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March 19

2009 legislative session Proposed HB579-NOT Passed

HB579 which was introduced in the 2009 legislative session was not passed. The original bill was very broad and was opposed by the HBAG. It was then revised to limit its applicaiton to a "very limited and tragic situation" where an application for examination exemption was timely submitted but the applicant died prior to the approval of the license. The bill as it had been revised to amend Section 43-41-8 would have added if it had been approved a new subsection to read as follows:

(c) Any business entity application that was submitted and approved pursuant to this Code section, but not issued because of the death of the approved qualifying agent prior to the issuance of the license, shall remain eligible for consideration under this Code section with the submission of a new qualifying agent candidate for such business entity.

It originally proposed to amend the act as follows:

(5) Any person who, for at least ten consecutive years prior to submitting an application, is affiliated, by employment or ownership, with a business organization having been incorporated in Georgia continuously for at least 20 years.

8:27 AM GMT | Read comments(0)

March 09

Proposed HB595 - Amending contractor warranty requirements

HB595 proposes to amend contractor warranty requirements:

(b)(1) For the purposes of this subsection, the term 'buyer' means the purchaser of a custom residential construction of which certain specifications have been negotiated with a licensed residential contractor as part of a purchase of a purchase offer.

(2) Upon the discovery of a defect relating to the construction of which the residential contractor has contracted with a buyer to complete or of the completion of any fill relating to such construction, a licensed residential contractor or any affiliated entities or successors shall provide to a buyer, by statutory overnight delivery, a report describing such defect or any engineering report describing the detail of any fill relating to such construction. Any report provided pursuant to this paragraph shall be provided to the buyer within five days of the completion of such report. In the case of a defect, the residential contractor shall as part of his or her report include any steps taken to correct the defect that is the subject of the report.

(3) Upon the request of a buyer, the board shall provide such buyer with a report disclosing all disciplinary actions taken against a licensed residential contractor including, but not limited to, all actions taken by the board pursuant to Code Section 43-41-16, any penalties such residential contractor may have received pursuant to Code Section 43-41-16, or all other information relating to any professional misconduct conducted by such residential contractor. Nothing in this subsection shall require the board to provide a buyer with any information that is deemed confidential or not for public consumption by any other provision of law."

5:28 PM GMT | Read comments(0)

Proposed HB253 - 2009 legislative session

HB253 proposes to amend the contractor licensing act as follows:

43-41-18

(a) All contractors shall, upon the receipt of payment for work in excess of $5,000.00 on any real estate, provide the person paying for such work a signed sworn affidavit stating that all subcontractors, all materialmen furnishing material to subcontractors, and all laborers furnishing labor to subcontractors, materialmen, and persons furnishing material for the work done on the real estate have been paid for their services or have agreed to waive such payment.

(b) A sworn affidavit pursuant to subsection (a) of this Code section, shall serve as an absolute defense to any lien filed pursuant to Code Section 44-14-361 and shall as a result dissolve any such lien as a matter of law.

(c) Upon a contractor's first violation of subsection (a) of this Code section, he or she shall be subject to a civil penalty not less than $10,000.00 to be paid to the board for transmission to the Department of Revenue for deposit into the general fund. A contractor's second violation of subsection (a) of this Code section shall result in an immediate suspension of his or her contractor's license for a period not less than six months. A contractor's third violation of subsection (a) of this Code section shall result in the revocation of his or her contractor's license

5:15 PM GMT | Read comments(0)

February 17

My company hires licensed contractors to perform construction services, do I need a contractor's license?

If you are in direct contract with the property owner to provide the services of a general or residential contractor, unless your work falls within one of the statutory exceptions (such as a specialty contractor, handyman, property owner, architect, engineer or contractor licensed under chapter 14). Even if all of the work under the contract is performed by licensed contractors (when required) as your subcontractors, you are likely performing construction management, which requires a state contractor's license.

For example, you enter into a construction contract with a property owner to build a new building or home, to remodel and restore a commercial building, or to extensively remodel an existing home. After entering into the contract, you hire a subcontractor who is a state licensed general or residential contractor (which contractor if directly in contract with the property owner would be fully qualified and licensed to perform the work). YOU are considered to be the contractor and would be required to hold a state contractor's license.

