After the recent devastation left behind from Hurricane Irma, there is an immediate need for contracting services to repair and rebuild the damaged areas. As communities are struggling to rebuild, the memories and lessons learned from Hurricane Andrew are starting to fade. The catastrophic damage from Andrew lead to changes in the insurance industry and construction activities. The Florida Legislature recognized the need for public protection from dishonest contractors who solicited hurricane victims by offering unlicensed, unsafe, unstable, and unregulated products and services.
Chapter 489, Florida Statutes, regulates the construction industry in Florida. The current version of the statute addressing the enforceability of a construction contract with an unlicensed contractor provides in pertinent part:
As a matter of public policy, contracts entered into on or after October 1, 1990, by an unlicensed contractor shall be unenforceable in law or in equity by the unlicensed contractor.1
Florida courts have interpreted the statute to mean that a contract is unenforceable in its entirety if any portion of the contract involves unlicensed activity. Some Florida contractors have raised the common law defense of in pari delicto, based on the principle that an insured who participated in wrongdoing (i.e., knowledge that a contractor is unlicensed) may not recover damages resulting from the wrongdoing.2
Board members should consider the following before hiring any contractor for repairs:
A prudent association should require contractors and other professionals to provide proof they are licensed and insured. You may also visit www.myfloridalicense.com to obtain proof and verify that the license is current and in good standing. The website also provides information related to any complaints or disciplinary actions brought against a contractor.
Structure of the Contract
Always make sure that the association attorney reviews and prepares the contract. You may hold the contractor liable for damages, other than a pre-existing one, by incorporating a damage clause.
Applicable Building Codes
Unlicensed contractors may be unfamiliar with building codes and inspection requirements. Poor workmanship may impair the building structure which may result in increased expenses and delays. The association may be liable for additional expenses to bring the work in compliance with the state and local building codes.
Issuance of Notice to Cease and Desist
Where the Association has contracted with an unlicensed contractor, the Department of Business and Professional Regulation or the Building Department may issue a cease and desist order to stop the work. The department does not have statutory authority to order an unlicensed person to refund the money.