Previously, we posted an article about the Florida’s court’s decision in Earth Trades, Inc. v. T&G Corp., 2013 WL 264440 (Fla. 2013), which demonstrates the huge risk an unlicensed contractor undertakes by entering into a contract based on Florida Statute s. 489.128 that would render contracts by the unlicensed contractor unenforceable in law or equity.
Well, unfortunately for the unlicensed contractor, there are more harsh realities further demonstrated by the Fourth District Court of Appeal’s ruling in Home Construction Management, LLC v. Comet, Inc., 2013 WL 440101 (Fla. 4th DCA 2013). This case references Florida Statute s. 768.0425 which provides in material part: “In any action against a contractor for injuries sustained resulting from the contractor’s negligence, malfeasance, or misfeasance, the consumer shall be entitled to three times the actual compensatory damages sustained in addition to costs and attorney’s fees if the contractor is neither certified as a contractor by the state nor licensed as a contractor pursuant to the laws of the municipality or county within which she or he is conducting business.”
In Home Construction Management, an owner hired an unlicensed contractor to complete the construction of a residence. Due to issues that are not discussed in the case, the owner sued the contractor for treble damages pursuant to s. 768.0425 and recovered a judgment against the unlicensed contractor (although the appellate court found that the representative of the unlicensed contractor–likely the person that signed the contract–was not a specific party to the contract and could not be liable for treble damages).
Besides the unlicensed contractor being unable to enforce its contract in any way, shape, or form in the event they are not paid, they could expose themselves to treble damages under s. 768.0425 (in addition to having to pay back all funds it received as an unlicensed contractor since a party cannot profit from an illegality). Statute 768.0425 is potentially extremely harsh because this statute would extend to contractors that do not necessarily need to be licensed by the state, but need to be licensed by a local jurisdiction in which they are performing work!!! Thus, ensuring proper licensure is important to any contractor performing work, regardless of whether that work requires a license by Florida’s Construction Industry Licensing Board.
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.