Facing Allegations of Unlicensed Contracting in Florida?
The Penalties May Be More Severe Than You Think
Definition of Unlicensed Contracting and Related Florida Statutes:As per Section 489.105, Florida Statutes, the term *Contracting* is defined as an individual engaged in the business of a *contractor,* or a qualified person who is responsible for a contracted construction project who, for compensation, undertakes to, submits a bid to, or does himself or herself or by others construct, repair, alter, remodel, add to, demolish, subtract from, or improve any building or structure, including related improvements to real estate, for others or for resale to others.
In accordance with Florida law, the offense of *Contracting Without a License* encompasses a wide range of home improvement and construction related conduct. Section 489.127, Florida Statutes, provides as follows:
(1) No person shall:
(a) Falsely hold himself or herself or a business organization out as a licensee, certificateholder, or registrant;
(b) Falsely impersonate a certificateholder or registrant;
(c) Present as his or her own the certificate or registration of another;
(d) Knowingly give false or forged evidence to the board or a member thereof;
(e) Use or attempt to use a certificate or registration that has been suspended or revoked;
(f) Engage in the business or act in the capacity of a contractor or advertise himself or herself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified;
(g) Operate a business organization engaged in contracting after 60 days following the termination of its only qualifying agent without designating another primary qualifying agent, except as provided in ss. 489.119 and 489.1195;
(h) Commence or perform work for which a building permit is required pursuant to part IV of chapter 553 without such building permit being in effect; or
(i) Willfully or deliberately disregard or violate any municipal or county ordinance relating to uncertified or unregistered contractors.
There are at least nine different ways to commit the offense of unlicensed contracting in Florida. Evidence of only one violation is sufficient to commence an investigation and potentially sustain a conviction against you or your business.
Potential Penalties for Unlicensed Contracting in Florida:According to the department*s jurisdiction outlined in Florida law, the following actions may be taken against an individual or business engaging in unlicensed contracting:
(1) Notice to Cease and Desist: A notice to cease and desist is issued to an individual stating the alleged unlicensed activity, giving the individual information about the applicable laws, directing them to cease doing the alleged work without a license, and requesting a discretionary response to the Complaint within 20 days of receipt of the notice and complaint;
(2) Citation: A citation can be issued for engaging in, offering to, or advertising unlicensed activity, imposing a fine up to $2,500.
If found liable for unlicensed contracting, local enforcement may conduct disciplinary proceedings against you and may require restitution, impose a suspension or revocation of your local license, or a fine not to exceed $5,000, or a combination thereof. The local jurisdiction may also assess reasonable investigative and legal costs for the prosecution of the violation against the violator;
(3) Administrative Complaint: A charging document alleging a violation of law and seeking to exercise the department*s enforcement authority or to take disciplinary action against your or your business. An administrative complaint and related proceedings are generally reserved for those who elect to appeal or contest their citation;
(4) Injunction: A circuit court order forbidding you or your business from engaging in unlicensed activity;
(5) Criminal Prosecution: In cases of unlicensed contracting, the department may administer fines on the unlicensed individual and/or help facilitate criminal prosecution through the local State Attorney*s Office. The crime of unlicensed contracting is generally charged as a first-degree misdemeanor, with penalties ranging from up to one year in jail to a $1000.00 fine.
If the accused has been previously convicted of contracting without a license, the offense may be charged as third degree felony, with penalties of up to 5 years in prison or 5 years of probation, and a $5,000 fine; and
(6) Civil Litigation/Restitution: The person who submitted the complaint to the DBPR may also request restitution from the courts independently of the DBPR investigation. That said, the DBPR does not have the authority to obtain restitution for the complainant if they are the victim of unlicensed activity. They must bring their causes of action to a proper local court based on the location of the parties and alleged damages.
Other Penalties and Consequences of Unlicensed Contracting:In addition to the above penalties, a person or business found liable for engaging in unlicensed contracting may face additional consequences that may lead to increased liability and headaches for the accused. Such consequences include, but are not limited to:
Unlicensed Contractors Have No Lien Rights: As per section 713.02(7), Fla. Stat., *notwithstanding any other provision of this part, no lien shall exist in favor of any contractor, subcontractor, or sub-subcontractor who is unlicensed.* Similarly, an unlicensed contractor can also lose their bond claim.
Unlicensed Contractors* Contracts are Unenforceable: Pursuant to Section 489.128, Fla. Stat., contracts entered into by unlicensed contractors are unenforceable in law or equity by the unlicensed contractor. As a result, a finding of unlicensed contracting can lead to serious liability concerns should the complainant decide to file a civil lawsuit.
Unlicensed Contractors May be Subject to Treble Damages: Section 768.0425, Fla. Stat., provides that a consumer harmed by an unlicensed contractor*s negligence, malfeasance, or misfeasance, shall be entitled to three times the actual compensatory damages sustained in addition to costs and attorney*s fees.
Unlicensed Contractors are Subject to the FDUTPA: Designed to protect consumers from businesses who commit deceptive or unfair trade practices, the Florida Deceptive and Unfair Trade Practices Act (*FDUTPA*) prohibits unfair methods of competition and unfair or deceptive acts or practices in conduct of any trade or commerce. Accordingly, unlicensed contractors can face various penalties for violating the FDUTPA, including potential personal liability and providing for prevailing party attorney* fees.
Potential Defenses:If you or your business is facing a charge of unlicensed contracting, you should know that there are various defenses available to you to combat any such allegations. These include, but are not limited to:
(1) Evidentiary and Factual Defenses
In order to prove the allegations against you, the prosecution must first address the evidentiary or factual defenses of the accused. Such defenses include whether the contractor ever held himself out to be a licensed or certified contractor; whether the contractor made any false representations about his credentials or qualifications; whether the accused acted in the capacity of a contractor; or whether the accused was working under the direct supervision of a licensed or certified contractor.
If it can be shown that the accused did not engage in the activities or conduct described in the consumer complaint and related DBPR investigation, they may have a complete defense to rebut the charge.
(2) Technical Defenses
Similarly, before the aforementioned penalties can be accessed against you or your business, the prosecution must prove that an accused was in fact *unlicensed* or *unregistered.* This can be problematic if the accused has hired an experienced attorney prepared to make applicable evidentiary objections in order to prevent the State from meeting the requisite burden of proof.
(3) Defense of *No License Required*
Of course, just because you are performing contracting or construction work, does not necessarily mean that you are required to be certified or have a license to perform said work. If the complaint against you accuses you of conduct that does not fall within the purview of a licensing statute or regulation, you may have a complete defense to rebut the charge.
What to Look Out For When Responding to a DBPR Complaint:As noted above, an accused generally has 20 days to respond to the DBPR*s complaint and notice to cease and desist. That said, a response is not required and, because of the nature of the DBPR*s investigation, may have unforeseen legal consequences. Because of this, it is best to have an attorney review the complaint and perform a comprehensive review of your matter so that you do not include anything in the response that could result in heightened criminal and civil liability.
Feeling Overwhelmed? We Can HelpOur law firm has experience handling these types of matters and corresponding with the DBPR in an effort to resolve its claims.
If you, your business, or a business you know is facing allegations of unlicensed contracting, it*s important to know your rights and how to protect yourself. As noted above, time is of the essence when it comes to responding to a DBPR Complaint, as you are generally provided with 20 days to response to the complaint once notice of same is received.
The law firm of Cynthia Conlin & Associates has experienced construction law attorneys who may be able to help you with your questions.