This of course is a very oversimplified example. To truly assess whether you are required to hold a state contractor's license or whether your business operations may be structured in a manner to lawfully perform construction work under a statutory exception, you should seek legal counsel to discuss your specific situation. Your contract forms will also likely need to be reviewed whether you are state licensed or falling under a statutory exception.

4:35 PM GMT | Read comments(0)

February 10

Does a county pool permit mean my pool complies with federal law?

A property owner contacted me recently. They were on the Board of Directors for their association. Their pool had been issued a local county permit which would enable them to open. Their pool maintenance professional had told them that their pool did not comply with the Virginia Graeme Baker Act. "Doesn't the county permit mean they are in compliance with all laws and legal to open the pool." ABSOLUTELY NOT!

Some local officials have noted that they may not have legal authority or the funds at their level to enforce the Act. The issuance of a county permit does not mean that the pool is in compliance with all federal and state laws or that the pool owner need not do anything. Public pool owners should check with their qualified pool professional and specially ask if their public pool is in compliance with the VGB ACT. Public pool owners and operators who are NOT in compliance are risking serious liability and, as in some cases, may not have insurance coverage. Failure to comply with the VGB Act could result in the death of a child....a situation no one wants to have to explain to a parent.

9:42 AM GMT | Read comments(0)

February 07

What does a qualifying agent do to remain licensed if they are leaving the company

The Board policy as decided in November, 2008: If you are a qualifying agent who is leaving the business organization for which you are a qualified agent (for whatever reason, including termination), to keep your license, you have 120 days to submit a prior approval application as a qualifying agent for another business organization or as an individual. This will run concurrent to the 45 days given to the business organization and the qualifying agent notifying the board that the qualifying agent has left the business organization.

An individual may hold a license in the name of the individual and also as a qualified agent for one or more companies provided that all of the qualification requirements (including general liability insurance and workers comp) must be met for each license.

Both you and the business organization you are leaving may have other reporting obligations to the Board, whether you port your license or not. For example, a bankruptcy filing for the business organization will need to be reported. The business organization you are leaving will also need to appoint another qualified agent within the time periods set by the licensing act. The death of the qualified agent also triggers reporting and similar obligations.

3:37 PM GMT | Read comments(0)

February 06

Building Permits - Are they checking for a Contractors License?

At least one building official (for a major metro-Atlanta county), I have talked to has noted that given the current budgeting constraints, they are not actively searching the Georgia Secretary of State's website for confirmation that a contractor has the appropriate license to obtain the permit sought. Under the licensing act, OCGA 43-41-14(a), a contractor seeking a building permit to perform work for which a license is required, before being entitled to the issuance of the permit, should furnish to the inspector or authoirty, a sworn written document showing the applicable license number and the identity of the business organization. There is no stated requirement in the act that the building official must verify the status of the license number provided. This particular official is basing issuance of the permit on a sworn certification of the contractor applicant.

While reliance on the sworn certification may comply with the letter of the law, the problem with this approach is that one of the safety checks in the law is effectively emasculated. The public is at risk that an unlicensed unscrupulous contractor may obtain a permit and proceed to construct instead of being stopped at the building permit office. While clearly the unlicensed contractor faces the risk that a consumer may assert the unenforceability of the contract and may further be subject to criminal and civil action for the false swearing, the Act does expressly provide that the owner is entitled to recover monies already paid (hopefully this will be part of any judicial interpretation). There is no victims compensation fund. The unscrupulous unlicensed contractor is likely to leave the job site with a partially completed project which puts the consumer at risk. This is a serious issue for consumers. Consumers should ACTIVELY verify the license with the professional licensing board. This may be done online.

The failure to verify by building officials also fails to protect those in the construction industry who abide by the rules and who obtain and qualify for their license. Building permits issued without verification of proper licensing undercut the importance of permits. The issuance of a building permit for work requiring a license which is based on a sworn, but unverified, statement which later proves to be false, endangers the public. Real estate professionals, consumers and other contractors deserve better under our laws.

