When a construction project runs into problems, tensions can run high and the Florida general contractor’s license provider is often blamed. In these circumstances, an owner may feel that they have no alternative but to go the legal route. This usually entails a lawsuit by the property owner against the general contractor. When this happens, it is important for general contractors to have all their ‘t’s crossed and ‘i’s dotted as the property owner will look to leverage any potential pressure point to gain an advantage.
Can general contractors in Florida be held liable for hiring an unlicensed subcontractor? Here are some things to bear in mind.
Aiding and Abetting of Unlicensed Work
The general contractor could assist or promote unlicensed work. One of the ways this can take place is when one of the subcontractors on the project is unlicensed. Here, the owner may accuse the general contractor of engaging in work that is not licensed, or they may accuse the general contractor of aiding and abetting unlicensed work. Clauses in the Florida Statutes stipulate the penalties for any work that is not licensed (including the aiding and abetting of unlicensed work). These charges are serious and have stiff penalties, including the possibility that the general contractor would be liable for treble damages as well as having to pay for the owner’s attorneys’ fees.
Legal Precedent Protects General Contractors
However, there is a vital distinction between knowingly and unknowingly aiding and abetting unlicensed contracting. If a general contractor in Florida uses a subcontractor without a license from a contractor license provider in Florida, but who has confirmed that they hold the relevant active license, then the general contractor will not be held liable. This is based on the outcome of Blume vs Department of Professional Regulation, 489 So. 2d 880 (Fla. 2d DCA 1986) where Blume, the general contractor, subcontracted out work to a subcontractor who confirmed that they had the relevant license when in fact, they did not.
A failure by the general contractor to validate the license of the subcontractor was not deemed to constitute a violation of the prohibition against aiding and abetting unlicensed contracting. The decision was appealed, and the Second District court upheld the decision as “aiding and abetting” requires active participation and an intention to participate in the illegal act. Because Blume had not intended for unlicensed work to be performed, they could not be held liable for aiding and abetting the work.
Implications for General Contractors
This legal precedent illustrates that contractors by law do not have to determine that their subcontractors hold a valid license. However, unless the general contractor intended for unlicensed work to be done, they cannot be held liable for aiding and abetting unlicensed work. So, when general contractors are being threatened with a lawsuit by the owner of a project, it is good to know that owners cannot threaten to hold the general contractor liable for subcontractor‘s license non-compliance. However, it is still best practice to ensure that all subcontractors that are hired for a project are licensed to complete the work for which they have been hired.
In summary, a general contractor is not liable for unlicensed subcontractors unless work is given to them knowing that they do not have the relevant license. The fault would fall on the subcontractor for attempting to mislead.
The role and requirements for Tampa contractors must be understood and they need to carry up-to-date paperwork. Contractors Reporting Services in Tampa, Florida, has been working with general contractors in the construction industry for over 50 years. They have the relevant experience to ensure that Florida general contractors license requirements are met, and that general contractors’ licenses stay completely up-to-date.
They will assist with an application for a general contractor’s license, run financial stability reviews and reports, assist with the set-up of S-Corporations or C-Corporations, and keep local license and registrations up-to-date. They also have experience in preparing additional entries in the case of multiple licenses, filing annual reports, and offering in-house construction accounting services.