Licensing issues can be the death sentence for lien and contract claims. (Credit Column).

The legal profession has a view of the construction industry that tends to identify trends in the types of problems encountered on jobs, in contract construction and the enforcement of mechanic's liens. When those trends present themselves, invariably the class of persons who can best take advantage of the trend will do so until such time as the legislatures step in to correct the trend or enough contractors and owners are educated to the problem that it no longer serves as an ambush tactic usable against an otherwise valid claim. Such a trend has erupted in Florida and is making its way throughout other construction venues,

Fundamental to the construction of a project is the obtaining, and maintaining of appropriate licenses by those performing the work who are required to be licensed. It is easy to see how unlicensed contractors can wreck havoc on the unsuspecting homeowner in need of a roof repair or other small home improvement. Without proper licensing, the state agencies cannot police the improper practices of these unlicensed "contractors" who either perform sloppy work, fail to complete, or just steal from their owners. In part for this reason, the Florida legislature enacted section 489.128, Florida Statutes which states: "As a matter of public policy, contracts entered into, on, or after October 1, 1990, and performed in full or in part by any contractor who fails to obtain or maintain a license in accordance with this part shall be "unenforceable in law or in equity."

Facially, the statute makes sense. Those who should be carrying a license but do not should not profit at the expense of not only the owner, who may have to raze and rebuild portions of the project which are not code compliant, but also for others in the trade who do carry licenses, keep up with the continuing education requirements and pay the fees required for licensure. The problem is created when someone is unlicensed which may have the effect of negating others' contracts and lien rights, even when those others have their own licenses intact.

As an example, consider the following scenario. A contractor engages several subcontractors to perform the work on a project. The subcontracts require the subcontractors to maintain the appropriate licenses during the job, so if they do not, it is a breach of the subcontract. One of the subcontractors is not licensed. What is the result?

One easy answer is the unlicensed subcontractor has no valid contract, and therefore no lien rights. All of the work he performs will be free and he is faced with back charges for any damages this may cause his contractor or the owner. What of the general contractor? If "any part" of the general contract is performed by an unlicensed contractor, then arguably his contract is void and invalid too. And so are his lien rights. If the general contract is invalid and unenforceable, there ...