The law now requires that Home Inspectors be licensed by the Department of Business and Professional Regulation (“DBPR”). Inspection services through a corporation or partnership is allowed provided that all personnel of the corporation or partnership who act on its behalf as Home Inspectors are licensed by the DBPR. Licensed home inspectors are treated by the DBPR similar to licensed contractors. Home Inspectors are now subject to disciplinary actions and must maintain a commercial general liability insurance policy in an amount of not less than $300,000.00. 

Of note is the fact that the Home Inspectors law requires that after completion of a home inspection for compensation, the Home Inspector must provide a written report to the client. The report must indicate (1) the systems and components inspected that in his professional opinion are significantly deficient or are near the end of their useful life; (2) if not self-evident, the reason why the system or component reported is deficient or near the end of its useful life and (3) any systems and components that were present at the time of the inspection but were not inspected and the reason for the lack of inspection. Failure to provide the report as set forth above is a violation of law.

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     All construction contracts entered into with contractors lacking state licenses are unenforceable. The contractor also loses lien rights and the ability to claim under a bond. However, the consequence of unlicensed subcontracting is less clear and made more so by a recent court case. 

     A subcontractor’s failure to maintain the required license may not deprive it of payment from the general contractor for whom they worked. Poole & Kent Co. v. Gusi Erickson Const. Co., 759 So.2d 2, 6 (Fla. 2d DCA 1999), held the unlicensed subcontractor was entitled to payment because it was the general contractor’s responsibility to ensure its subcontractors are licensed and, if the contractor could avoid paying unlicensed subcontractors, then contractors would be encouraged to hire unlicensed subs. However, there is at least one case holding to the contrary. Deep South Systems, Inc. v. Heath, 843 So. 2d 378, 381 (Fla. 2d DCA 2003).

     The new case of MGM Const. Services Corp. v. Travelers Casualty & Surety Co. of America, 2011 WL 710191 (Fla. 3d DCA 2011), is a landmark case in which the court reversed a trial court’s finding that a subcontract with an unlicensed drywall subcontractor was unenforceable. The appellate court correctly determined that section 489.128 of the Florida Statutes, rendering contracts with unlicensed contractors unenforceable, only applied to state licenses and had no bearing on local licenses like drywall. However, the court went on to hold that, where the Legislature has not added the penalty of non-enforceability to a licensing provision, the courts may nevertheless still do so after weighing the relative strength of the policies behind the local licensure requirement and any competing policies of injustice. Therefore, in summary, although local ordinances requiring local licenses like drywall may not expressly make a contract with an unlicensed subcontractor unenforceable, the courts may nevertheless do so with their own powers after weighing various policy considerations on a case by case basis.

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I’m sure by now all of you are aware of the new licensing codes governing home inspections and mold assessors and remediators. They became effective July 1, 2010. Section 468.83, Florida Statutes, governs licensing of home inspectors and section 468.84 governs mold-related services.

Contractors licensed under Chapter 489 of the Florida Statutes are not qualified to provide home inspection, mold assessment or mold remediation services unless they hold those respective licenses. The same is true for building inspectors, architects and engineers.

Sections 468.83 and 468.84 and the statutes that are part of those codes, impose certain requirements. For instance, home inspectors must provide the consumer a written disclosure of the scope and exclusions of the inspection pursuant to §468.8321 and must maintain a CGL policy of at least $300,000 pursuant to §468.8322. Mold assessors must maintain general liability and errors and omissions coverage in an amount at least $1,000,000. Mold remediators must maintain CCL coverage in at least that same amount and must specifically include coverage for mold related claims. §468.8421, Florida Statutes. Mold assessors are not permitted to perform remediation on a structure on which his or her company provided an assessment within the last year and the reciprocal is true for mold remediators participating in assessments. §468.8419.

Many contractors, building inspectors, architects and engineers have been providing home inspection services and mold assessment and remediation services for years. But now that these new licensing requirements have kicked in, continue performing those services without a license at your own risk!

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Downsizing of personnel is an unfortunate reality in the current economy. Most companies have already downsized and consolidated less important positions, but I’m starting to see more companies having to go to the next step and release some of their construction qualifiers. If you find yourself doing so as well, pay close attention to the requirements and ramifications under the Licensing Code.

First, make sure you are retaining at least one licensed contractor who can qualify your company. Second, both you and the released qualifier must notify the Construction Industry Licensing Board of the loss of the qualifier. Pursuant to §489.119(3)(a) of the Florida Statutes, you will have 60 days in which to replace the qualifier, which requires filing the appropriate licensure applications with the CILB. This 60 day period can usually be extended an additional month upon a showing of good cause. Until you are newly qualified, you can complete work in progress or proceed with contracts for bids you have already submitted, but you can’t bid for new work.

You should also notify in writing all building departments from which open permits have been issued under the qualifier’s license.

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