stages, not just at the end, and check the lot for survey and HOA issues. See our guides to land surveys and HOA rules.
The Local TWG Perspective
In our markets, new construction ranges from national and regional builders in large communities, like the ones we describe in our Everlee buyer guide in Hoover, to one-house-at-a-time builders on lots around Northport, Lake Tuscaloosa, Coker and Vance. Large builders almost always have licensing, insurance and warranty paperwork ready. The questions come up more with small projects: a lot bought first and a builder chosen later, a finished basement or addition, or a spec house sold by an individual. Those are exactly the cases where a two-minute license lookup protects you the most.
Local rules also change the cost of building. Northport, for example, weighed large permit fee increases this year, which we covered in our post on Northport permit fees. And if you are replacing a roof, a licensed roofer and a FORTIFIED roof can also affect your insurance premium.
Selling a home you built or remodeled? Buyers will ask who did the work. Start with a free home valuation and we will help you gather the paperwork.
Frequently asked questions
Does a contractor need a license to build a house in Alabama?
Yes, if they are paid to build or supervise construction of a residence and the job costs more than $10,000. The license is issued by the Alabama Home Builders Licensure Board. Residential roofers need a license for jobs over $2,500.
How do I look up a home builder license in Alabama?
Use the license search linked from the Home Builders Licensure Board’s consumer pages at hblb.alabama.gov, or call 1-800-304-0853. Match the exact business name on your contract and confirm the license is active.
How much can the Alabama Homeowners Recovery Fund pay?
Up to $30,000 per transaction and $90,000 total per licensed builder, for actual economic damages, after you win a court judgment against a licensed builder. It does not cover unlicensed builders or roofing-license claims.
Can I build my own house in Alabama without a license?
Generally yes, if you are building a one- or two-family home to live in and not for sale. Subcontractors you hire directly still need a license when their work is over $10,000, and selling within one year of completion is presumed to mean the home was built for sale.
Can the licensing board make my builder fix bad work?
No. The board can discipline a builder’s license, but it cannot order repairs, refunds or payments, and it does not handle workmanship or contract disputes by themselves. Those usually require the builder’s warranty process or a lawyer.
This article is general information about Alabama’s home builder licensing law and is not legal advice. Rules and limits can change; confirm current requirements with the Home Builders Licensure Board and talk with an Alabama attorney about a specific dispute.
Sources
- Alabama Home Builders Licensure Board: Home Builders Licensure Law (Ala. Code Title 34, Ch. 14A)
- HBLB: Exemptions
- HBLB: Recovery Fund
- HBLB: Board increases potential Recovery Fund payments to homeowners (March 2025)
- HBLB: Consumer complaint procedures
- HBLB: Frequently asked questions for consumers
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