If a Virginia business owner renovates their own commercial building under the contractor-licensing self-help exemption, do they still need a certificate of occupancy before reopening?

Plain-English summary

Sussex County's attorney was seeing a pattern: business owners were renovating their own commercial buildings, getting their building permits, sometimes hiring subcontractors, and then reopening without ever getting a certificate of occupancy. Their argument: § 54.1-1101(A)(9) of the Virginia Code exempts owners who perform or supervise repairs to their own commercial buildings from contractor licensing requirements. The owners read that broadly to mean they were exempt from the building code's whole regulatory web, including the certificate of occupancy step.

Attorney General Bob McDonnell drew a sharp line. The § 54.1-1101(A)(9) exemption sits in Title 54.1, Chapter 11, which regulates contractors. It only relieves the owner of the requirement to be licensed as a contractor to do the work. It does not, and never did, touch the Virginia Uniform Statewide Building Code. Section 54.1-1101(C) makes that explicit by saying any person who claims the contractor-licensing exemption must still comply with the Building Code. The Building Code, at 13 VAC § 5-63-160(A), requires a certificate of occupancy before occupancy of any building, with only one narrow exception (residential accessory structures).

There is, however, a practical accommodation built into the Building Code for renovations. For "additions or alterations to existing buildings or structures that already have a certificate of occupancy," 13 VAC § 5-63-130(L) permits the approval of the final inspection to "serve as the new certificate of occupancy." Building officials can use that mechanism rather than issuing a fresh certificate document, which streamlines the process while still keeping a code-compliance checkpoint.

Currency note

This opinion was issued in 2009. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Two regulatory systems govern any commercial renovation in Virginia. The first is the contractor-licensing system in Title 54.1, Chapter 11. The Board for Contractors licenses general and specialty contractors and the purpose, the Supreme Court of Virginia has said, is to protect the public from inexperienced, unscrupulous, irresponsible, or incompetent contractors. Within Chapter 11, § 54.1-1101 carves out exemptions. Subsection (A)(9) exempts "[a]ny person who performs or supervises the repair and improvement of industrial or manufacturing facilities, or a commercial or retail building, for his own use."

The second system is the Uniform Statewide Building Code, in Title 36 and 13 VAC Chapter 63. The Board of Housing and Community Development adopts the code under § 36-98. The stated purpose, both in statute and in regulation (13 VAC § 5-63-460(A)), is "to protect the health, safety and welfare of the residents of the Commonwealth." Within the regulations, 13 VAC § 5-63-160(A) requires a certificate of occupancy before any building or structure may be occupied, with one carve-out for residential accessory structures. For renovations to existing buildings that already had a CO, 13 VAC § 5-63-130(L) allows the final inspection approval to function as the new CO.

The two systems connect through § 54.1-1101(C), which provides that any person exempt from contractor licensing under subdivisions 7, 8, 9, 10, 11, or 12 of § 54.1-1101(A) "shall comply with the provisions of the Uniform Statewide Building Code." The word "shall" carries its ordinary mandatory force.

What the AG concluded

The contractor-licensing exemption does not touch the Building Code. Section 54.1-1101(A)(9) operates only within Chapter 11. It removes the licensing requirement, nothing more. The Building Code is a separate regulatory regime with its own justification (public safety) and its own enforcement mechanisms (permits, inspections, certificates of occupancy).

Section 54.1-1101(C) makes the separation explicit. The General Assembly anticipated the exact argument the Sussex business owners were making and shut it down by requiring building-code compliance from anyone claiming the contractor-licensing exemption. The two are independent: you can be exempt from one and still bound by the other.

The Building Code requires a CO before occupancy. 13 VAC § 5-63-160(A) sets the rule and there is only one written exception (residential accessory structures). Commercial renovations after substantial work clearly do not fit that exception.

The final-inspection mechanism is the practical compliance path. Under 13 VAC § 5-63-130(L), the building official's final-inspection approval can substitute for a fresh CO document when the work is an addition or alteration to an existing building or structure that already has a CO. This is the route most owner-renovators would actually use in practice; it does not require a separate application for a brand-new CO.

The dispute about subcontractors is not the central issue. The county attorney had raised whether the owner-builder exemption applies when the owner hires subcontractors rather than using his own employees. The AG did not resolve that question because, even if the exemption applies, the CO requirement still stands. The Sussex question was really about whether the CO step could be skipped, not whether the contractor-licensing label fit.

Common questions

What is a certificate of occupancy and why does it matter?
A certificate of occupancy is a document from the local building official confirming that a structure has been built or renovated to code and is safe to occupy. It documents that the electrical, plumbing, structural, and fire-safety work passed inspection. Occupying without one exposes the owner to enforcement action and can complicate insurance and resale.

