In 2007, the Washington State Legislature expanded the definition of a “Contractor” to include any person or entity who improved real property, unless the property being improved was being worked on by the residential homeowner. Thus, an investor or “home flipper” was required to obtain a bond, maintain insurance and register as a contractor with the Department of Labor and Industries. The purpose of the 2007 amendment was to crack down on disreputable “flippers.” A home flipper who did not register could be fined up to $1,000 by the Department of Labor and Industries for failing to register. However, during the 2015 legislative session the Legislature passed SHB 1749 which amended the definition of a contractor.
Beginning on July 24, 2015, “any person, firm, corporation, or other entity…who offer[s] to sell their property without occupying or using the structures, projects, developments or improvements for more than one year from the date the structure, project, development or improvement was substantially completed or abandoned” must register as a contractor unless that person, firm, corporation or other entity “contracts with a registered general contractor and does not superintend the work.” RCW 18.27.010(1)(c). What this means is that a home flipper or developer need not register as a contractor if they hire a general contractor and do not supervise the work. However, a home flipper or developer should register as a contractor if they act as a general contractor and/or supervise the work on the property. It appears that this new definition would apply to both residential and commercial properties.