Design-build firms are not required to hold a contractor’s license in Florida. They’re also not required to have an engineer’s license. Architect’s license? Nope, they don’t have to hold that one either.
But, there is a catch. A person or entity performing or offering to perform design-build services in Florida must hold at least one of those licenses. Otherwise, the person or company may be engaged in unlicensed contracting under Florida law and exposed to serious legal consequences.
Additionally, the person or entity must make sure that any scope of work for which it is not licensed is performed by a properly licensed individual or entity. For example, if you are a licensed architect or engineer, the construction services to be performed under a design-build contract must be performed by a licensed general contractor. If you’re a licensed contractor, the architectural or engineering services offered in connection with a design-build contract must be performed by a licensed design professional.
Don’t cut any corners when it comes to proper licensure. The risks involved are just too great. Here’s a look at some of the risks:
No means to enforce the contract: An unlicensed person or entity cannot look to the law for help if the other party isn’t carrying out its end of the bargain. In other words, the court will not enforce any contractual provisions that may be favorable to you.
You can be sued: Despite your inability to enforce the contract against the person or company who employed your services, they can take you to court for a number of reasons and they can enforce the contract against you!
No lien rights: If you’re not properly licensed, you may not record a lien against the improved property. If you do, get out your checkbook. You may be liable for a long list of damages, including actual damages, attorney’s fees, court costs and punitive damages.
Criminal charges: Unlicensed contracting is a first-degree misdemeanor under Florida law, which means you can be fined up to $1,000. You’ll be committing a third-degree felony if you’re caught unlicensed a second time or if you’re found to be performing, or offering to perform, unlicensed services during a “state of emergency,” as declared by the Governor. Then you could be facing a fine of up to $5,000.
Triple damages: Under Florida law, any amount awarded to an owner for damages caused by an unlicensed person or entity is tripled. For example, if the court ruled that an unlicensed entity caused $50,000 worth of damage for failing to properly secure a roof, the resulting judgment would be for $150,000.
Deceptive and Unfair Trade Practices Act: Unlicensed contracting may also be a violation of Florida’s Deceptive and Unfair Trade Practices Act. If found guilty under this Act, you could wind up paying the other side’s attorneys’ fees (in addition to your own), court costs and fines of up to $15,000.
Bottom line: before you or your company thinks about offering design-build services in Florida, talk to an attorney that is familiar with Florida’s licensing laws.