Home construction and improvement projects in the U.S. are governed state and local laws that require contractors to be properly licensed and registered. These laws are designed to protect homeowners and maintain industry standards. Whether building a new home or renovating an existing one, contractors are typically required to hold valid licenses, register their businesses, and comply with the laws and standards that govern the industry. If a contractor fails to meet these requirements, they may lose the ability to enforce their contracts, recover payment, or defend themselves in court, even if the work is completed.
A recent case from Florida illustrates the risks of noncompliance with contractor licensing statues. In CAM Bradford Homes, LLC v. Arrants, the Florida First District Court of Appeal upheld a trial court's ruling that CAM Bradford Homes could not enforce its contract with homeowners because it was an unlicensed contractor. The homeowners had hired the company to build a single-family home in Fernandina Beach. Although the company owner, a certified general contractor, personally oversaw the project, he failed to register the business with the Department of Business and Professional Regulation as required by Florida law. As a result of this omission, the company could not pursue its claims in court.
Before the project was completed, the homeowners terminated the contract. CAM filed suit alleging breach of contract and other related claims, including lien foreclosure and unjust enrichment. The homeowners responded with counterclaims and moved for summary judgment, arguing that the contract was unenforceable because the company was unlicensed. The trial court agreed, finding that CAM's failure to apply as a qualifying agent meant the company was unlicensed, and granted summary judgment in favor of the homeowners. On appeal, the CAM contended that CAM's owner's active role in the project should suffice to establish him as a de facto qualifying agent. However, the appellate court rejected this argument, emphasizing that statutory language requires formal registration and certification for a business to be considered licensed.
The court's analysis leaned heavily on principles of statutory interpretation, particularly the surplusage canon, which holds that every word in a statute should be given meaning, and none should be interpreted as redundant or meaningless if it can be reasonably avoided. Accepting CAM's argument would undermine the statute's requirement of registration for business engaged in contracting. The court noted that only sole proprietorships may rely on an individual's license without further application, and that CAM's failure to apply meant the business never received the necessary certificate or registration. As such, the contract was unenforceable under, and the company was barred from asserting any lien or bond claims.
This decision stands in sharp contrast to Schott v. Lucatelli, a case recently reviewed in this blog, where the New York State Supreme Court, Appellate Division, Third Department took a more flexible approach to a construction dispute. In Schott, the court addressed a disagreement over the construction of a single family residence without a written contract. Despite the absence of a formal agreement, the court allowed recovery under the equitable doctrine of quantum meruit, awarding the contractor compensation for services rendered. The court found that the contractor had performed work in good faith, that the homeowner accepted the services, and that the work had reasonable value. Even after accounting for defective work, the court awarded the contractor a monetary judgment that included prejudgment interest.
While both cases involved building single-family homes and disputes over licensing, the courts reached different outcomes based on how they interpreted the law. Florida's approach in CAM Bradford Homes emphasized strict compliance with licensing requirements. New York's approach in Schott was more flexible, allowing recovery based on fairness and the realities of informal arrangements.
Jose A. Aquino (@JoseAquinoEsq on X) is a special counsel at Duane Morris LLP's New York office, where he is a member of Construction Group, specializing in construction law, lien law, and government procurement law. He is also a member of the Cuba Business Group.
This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed herein are those of the author and do not necessarily reflect the views of Duane Morris LLP or its individual attorneys.
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