Every construction project comes with plenty of applications, negotiations, and if we’re being honest, too much paperwork. It can be exhausting going through the motions of every project, but the contracting process is just as important as the work itself. One key step is ensuring the contractors and subcontractors doing work on the project actually have the necessary licenses and registrations to do the work on each project.
Recently, in ABA Interior Inc. v. The Owen Grp. Corp, the courts ruled the failure to do so in Florida renders contractors ineligible to do and be paid for the work. In this case, ABA Interior signed as a subcontractor with the Owen Group to do work on a commercial project. Throughout the course of the work and when the work was completed, Owen Group paid ABA for the work but stopped payments once the company realized ABA had not obtained the proper registrations (specifically a certificate of competency in Palm Beach County). The court also ruled ABA gave up its right to litigation by failing to comply with the subcontract agreement.
This case highlights the major risks of failing to be thorough in your construction contracts. Soon, the process will become simpler when almost all licenses go through the Florida Department of Business & Professional Regulation (DBPR). The change doesn’t take effect until July 1, 2023, though, so it’s imperative that every party involved in the process follows any local ordinances on construction contracts.
Not every county requires you to have the same licenses. In the case highlighted above, ABA failed to receive the proper certificate in Palm Beach County but attempted to subvert this by filing in another county court. The court ruled it’s about where the work takes place, so you should check with your county to make sure you have the proper licenses before committing to or starting any work. If you’re unable or unwilling to meet those requirements, you are allowed to negotiate a contract that skips certain license and registration requirements.At the end of the day, the best way to protect everyone involved is to acquire all proper licenses, whether you’re a general contractor, subcontractor, or any other worker who could potentially get involved in the work on a construction project. The right construction law attorney can protect you and your work. At Florida Construction Law Group, we know Florida law. Contact our offices today and get your work started and protected.