Florida’s licensing requirements for contractors is a complicated statutory framework. This complication was exemplified in the First District Court of Appeal’s decision in Taylor Morrison Services, Inc. v. Ecos, 163 So.3d 1286 (Fla. 1st DCA 2015), a case I believe leads to more questions than actual answers relating to the status of a contractor’s qualifying agent.
Homeowners entered into a contract with a homebuilder on February 13, 2004 for the construction of a home. The homebuilder submitted a building permit application (for purposes of obtaining a building permit). A qualifying agent of the homebuilder that previously resigned from the company prior to the date of the contract executed the application. This individual testified she had no involvement with the project, did not authorize the homebuilder to pull a permit for this project, did not supervise this project, and doubted the authenticity of her signature on the application. Notwithstanding, the homebuilder had another designated qualifying agent testify he was employed with the homebuilder during various capacities during the relevant contract period. However, he also did not appear to supervise the project.
After closing, the homeowners sued the homebuilder for negligence by an unlicensed contractor (per Florida Statute s. 768.0425) due to construction defects. The issue turned on whether the homebuilder was licensed at the time of contract. The trial court ruled the homebuilder was not licensed based on the fact that the person that pulled the building permit was no longer affiliated with the contractor at the time of contract and did not supervise the construction.
On appeal, the First District focused on the following applicable language in Florida’s contracting licensing law (embodied in Florida Statutes Chapter 489):
Florida Statute s. 489.128
(1) [C]ontracts entered into…by an unlicensed contractor shall be unenforceable in law or in equity by the unlicensed contractor
(1)(a) A business organization (e.g, company) is unlicensed if the business organization does not have a primary or secondary qualifying agent in accordance with this part concerning the scope of the work to be performed under the contract.
(1)(c) A contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract for the work, if stated therein, or, if not stated, the date the last party to the contract executed it, if stated therein. If the contract does not establish such a date, the contractor shall be considered unlicensed only if the contractor was unlicensed on the first date upon which the contractor provided labor, services, or materials under the contract
Florida Statute s. 489.105
(4) “Primary qualifying agent” means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility, to supervise, direct, manage, and control the contracting activities of the business organization with which he or she is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a job for which he or she has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination as provided in this part, as attested by the department.
(5) “Secondary qualifying agent” means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility to supervise, direct, manage, and control construction activities on a job for which he or she has obtained a permit, and whose technical and personal qualifications have been determined by investigation and examination as provided in this part, as attested by the department.
Based on this language, the homeowners argued that a business organization does not have a primary or secondary qualifying agent unless a licensed contractor (qualifying agent) obtained the building permit for a project and supervised that project. The First District disagreed and reversed the trial court explaining:
The requirement that a business organization have a qualifying agent “concerning the scope of the work to be performed under the contract” refers to the qualifying agent’s type of licensure, not to the agent’s actual performance with respect to a particular job or permit or even to an agent’s assignment to a particular contract. Section 489.128(1)(a)’s requirement that the business organization have a qualifying agent “concerning the scope of the work to be performed under the contract” means the business organization must have at its disposal a person who is recognized as a qualifying agent and licensed as an individual to perform the type of work addressed in the contract.
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In consideration of the date requirement, the statutory definitions of “qualifying agent,” and the modifier “concerning the scope of the work to be performed under the contract,” we conclude that the licensure question under section 489.128(1) turns on whether the business organization is associated with a person licensed for the type of work to be performed under the contract as of the effective date of the contract, irrespective of whether that person ultimately obtains the permit and supervises the construction under the contract.
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[A] person can be a qualifying agent in a general sense, even though the person has not obtained the permit for a particular job. In other words, chapter 489 recognizes “qualifying agent” as a position with respect to a business organization and not only as a position in relation to a specific project.
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Although Appellant may have violated the law by building the home with a contractor other than the one whose name appears on the permit, by using Steiner’s license [person that resigned prior to contract] when she was not affiliated with the project, and by conducting the project with inadequate supervision, these transgressions did not retroactively render Appellant unlicensed within the meaning of section 489.128. Appellant’s apparent violations of the law occurred after the effective date of the contract. Thus, they are irrelevant to the narrow issue of whether Appellant was licensed on that date….
Taylor Morrison, supra, 1290-1292.
More Questions than Answers
What does the First District’s decision actually mean? How far does this decision extend?
-Does it mean that a non-licensed contractor that has another licensed contractor pull a permit becomes a licensed contractor simply by having the contractor that pulled the permit testify that he/she served as the qualifying agent?
-Does it mean that a licensed contactor can simply loan his/her license by pulling permits and testifying he/she served as the qualifying agent despite having no involvement or, perhaps, knowledge of the project?
-Does it mean that a contracting company that loses its qualifier can have any licensed contractor testify that he/she was serving as the qualifier of the company?
-Does it mean that an unlicensed contracting company can have a permit pulled by a sister company, parent company, or related company as long as the person that pulled the permit testifies that he/she served as the qualifier of the company?
-Does it mean that it is acceptable for a contractor to construct a project by another person/ licensed contractor that was not identified on the permit?
Here, the homebuilder had another employee testify that he served as a qualifying agent of the homebuilder even though he did not pull the permit or supervise the construction. Apparently, though, he was listed as a qualifier of the company on the effective date of the contract. Thus, even though the qualifier did not sign the permit application, the homebuilder still had a qualifier, and was thus licensed, as of the effective date of the contract. This makes sense; it is just uncertain how far this rationale extends relating to qualifying agents when determining whether a contractor was licensed or unlicensed (see unanswered questions above).
Importantly, and irrespective of whether the homebuilder was licensed, the court noted that whether the qualifier carried his responsibility faithfully was a separate question not before the court. Thus, the court left open the door for potential claims and transgressions relating to this issue in other analogous matters.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.