Out of State Contractor Beware – Florida Requires Licensing
Although the impact of the Corona Virus on the economy remains to be seen, the construction industry is off to a strong start in 2020, with “[s]eventy percent of contractors expect[ing] their sales to increase over the first half of 2020.” Major trends in the U.S. such as infrastructure upgrades and smart city planning by local municipalities point to opportunities for construction firms. If your firm is considering taking advantage of the construction growth in the State of Florida, there are a few things to keep in mind.
Florida Requires Contractors to Obtain a License
Florida law does not provide reciprocity for out-of-state contractors and requires that all contractors obtain a license in the form of a certification or registration from the Florida Construction Industry Licensing Board which is charged with licensing and regulating the construction industry in the state of Florida.
State Certification vs. Registration
State certification permits a contractor to perform contracting services throughout the state, while registration permits a contractor to perform services only in a particular municipality. See Chapter 489, Part I, of the Florida Statutes and 61G4 of the Florida Administrative Code.
Local Certification vs. Registration
However, city and county ordinances can require local specialty licenses for other types of construction, so be sure to check with the local municipality where you will be performing the work. And some municipalities also have local ordinances and rules.
Here are the requirements for becoming a certified, registered or out of state contractor in Florida
Certified Contractors –State Certified Contractors are authorized to contract anywhere in Florida. The requirements for state-wide certification are as follows:
- Four years experience in the category for which the contractor seeks a license of which one year must be supervisory experience. A Florida Certified contractor, licensed architect, engineer or building official in the U.S. must attest to the experience;
- Successful completion of the Florida Certified Contractor’s examination;
- Worker’s compensation insurance (or exemption); liability and property damage insurance;
- Must provide credit reports, proof of satisfaction of liens and judgments, and proper showing of financial stability, including net worth requirements under Rule 61G4-15.005, FAC
Registered Contractors–Registered Contractors must meet local requirements for counties and municipalities and obtain a local competency card and occupational license and must register the competency card with the Florida Department of Business and Professional Regulation. A registered contractor can only work in the county or municipality for which he or she has obtained a competency card.
- Workers Comp. (or exemption),
- Liability, and Property Damage insurance
- Credit reports, proof of satisfaction of liens and judgments and proper showing of financial stability, including net worth requirements under Rule 61G4-15.005, FAC.
Licensure by Endorsement-If you have an out of state license, Florida Statutes provide for licensure by endorsement as an option. However, licensure by endorsement is not guaranteed and it requires board approval. Applicants must be scheduled to appear before the board which meets monthly. Applicants must provide the following:
- Proof of having passed a national, state, or U.S. Regional Examination that is substantially similar to the Florida Examination
- Must provide the above information regarding insurance, credit, finances, net worth, etc.
Additional Requirements for Contracting in Florida
In addition to obtaining a contractor’s license, there are additional requirements for a contractor to operate legally in the State of Florida.
- Must obtain Worker’s Compensation Insurance
Information for Out of State Contractors: Worker’s Comp Requirements: https://myfloridacfo.com/Division/wc/Employer/Out-of-State/default.htm
- Register Corporation with the Secretary of State, Division of Corporations.
- Obtain Liability Insurance
- Become Familiar with Florida’s Construction Lien Laws.
Who Requires a License
Florida requires the following categories of contractors to register or obtain certification:
- Building Residential
- Sheet Metal
- Swimming Pool/Spa
- Underground Utility and Excavation
- Solar and Pollutant storage
- If the work you will be performing creates or modifies a structure, you will most likely require a state residential, building or general contractor license.
Consequences of Contracting in Florida Without a License
Contracting in Florida Without a License is a Crime. In Florida, failure to obtain the required license or certification by an out-of-state contractor has serious consequences. Unlicensed contracting may be charged as a first-degree misdemeanor up to a third-degree felony. Sec. 775.082 and 775.083, Fla. Stat.
Some municipalities also have local ordinances and rules that impose additional fines and penalties for unlawful contracting in Florida.
Advertising in Florida Without a License is also a Misdemeanor
It is also illegal to advertise construction services without a license. Advertising services regulated by Chapter 10, Code of Miami-Dade County or Chapter 489, Florida Statutes without proper certification is a misdemeanor. Violation may subject an unlicensed contractor to fines, penalties, and administrative fees.
Contracting in Florida Without a License Renders a Construction Contract Unenforceable by the Contractor.
Additionally, as a matter of public policy, contracts entered into by an unlicensed contractor are unenforceable in law or equity. See, sec. 489.128, Fla. Stat. If a contract is rendered unenforceable under this provision, no lien, or bond claim exists in favor of the unlicensed contractor for any labor, services, or materials provided under the contract or any amendment to the contract.
Further, the unlicensed contractor will not be able to raise any of the ordinary defenses to payment or services at the contracted rate or the fact that the general contractor or owner is aware that the contractor was unlicensed.
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