If I am the owner-builder, can I just inspect my own work?
No. The exemption from contractor licensing does not turn the owner into the building official. The local building official, or the official's designee, still performs the inspections.

What about a brand-new commercial building I am building for my own business?
A new CO is required because there is no prior CO to be updated. The final-inspection-as-new-CO shortcut in 13 VAC § 5-63-130(L) applies only to additions or alterations to existing buildings that already had a CO. New construction needs the full CO process.

Does the opinion say anything about the owner who hired subcontractors?
Only obliquely. The Sussex County Attorney suggested that an owner who manages subcontractors might not even qualify for the contractor-licensing exemption (which contemplates the owner personally performing or supervising the work). The AG did not need to decide that point. Whether or not the exemption fits, the CO requirement was independent.

What enforcement options were available against business owners who skipped the CO?
The Building Code provides enforcement mechanisms at the local level, including stop-work orders, civil penalties, and proceedings before the Board of Housing and Community Development. A building official could refuse to allow occupancy of an uninspected renovated commercial space.

Citations

• Va. Code Ann. § 54.1-1101(A)(9), (C) (contractor licensing exemption and Building Code carve-back)
• Va. Code Ann. §§ 36-97 to 36-119.1 (Uniform Statewide Building Code)
• 13 VAC § 5-63-160(A) (certificate of occupancy required)
• 13 VAC § 5-63-130(L) (final inspection may serve as new CO)
• J.W. Woolard Mech. & Plumbing, Inc. v. Jones Dev. Corp., 235 Va. 333 (1988)
• Cohen v. Mayflower Corp., 196 Va. 1153 (1955)
• Earley v. Landsidle, 257 Va. 365 (1999)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2009/08-097-Thompson.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Robert F. McDonnell

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

Attorney General

February 2, 2009

Mr. Henry A. Thompson, Sr.
Sussex County Attorney
P.O. Box 342
Waverly, Virginia 23890

Dear Mr. Thompson:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether § 54.1-1101(A)(9) exempts business owners from having to secure certificates of occupancy following renovations and repairs to commercial structures used by such owners for their businesses.

Response

It is my opinion that § 54.1-1101(A)(9) does not exempt business owners from the requirement to secure certificates of occupancy following renovations and repairs to commercial structures used by such owners for their businesses.[1] However, the Virginia Uniform Statewide Building Code regulations permit the approval of a final inspection to serve as a new certificate of occupancy for additions or alterations to existing commercial buildings.

Background

You advise that Sussex County is experiencing an increase in renovations and repairs of commercial buildings by business owners who own and occupy such buildings. You relate that these business owners are conducting repairs and renovations to their commercial buildings and occupying the buildings without obtaining certificates of occupancy. You further relate that in a particular situation, the owner of a commercial business obtained the requisite building, electrical, and related permits for a major renovation and repair of his existing commercial building on land that he owns and uses for his business operations. The owner hired several subcontractors to perform electrical and other work during such repair and renovation. You advise that one of the subcontractors is in a civil dispute with the owner and is alleging that his contractor's license may have been inappropriately used to obtain building and other permits from the County.

You relate that the owner asserts that he is not required to obtain a certificate of occupancy because he is exempted by § 54.1-1101(A)(9). The business owner asserts that he is a person who actually performed or supervised the repair and improvement of his commercial building for the use of his business as required by § 54.1-1101(A)(9).

You further relate that the affidavit for the required building permits contained language requiring the owner to swear or affirm that "he shall perform the commercial renovations and repairs or have a licensed contractor perform such work." You advise that based on the language of the affidavit, the business owner asserts that he may hire subcontractors to perform the repairs and renovation work at his commercial site and remain exempt from obtaining a certificate of occupancy.

Additionally, you advise that Sussex County maintains that a certificate of occupancy is required unless the business owner or his qualified employee personally performs the renovations, construction, and repairs. You conclude that § 54.1-1101(A)(9) does not exempt the business owner from the requirement to secure a certificate of occupancy because the business owner actually is managing the work of contractually retained subcontractors and not supervising his own employees in the renovations and repairs. You further conclude that managing such work implies supervision that involves the personal handling of all details; therefore, the owner does not qualify for the exemption from a certificate of occupancy under § 54.1-1101(A)(9).[2]

Applicable Law and Discussion

Section 54.1-1101 provides that:

A. The provisions of [Chapter 11] shall not apply to:

9. Any person who performs or supervises the repair and improvement of industrial or manufacturing facilities, or a commercial or retail building, for his own use[.]

