Property owners frequently have questions about the license requirements on their homes. Some are aware of the $30,000.00 requirement with regard to contractors; that is, that general contractors cannot contract to have substantial control over construction work on a property that is not for their own residence that exceeds $30,000.00. But what is the impact of this license requirement and are unlicensed general contractors a reliable choice for homeowners?
Licenses granted by the North Carolina Licensing Board for General Contractors usually come with limitations by the type of work (all types of building construction, residential only, highways, public utilities, or other particular specialties) as well as limitations based on the amount of money in a particular contract that a contractor can take on. A person can serve as the qualifier for their own individual license and the license of one additional corporation. They must be actively engaged in the work of the licensee for the majority of the hours for which they work.
The unauthorized practice of general contracting is a Class 2 misdemeanor in this state. This commonly takes place when a contractor works a job that exceeds $30,000.00 in contract value that is not their own residential property. A contractor’s continued failure to abide by the licensing requirements can lead to a hearing before the Licensing Board where job-related sanctions can be issued.
Perhaps most importantly for property owners, a person’s failure to maintain strict compliance with the licensing requirements will prevent him from enforcing the provisions of his contract for anything other than an offset against damages, recovering under a theory of quantum meruit and/or unjust enrichment, or filing a counterclaim against a breach of contract suit. This is true even if the property owner knew about the lack of a license. The contract can be used against the contractor by the property owner. Additionally, subcontractors may enforce a lien in spite of the fact that the general contractor cannot enforce it.
If you are a property owner who has entered into a contract, knowingly or unknowingly, with an unlicensed contractor and want to better understand your rights, contact us to speak with a construction litigation lawyer. Maginnis Howard is a Raleigh civil litigation firm handling matters across the state of North Carolina. Contact the firm at 919.526.0450 to speak with a construction attorney, send an email to firstname.lastname@example.org, or submit a request through our contact page.