The Penalties for Unlicensed Contracting Can be Severe
There are a lot of great things about living in South Florida. However, one not so great thing is the number of people who say that they are licensed to do projects, improvements, or construction on your home, but who are not.
Anybody who hires a contractor to do significant work, whether on business or residential property, should make sure that the company or person they hire, is properly licensed. Other steps you can take to protect yourself include doing searches for past lawsuits, making sure you only have written and not verbal contracts with the contractor and seeing if the contractor has permitting privileges.
Warnings for Unlicensed Contractors
If you are the one doing the work, it is important to keep your licenses up to date, as there can be serious penalties for performing unlicensed contracting or construction related jobs. Some of the penalties include:
- The voiding of your contract – Under Florida law, any contract entered into with someone who is not licensed, is unenforceable. That means that if you do work, expend money, and then expect to be paid, you could find yourself with nothing. The party you did the work for has the legal right to void or nullify your agreement.
Voiding of the contract is not the only problem. If you have already been paid, a court can order you to pay back whatever you have been paid. This is often called disgorgement. That means that getting paid is not the end of the potential problem for you.
- Inability to lien – one of the most vital ways that a contractor ensures that he or she gets paid, is the imposition of a lien on the property where the work was conducted. However, no lien can be placed, and no lien is legally valid if placed by, someone who is unlicensed.
- Additional damages – If you are “lucky,” and you perform work while not being licensed, you just won’t get paid. We say that because you could be even less lucky if there is a claim for negligence or malfeasance against you and you are unlicensed. In that case, you could owe up to three times the damages to the other side.
- Criminal penalties – If everything else listed here isn’t bad enough, it is a crime to do contracting work when you are not licensed. The first offense is a misdemeanor, with subsequent offenses being felonies. If you do unlicensed work during a declared state of emergency, you could be liable for up to a third degree felony.
All this is in addition to other remedies, such as violations of Florida’s Unfair and Deceptive Trade Practices Act. Consumers who sue under this act, can receive their attorneys’ fees in addition to any damages against the unlicensed contractor.
Questions about a business law case? Our West Palm Beach business litigation lawyers can help. Call Pike & Lustig, LLP, at 561-291-8298. We try cases in court for businesses, employees, independent contractors, and anyone else who has a business related case.