Chapter 11 of Title 54.1 pertains to the regulation of contractors in the Commonwealth. The purpose for requiring licensure and regulation of contractors is to protect the public from inexperienced, unscrupulous, irresponsible, or incompetent contractors, and in particular those who would enter into contracts with such contractors.[3] The Board for Contractors is the agency of the Commonwealth responsible for regulation of the practice of contracting.[4] The plain meaning of the language of[5] § 54.1-1101(A)(9) clearly exempts from licensure and regulation by the Board anyone "who performs or supervises the repair or improvement of industrial or manufacturing facilities, or a commercial or retail building, for his own use."

Although persons may be exempt from licensure and regulation as a contractor by the Board for Contractors under § 54.1-1101(A)(9), they are required to comply with § 54.1-1101(C) of the Uniform Statewide Building Code,[6] which provides that:

Any person who is exempt from the provisions of [Chapter 11] as a result of subdivision 7, 8, 9, 10, 11, or 12 of subsection A shall comply with the provisions of the Uniform Statewide Building Code (§ 36-97 et seq.).

The use of the word "shall" in § 54.1-1101(C) generally indicates that such requirements are intended to be mandatory.[7] Section 36-98 of the Uniform Statewide Building Code directs and empowers the Board of Housing and Community Development to adopt and promulgate a Uniform Statewide Building Code.[8] The primary purpose of the Virginia Uniform Statewide Building Code regulations ("Building Code Regulations" or "Regulations") is "to protect the health, safety and welfare of the residents of the Commonwealth."[9] The Regulations require a certificate of occupancy indicating completion of the work for which a permit is issued "shall be obtained prior to the occupancy of any building or structure, except as provided in this section generally and as specifically provided for in Section 113.8 [13 VAC § 5-63-130(L)] for additions or alterations."[10] The only exception in 13 VAC § 5-63-160(A) (§ 116.1) from the requirement to obtain a certificate of occupancy is for "an accessory structure as defined in the International Residential Code." With regard to additions or alterations, 13 VAC § 5-63-130(L) specifically provides:

The approval of a final inspection shall be permitted to serve as the new certificate of occupancy required by Section 116.1 [13 VAC § 5-63-160(A)] in the case of additions or alterations to existing buildings or structures that already have a certificate of occupancy.

The clear provisions of 13 VAC § 5-63-130(L) permit a final inspection of additions or alterations to an existing building or structure that already has a certificate of occupancy to serve as a new certificate of occupancy.

Conclusion

Accordingly, it is my opinion that § 54.1-1101(A)(9) does not exempt business owners from the requirement to secure certificates of occupancy following renovations and repairs to commercial structures used by such owners for their business. However, the Virginia Uniform Statewide Building Code regulations[11] permit the approval of a final inspection to serve as a new certificate of occupancy for additions or alterations to existing commercial buildings.

Thank you for letting me be of service to you.

Sincerely,

Robert F. McDonnell
1:1303; 1:213; 1:941/08-097

1. See infra note 8.
2. Section 2.2-505(B) requires that an opinion request from a county attorney "shall itself be in the form of an opinion embodying a precise statement of all facts together with such attorney's legal conclusions."
3. See J.W. Woolard Mech. & Plumbing, Inc. v. Jones Dev. Corp., 235 Va. 333, 337, 367 S.E.2d 501, 503 (1988); see also Cohen v. Mayflower Corp., 196 Va. 1153, 1161, 86 S.E.2d 860, 864 (1955) (noting that licensure of contractors prohibits unqualified persons from entering into agreements).
4. See VA. CODE ANN. § 54.1-1102(A) (Supp. 2008). The Board derives its authority from §§ 54.1-201 and 54.1-1102(A) and renders "case decisions" pursuant to the Administrative Process Act.
5. See Earley v. Landsidle, 257 Va. 365, 370, 514 S.E.2d 153, 155 (1999) ("[W]hen the language in a statute is clear and unambiguous, the courts are bound by the plain meaning of that language.").
6. See VA. CODE ANN. tit. 36, ch. 6, §§ 36-97 to 36-119.1 (2005 & Supp. 2008) (codified in scattered sections).
7. See Andrews v. Shepherd, 201 Va. 412, 414, 111 S.E.2d 279, 281-82 (1959).
8. The Board has adopted regulations entitled the "Virginia Uniform Statewide Building Code." See 13 VA. ADMIN. CODE ch. 63, §§ 5-63-10 to 5-63-550 (Supp. 2008).
9. 13 VA. ADMIN. CODE § 5-63-460(A); see also §§ 36-99(A), 36-103 (2005) (providing that building code regulations are to ensure protection of public health, safety, and welfare).
10. 13 VA. ADMIN. CODE § 5-63-160(A).
11. See supra note 8.