January 7, 2020
Construction Law

Georgia Contractors at Risk of Nonpayment by Performing Work Outside of Their License

The Georgia Court of Appeals recently considered the issue of whether an unlicensed “specialty contractor” was able to enforce its contract with an owner when it performed plumbing work itself, rather than hiring a licensed plumbing subcontractor.

The Georgia contractor licensing requirements do not allow unlicensed contractors to enforce contracts if they are not paid. However, there is an exception for specialty contractors who do not need a license to perform work within their specific trades. For example, masonry or insulation contractors do not need a license to perform masonry or insulation work. However, this is a limited exception, and if the specialty contractor is involved with work that does require a license, such as plumbing or electrical work, the exception does not apply and the entire contract is unenforceable by the contractor.

In Restor-It, Inc. v. Beck, a kitchen and bath specialty contractor performed an extensive remodel, which included some electrical and plumbing work (less than 20% of the total work). The court held that it was irrelevant whether Restor-It was a general contractor or specialty contractor, because by performing any amount of electrical and plumbing work, it was contracting without a license and the entire contract could not be enforced.

This case is a warning to all contractors from performing even a small amount of electrical or plumbing work without a specific license. If you have questions about whether you need a license to meet your clients’ needs call HPW for advice specific to your situation.

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