May 16, 2023
By Shelby J. Bensinger
When it comes to construction, overlooking seemingly minor details can lead to big problems in the long run. Performing work without a license can result in major issues for contractors seeking, or defending, damages for breach of contract. Both contractors and homeowners should be aware of contractor licensing laws should they find themselves in litigation over a construction project gone wrong.
The Georgia code expressly provides that it is the State’s intent, “in the interest of public health, safety, and welfare, to safeguard homeowners, other property owners, tenants, and the general public against faulty, inadequate, inefficient, and unsafe residential and general contractors.” O.C.G.A. § 43-41-1. Unlicensed construction work can result in an outcome that is faulty, incomplete, and unsafe. Accordingly, Georgia has legislation in place to ensure property owners enjoy a level of protection simply by virtue of hiring a licensed contractor.
Unlicensed contractors, on the other hand, are afforded almost no protection in Georgia. The law provides that if a contractor does not have a residential or general contractor’s license but performs construction work that requires such a license, the underlying construction contract is unenforceable. O.C.G.A. § 43-41-17(b). Georgia courts have repeatedly held that the law clearly bars unlicensed contractors from enforcing their construction contracts.
Notably, there are certain exemptions under the law that apply to specialty contractors who are performing work within their area of specialty. However, this so-called specialty contractor statute does not create a blanket exception to the licensing requirements for specialty contractors. In Restor-It, Inc. v. Beck, 352 Ga. App. 613 (2019), the Georgia Court of Appeals clarified that the law authorizes those who hold valid specialty licenses to perform limited work on a project without having a general contractor’s license. The specialty contractor exceptions do not apply to an unlicensed contractor who contracts to perform a broad scope of work.
As a general rule, regardless of whether the contract involves a small or large-scale project, a contractor who performs work without a license has no recourse if things go sour. Contractors should make it a priority to ensure they have all necessary licenses and certificates in order to protect themselves and their rights. Likewise, property owners would be wise to verify that they are hiring contractors with proper qualifications.
Shelby J. Bensinger is an associate attorney with Flint, Connolly & Walker, LLP who represents clients in a variety of civil and business litigation matters, including construction disputes.