“License and Registration, Please.” The Big Risk of Getting Busted for Working without a Proper Contractor’s License

Architect carrying plans through corridor

An unlicensed contractor may be barred from asserting claims or collecting payments for work already performed.

July 25, 2021
Christopher A. Henry & Mia Hughes - ConsensusDocs

The need for contractors to maintain the proper contracting license may seem like a mundane, clerical detail, and generally is just that. If, however, the contractor ignores or mishandles paperwork and the proper license is not in hand, licensing may go from a mundane, clerical detail to a financial catastrophe. An unlicensed contractor may be barred from asserting claims or collecting payments for work already performed; the contractor may even be required to return payments for unlicensed work performed.

A recent case in Georgia, a state that had no state-wide general contractor’s license requirement in effect until 2008 illustrates the risk of unlicensed work.[1] In Saks Management and Associates, LLC v. Sung General Contracting, Inc.,[2] the court ruled that without a license the general contractor did not have the right to enforce a contract. The contractor’s claims for payment failed, and the mundane, clerical error led a major financial loss. This disastrous result for the Georgia contractor is far from an outlier, and is a real risk in many states.

Reprinted courtesy of Christopher A. Henry, Jones Walker LLP and Mia Hughes, Jones Walker LLP
Mr. Henry may be contacted at chenry@joneswalker.com



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