Unlicensed Contracting Can Prove Costly

UNLICENSED CONTRACTOR AQUITTED OF GRAND THEFT

By: Robert S. Tanner, Esq.

Undoubtedly, contractors who have invested the time, energy, and money to obtain and maintain their licenses may not have high regard for unlicensed contractors. Homeowners who have spent money on unlicensed contractors just to spend the money again to have the work redone properly would justifiably have a very low regard for unlicensed contractors. The courts on the other hand should not hold any particular regard for unlicensed contractors. Their role is to apply the law to a given set of facts.

In Huggins v. State, 2012 WL 4465235 (Fla. 1st DCA Sept. 28, 2012), a couple over 65 years old were homeowners ("Owners") who had a handyman ("Handyman") who would perform various jobs around their home. When Owners determined they needed a new roof, they discussed it with Handyman who said he could not do the job. However, Handyman put Owners in touch with Scott Huggins who agreed to do the roof work. Huggins was not licensed.

Owners initially gave Huggins a check for $6,500. Because that check would not clear for a few days, Huggins borrowed $1,200 from Handyman to purchase materials for the job. That loan was repaid after Owners' check cleared. Huggins purchased materials for the job and began work. Huggins found that the decking needed to be placed, so Owners gave him another $3,700 to cover the necessary materials and labor.

An investigator from the county's department of building inspections observed the roofing materials on the property and determined that a permit had not been pulled for the job. A cease and desist order was issued. Huggins never returned.

Owners hired a licensed contractor to complete the project. That contractor stated that Huggins had not used the correct materials and all of the work had to be redone.

The State obtained a conviction against Huggins for grand theft of property from a person 65 years old or older and valued at $300 or more but less than $10,000. Huggins appealed solely on the grounds that the State had failed to prove that he had intent to commit grand theft. To prove the intent element, the law required the State to show that Huggins intended to commit grand theft when he accepted the two checks from Owners.

The trial record clearly showed that Huggins had, in fact, purchased materials for the job and had begun work on the job. Although there might have been a serious question about whether Huggins' performance was adequate, appellate court found the evidence to establish intent to commit grand theft was inadequate.

Chapter 489 provides for criminal sanctions for unlicensed activities. So do ordinances enacted by many county and local governments. Although the appellate opinion did not state that Huggins was charged with any such violation, the court noted that there was no evidence that Huggins had represented to Owners that he was licensed or that he would obtain permits for the job. Rather, if Owners had a conversation with anyone about licensing and permits, it was with Handyman. Of course, under Chapter 489, it is the very act of contracting (e.g., performing work, advertising to perform work, etc., for compensation) without a license that is criminal. Thus, whether Huggins had made any misrepresentations about his licensing to Owners should not have been determinative. Having performed the work, or even just offering or advertising to perform the work, without being licensed would be enough.

Without evidence of intent to commit theft, the court reversed Huggins' conviction. The reversal would have caused the Owners to lose the right to obtain restitution through the state-run Homeowners Construction Recovery Fund, although they probably would not have had the ability to recover from the Fund because it has been not been sufficiently funded in recent years. Owners would have been wise to look to their local government for a similar program. For example, in Broward County, 70% of the administrative penalties assessed against unlicensed contractors are deposited into the County's fund and are available, with limitations, for restitution of homeowner's claims.

Persons such as Huggins who do not have a license to engage in construction contracting should think hard before offering construction services. Criminal penalties, civil suits, personal liability, and the inability to enforce their contracts are all potential downsides - major downsides - to engaging in contracting without a license.

For more information regarding licensing, unlicensed activity, or recovery of damages against an unlicensed contractor, call any of the Board Certified Construction Lawyers at Malka & Kravitz, P.A.