1.2 Qualifying Person Requirements & Continuing Education

Qualifying Person Requirements & Continuing Education

In Minnesota, a contractor license is issued to a business entity—whether a sole proprietorship, partnership, limited liability company (LLC), or corporation. However, a business entity cannot take a written examination or supervise a construction site on its own. State law therefore requires every licensed business entity to designate an individual who fulfills the statutory role of the Qualifying Person (QP). This section details the qualification standards, legal obligations, disassociation rules, and mandatory continuing education requirements governing QPs under Minnesota Statutes.

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1. Definition & Role of the Qualifying Person (QP)

Under Minn. Stat. § 326B.825, a Qualifying Person (QP) is defined as an owner, officer, partner, member, or managing employee of a residential contracting business who has passed the required state written examination and satisfies all statutory qualification requirements.

Who Can Serve as a QP?

To serve as a QP for a licensed entity, an individual must hold one of the following official capacities within the business structure:

1. Sole Proprietor: The individual owner of a sole proprietorship.
2. Partner: A general partner in a partnership.
3. Corporate Officer: An officer (such as President, Vice President, or Chief Executive Officer) of a corporation.
4. LLC Member or Manager: A governor, manager, or member of a limited liability company.
5. Managing Employee: A W-2 employee who exercises managerial control and direct daily supervision over the entity's residential contracting activities.

┌──────────────────────────────────────────────────────────────────────────┐
│                     QUALIFYING PERSON ELIGIBILITY                        │
├──────────────────────────────────────────────────────────────────────────┤
│  Individual must be ONE of the following within the business entity:     │
│                                                                          │
│  [ Sole Proprietor ]   [ General Partner ]    [ Corporate Officer ]      │
│  [ LLC Member/Mgr ]   [ W-2 Managing Employee with Operational Control ] │
├──────────────────────────────────────────────────────────────────────────┤
│  AND must pass the Minnesota QP Written Exam ($150 fee)                  │
└──────────────────────────────────────────────────────────────────────────┘

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2. Statutory Duties & Legal Power to Bind

Designation as a Qualifying Person is not merely an administrative title; it carries substantial legal and regulatory obligations under Minnesota law.

Core Duties of the QP under Minn. Stat. § 326B.825

• Supervision of Construction: Direct responsibility for supervising and controlling all residential building, remodeling, or roofing projects executed by the business entity.
• Building Code Compliance: Ensuring that all work performed by the firm and its subcontractors complies strictly with the Minnesota State Building Code and local municipal ordinances.
• Power to Bind the Entity: Exercising legal authority to act on behalf of the business entity in all dealings with the DLI, building officials, permit issuers, and regulatory agencies.
• Safety & Regulatory Oversight: Maintaining compliance with Minnesota OSHA workplace safety standards, lead paint regulations, and state worker classification laws.

Restriction on Qualifying Multiple Entities

To prevent "straw QP" arrangements where an individual lends their exam credential to multiple independent businesses without providing actual supervision, Minnesota rules strictly restrict QP multi-entity representation:

• A QP cannot qualify more than one licensed contracting entity at a time unless there is significant common ownership (typically at least 25% common ownership) across the entities.

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3. QP Examination & Experience Requirements

To obtain QP status, an applicant must demonstrate competency by passing the state written examination administered by the DLI's approved testing vendor.

Examination Logistics

• Examination Fee: $150 per attempt.
• Format: Closed-book, computer-based multiple-choice examination.
• Tested Content Areas: Minnesota State Building Code, MN Energy Code, structural framing, moisture protection, business management, accounting, contract law, mechanics' lien law, MN OSHA safety standards, and environmental regulations (lead paint/asbestos).
• Passing Score: Set psychometrically by the DLI; candidates receive pass/fail score reports upon completion.

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4. QP Departure & The 120-Day Grace Period (Minn. Stat. § 326B.83)

When a Qualifying Person leaves a licensed contracting entity—whether due to resignation, termination, retirement, disability, or death—the business entity's license status is immediately impacted.

Statutory Disassociation Procedure

Under Minn. Stat. § 326B.83, the following timeline and requirements apply when a QP disassociates from a licensee:

1. 15-Day Written Notice: The licensee must notify the DLI in writing within 15 calendar days of the QP's disassociation or departure date.
2. 120-Day Grace Period: The licensed entity is granted a statutory 120-day grace period from the date of the QP's departure to designate and qualify a new QP.
3. Business Operations During Grace Period: During the 120-day grace period, the business entity may continue operating and completing existing construction contracts under the active license.
4. Failure to Qualify Replacement: If the entity fails to designate a new QP who has passed the state exam and met all requirements within the 120-day window, the entity's license is automatically suspended by operation of law.

┌──────────────────────────────────────────────────────────────────────────┐
│            QP DISASSOCIATION TIMELINE (Minn. Stat. § 326B.83)            │
├──────────────────────────────────────────────────────────────────────────┤
│ Day 0: QP Resigns / Departed                                             │
│ │                                                                        │
│ ├─► Within 15 Days: Must notify DLI in writing                           │
│ │                                                                        │
│ └─► Within 120 Days: Must designate & qualify replacement QP             │
│                                                                          │
│ Outcome A: New QP approved within 120 days ──► License remains ACTIVE    │
│ Outcome B: No QP approved after 120 days   ──► License SUSPENDED         │
└──────────────────────────────────────────────────────────────────────────┘

Exam Tip: Pay close attention to these two distinct numbers: 15 days to notify DLI of departure, and 120 days total grace period to designate a replacement QP before automatic license suspension.

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5. Continuing Education (CE) Mandate: 14-Hour Biennial Requirement

To maintain active licensing credentials, Minnesota requires Qualifying Persons to engage in ongoing professional development. The statutory Continuing Education (CE) framework ensures contractors stay updated on evolving building codes, energy efficiency standards, safety laws, and business regulations.

Statutory CE Rules (Minn. Stat. § 326B.821)

• Total Required Hours: 14 hours of DLI-approved continuing education during each two-year license period.
• Reporting Period: All 14 hours must be completed prior to the license renewal deadline of March 31 in the renewal year.
• Approved Providers: CE credits must be obtained through DLI-approved course sponsors and instructors.

Mandatory Course Content Breakdown

Out of the total 14 required hours, Minnesota mandates two specific core subjects that must be included in every QP's biennial CE transcript:

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6. Step-by-Step Summary of QP Responsibilities

1. Obtain Designation: Secure appointment as sole proprietor, partner, corporate officer, LLC governor/manager, or W-2 managing employee.
2. Pass State Exam: Pay $150 exam fee and pass the Minnesota Residential Building Contractor, Remodeler, or Roofer QP examination.
3. Exercise Direct Supervision: Maintain continuous oversight over jobsite construction quality, building code compliance, and subcontractor activities.
4. Maintain 14 CE Hours: Complete 14 DLI-approved CE hours biennially, including at least 1 hour of MN Energy Code and 1 hour of business management/law.
5. Manage Disassociation Promptly: In the event of departure, ensure 15-day notice to DLI and replacement within the 120-day grace period.