Commercial vs. Residential Contracting
What’s the Difference—And Why It Matters
When you’re planning a commercial construction project—whether that’s a new office, warehouse, retail space, or tenant improvement—the choice of contractor can make or break your success. While it may be tempting to hire someone you know from residential work (or someone offering a “deal”), the difference between commercial and residential contracting runs far deeper than price or square footage.
Hiring the wrong type of contractor can lead to code violations, failed inspections, budget overruns, and significant business disruption. Let’s break down the differences—and why hiring a licensed commercial contractor is essential for commercial jobs.
1. Code Compliance and Permitting
Commercial properties must meet stricter and more complex standards than residential ones. Commercial construction follows the International Building Code (IBC), often combined with local fire codes, strict ADA requirements, zoning ordinances, and energy regulations. Residential projects typically follow the simpler International Residential Code (IRC).
Because of the required codes, Commercial general contractors are trained and licensed to navigate this environment. Residential contractors typically are not—and may unintentionally submit incorrect plans, cause inspection failures, or build to non-compliant specifications.
2. Materials and Construction Systems
The materials and systems used in commercial projects differ significantly from those used in residential construction. Commercial builds often include:
Steel framing or concrete tilt-up walls instead of wood
TPO or EPDM roofing membranes rather than asphalt shingles or clay tile
3-phase electrical systems to support commercial-grade equipment
High-capacity HVAC units and multi-zone ducting
Fire sprinkler systems, which require special permitting and design coordination
Specialized drywall required for specific applications
Residential contractors may not have experience with these systems—or with the specialized subcontractors and suppliers required to install them correctly. That can result in improper installations, warranty voids, or even dangerous conditions.
3. Subcontractor Network and Trade Knowledge
Another critical difference is the network a contractor has built with subcontractors. Commercial contractors work with tradespeople who are experienced in commercial scopes—such as fire alarm installers, commercial electricians, and HVAC technicians licensed for larger systems. These subcontractors understand the demands of commercial timelines, inspections, material handling, and OSHA-compliant jobsite conduct.
Residential contractors, on the other hand, typically rely on subcontractors who specialize in residential work. These teams may be excellent at what they do, but they may not carry the appropriate commercial licenses, insurance coverage, or certifications required on commercial job sites. More importantly, they may be unfamiliar with fire separation assemblies, ADA upgrades, high-load HVAC, industrial finishes, or multi-zone systems common in commercial builds.
This mismatch can become a serious issue when commercial-level tasks—like installing a monitored fire alarm system, coordinating with utility providers, or applying an intumescent fireproofing product—are handed to subcontractors who have only ever worked on single-family homes.
While it’s technically possible for a residential contractor to hire commercial-grade subcontractors, those commercial trades are likely to charge more due to the absence of an existing relationship. Without negotiated rates built over years of collaboration, pricing will often reflect one-time or “retail” rates rather than the preferred pricing offered to long-time commercial partners. That cost difference, combined with potential delays from unfamiliar coordination, can quickly eat into a budget.
4. Scheduling and Business Impact
Delays in residential projects can be inconvenient, but in commercial construction, they can be financially damaging. Whether a tenant needs to move in or a business is preparing for a grand opening, every day of delay can translate into lost income or liquidated damages. Commercial contractors understand these stakes and are experienced at coordinating multi-trade teams, inspections, and material deliveries with tight, dependable schedules.
5. Licensing, Insurance, and Liability
Commercial contractors carry licenses specifically for large-scale and public-use construction. They also carry higher levels of insurance, bonding, and risk management coverage. A residential contractor might not be legally allowed to pull permits on a commercial project—or may not carry enough insurance to cover damages or jobsite injuries. This can create major liabilities for building owners and developers.
If you’re unsure about hiring a specific contractor, you can always look up their company through your state’s contractors board to see THEIR exact QUALIFICATIONS. here is Nevada’s!
Can Commercial Contractors Build Residential Projects?
Yes, and they often do, especially when it comes to multifamily housing and custom homes.
At Brandise Construction, our unlimited license allows us to build both commercial and residential projects of any size or complexity. We've delivered successful multifamily developments and high-end custom residences with the same level of precision and professionalism we bring to our commercial work.
Clients appreciate the added value of commercial-grade oversight, stronger subcontractor performance, and long-term build quality—even in residential applications.
What If I Still Want to Hire a Residential Contractor for My Commercial Project?
In rare cases, it may be acceptable to use a residential contractor—for example, small-scale cosmetic updates in a property with residential zoning that doesn’t involve structural changes or mechanical, electrical, or plumbing work. In these limited situations, and only if the contractor is properly licensed and insured, it may be a workable option.
However, for most commercial projects, this approach carries significant risk. We’ve seen many instances where residential contractors submitted lower bids on commercial work, only for it to become clear that key elements of the scope were missing. Often, it’s not intentional—they simply aren’t familiar with the full range of commercial requirements.
The result is typically more change orders, delays, and rework—costing more in the long run than hiring a qualified commercial contractor from the outset.
What about my Multifamily project?
Multifamily housing—such as apartment buildings, condominiums, and townhomes—is typically classified as residential from a zoning and occupancy standpoint. However, multifamily projects often require commercial-grade construction practices due to their size, complexity, and the systems involved (e.g., fire sprinklers, common area HVAC, multiple electrical panels, and more).
This means that while multifamily is legally residential, the construction process demands the expertise of contractors experienced in commercial building codes, permitting, and trade coordination.
Build It Right the First Time
Ultimately, it’s up to you to evaluate the qualifications of the contractor you choose. Just be sure your decision is based not only on price, but on experience, licensing, trade relationships, and the specific demands of your project.
When evaluating contractors for your project, we hope you’ll consider Brandise Construction. With over 55 years of experience in commercial, multifamily, and custom residential construction across Southern Nevada, we bring a depth of knowledge that only time and dedication can build. We understand the codes, source the right materials, and work with trusted subcontractors to ensure every phase of your project runs smoothly. As one of Nevada’s first unlimited licensed general contractors, we’re fully qualified to handle projects of any size or complexity—from planning to completion—with transparency, professionalism, and results built to last.
