North Dakota Code 43-07-02 – License required – Construction fraud – Penalty
1. A person may not engage in the business nor act in the capacity of a contractor within this state when the cost, value, or price per job exceeds the sum of four thousand dollars nor may that person maintain any claim, action, suit, or proceeding in any court of this state related to the person’s business or capacity as a contractor without first having a license as provided in this chapter.
Attorney's Note
Under the North Dakota Code, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| Class A felony | up to 20 years | up to $20,000 |
| Class B felony | up to 10 years | up to $20,000 |
| Class C felony | up to 5 years | up to $10,000 |
| Class A misdemeanor | up to 360 days | up to $3,000 |
Terms Used In North Dakota Code 43-07-02
- Contract: A legal written agreement that becomes binding when signed.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Fraud: Intentional deception resulting in injury to another.
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
2. Any person acting in the capacity of a contractor without a license is guilty of a class A misdemeanor. Regardless of whether a person is subjected to criminal prosecution under this subsection, and in addition to the license fee that may be assessed when the person applies for a license, the person may be assessed a civil penalty by the registrar, following written notice to the person of an intent to assess the penalty, in an amount not to exceed three times the amount set forth in section 43-07-07. Any civil penalty must be assessed and collected before a person is issued a license. The assessment of a civil penalty may be appealed in the same manner as appeals under section 43-07-04.
3. A person commits construction fraud if:
a. The person receives payment for a construction project by intentionally using deception as defined in section 12.1-23-10.
b. The person receives payment for the purchase of materials or supplies and willfully fails to pay the supplier for the goods received.
c. The person willfully abandons a construction project after receiving payment for services or materials. Abandonment under this subdivision arises if:
(1) A contractor fails substantially to commence any work agreed upon: (a) Within sixty days of a starting date agreed upon in writing; or
(b) Within ninety days of the contract date if no starting date is agreed upon in writing; or
(2) A contractor fails to complete any work agreed upon in writing within ninety days of a completion date agreed upon in writing, or within one hundred eighty days of the contract date if no completion date is agreed upon in writing.
4. It is a defense to prosecution under subsection 3 if:
a. The person returned all of the payment received for work not performed or materials not supplied. If the person provided materials to the jobsite but did not pay suppliers for those materials, this defense does not apply. This defense is only valid if the payment was provided before criminal charges were filed.
b. The person had a legitimate legal excuse for nonperformance.
c. The person was not able to begin or complete the project because there were factors outside of the person’s control and the person made substantial efforts to resolve any dispute.
5. The grade of the offense for violating subsection 3 is based on the amount of payment received. Payment of under ten thousand dollars is a class C felony; more than ten thousand dollars but not more than fifty thousand dollars is a class B felony; and more than fifty thousand dollars is a class A felony.