Legal Q and A: Before you take that Florida project ...

Attorney Michael C. Larmoyeux Jr. is a partner in Bilzin Sumberg's Construction Group and represents owners and developers in the design, construction and development of a wide array of projects, including apartments, luxury high-rise condominiums, hotels, industrial, affordable housing, commercial and mixed-used projects. He handles the negotiation and preparation of construction agreements, professional design agreements and developer agreements and represents owners and developers in disputes arising from design and construction agreements.

Q. We have a customer that is expanding into Florida with new apartment complexes and told us that we don't need a license (general contractor) if we are just running a few projects. Is this true?

A. No. Although obtaining a contractor’s license in Florida is a time-consuming and rigorous process, a license is required to legally work as a contractor in the state. While newcomers to the Florida market may believe contractor licensing to be no more than needless red tape, one should consider whether one would hire an unlicensed physician. Unlicensed physicians that practice medicine have a certain pariah status in the community, and for good reason. They have abused the trust placed in them by their patients, and their actions can lead to tragic results for those patients.

On the same token, the consequences of poor construction, substandard building materials, defective components and vanishing contractors expose unsuspecting owners to unacceptable physical and economic risks that can lead to years of heartache and nightmares. In 1967, in an effort to protect the public, the Florida Legislature initiated state regulation of contractors, and the following year authorized contractor licensing, now regulated through F.S. Ch. 489.

Under Florida’s current statutory scheme, F.S. Ch. 489 provides the regulatory vehicle for contractor licensing, establishing a Construction Industry Licensing Board (CILB), imposing barriers to entry based on competence, experience, education, examination requirements, creditworthiness, insurability and moral rectitude. 

These requirements are demanding and vary slightly depending on the type of contractor’s license. Justifiably, being unlicensed and performing construction work that requires licensure can lead to a variety of penalties for the unlicensed contractor. Said consequences can come in the form of criminal and administrative sanctions, loss of construction lien rights, treble damages and more.

Q. We are undertaking a few projects in Florida and have obtained a general contractor's license. Does that allow us to self-perform all of our work?

A. No. An active Certified General Contractor is permitted to enter into contracts to build anything in Florida. The general policy in Florida is that construction work must be performed by an appropriate licensed contractor unless exempt from licensure under Section 489.103, F.S. While Certified General Contractor may contract for the work, whether they are permitted to self-perform the work is another intricately detailed analysis.

Section 489.113, F.S., provides guidance in the analysis. As a basic requirement, a general contractor must subcontract all electrical, mechanical, plumbing, roofing, sheet metal, swimming pool and air-conditioning work. The Certified General Contractor does not have to subcontract if he/she holds a state certificate or registration in the respective sub-trade category. If they hold the sub-trade license, then they can legally do the work.

If the Certified General Contractor self-performs sub-trade work without a license, they can be exposed to discipline for working outside the scope of the Certified General Contractor license—facing the same potential penalties as outlined in the previous question's answer.

Q. We are general contractors and have trusted subcontractors we work with all the time. Can they come into Florida and work under our general contractor's license there?

A. It depends. Section 489.113(2) provides that subcontractors working within the scope of the contractor’s license are exempt if a state license is not required. For example, if a licensed general contractor employs a subcontractor to perform concrete placement work, and the contractor supervises and takes responsibility for the subcontractor’s work, the subcontractor need not be licensed. This exemption does not apply to plumbing or other subcontractors whose work requires a state license.

*This was republished with permission from The Construction Broadsheet. Click here to access the publication.