In the meantime, do not assume that because a permit has been issued that the contractor is properly licensed. Check the Secretary of State's website yourself!

9:05 AM GMT | Read comments(0)

February 05

Is Your Construction Company REALLY Licensed?

I received a call a few days ago from a contractor who had been denied a building permit. The contract was in the name of his incorporated business, his business license was in the name of the Inc., the permit sought was for work within the category of his license category. Problem was he held the license in his individual name and NOT as a qualified agent for the Inc.

Contractors who have business entities, that is your company is an Inc., a Corp., Co., LLC or similar entity created and registered with Georgia Secretary of State's office or you are a partnership (LLP, LP, etc.), the entity must have a qualified agent. Holding the license as an "individual" does NOT satisfy the requirement of the licensing law even if you, the licensed individual, are the 100% owner of the company. Technically a company without a licensed qualified agent is a UNLICENSED contractor, which means your contracts are UNENFORCEABLE.

There is a generally an easy fix to this situation if your license is in good standing. That is to port your license to the company so that the company has a qualified agent. The application forms for this may be found on the General and Residential Contractors Board website. See Prior Approval Status forms.

7:10 AM GMT | Read comments(0)

February 06

Continuing Education for Contractors

The Board is currently working on a new rule to address the requirements for continuing education for licensed residential and general contractors. This will likely be a very important rule to watch as it is developed. The rule should hopefully address issues such as certification classes offered by a number of construction associations. Stay tuned for more information.

8:09 AM GMT | Read comments(1)

February 05

Bankruptcy and Contractor License Issues

Yesterday at the State Residential and General Contractors Board meeting, a Board member confirmed that if you are a licensed contractor (whether individually or as a QA) and your company is filing for bankruptcy protection, you will need to inform the Board. Given the current financial environment, the Board acknowledges that if there are no "bad" acts, the Board is not likely to terminate or take serious adverse action with regard to your license. It may determine to put the license in probationary status. If there are "bad" acts, which may include fraud, theft, misuse of funds (such as taking monies entrusted to the contractor), the Board may determine to take further action against the contractor.

Each circumstance is different and the Board has not made any public rulings on specific matters. As a practical matter, a contractor who is faced with a potential bankruptcy counsel should discuss with legal counsel (both bankruptcy and an attorney who understands licensing) there particular situation. Some simple preliminary steps in dealing with your customers and in your communications to the Board may save you a great deal of problems later.

6:35 AM GMT | Read comments(0)

January 25

Have you updated your contract since contractor licensing went into effect?

Whether you are a licensed contractor or a specialty contractor exempt from licensing, there are a few provisions you may want to consider adding to your contract forms now that contractor licensing has gone into effect. Contractors who are exempt, whether a specialty contractor or otherwise, should consider specific language acknowledging your exemption among other provisions. Contractors who are licensed should be sure they have required matters covered in their contract and should include provisions to address changes in your license status, qualified agent changes or other matters.

7:46 PM GMT | Read comments(0)

Virginia Graeme Baker Pool & Safety Act

This safety act went into effect as of December 19, 2008. Legal information regarding this Act is posted on this site.

7:30 PM GMT | Read comments(0)

August 07

Complaints to the Board

Generally the Board will not be handling complaints that pertain to many construction practices that arose prior to July 1, 2008. The Board however may consider complaints involving criminal matters, fraud or similar issues that arise prior to July 1, 2008. As for complaints pertaining to matters that arise AFTER July 1, 2008, these complaints will be considered by the Board.

3:44 PM GMT | Read comments(0)

Owners being asked to pull permits

Owners are being asked by unlicensed contractors to pull permits. This circumvents the contractor licensing laws. Owners should NOT pull permits for a contractor. A contractor is generally responsible for pulling their own permits for a project and the pulling of the permit is an important legal step. The contractor generally certifies to the jurisdiction that they will abide by the local construction code and will be responsible to the jurisdiction for failures. In some jurisdictions, when there is a contractor's bond requirement, the pulling of the permit is one of the events that may be required for a homeowner to be able to seek redress against the bond in the event the contractor does not complete the work or violates code requirements.

A General or Residential Contractors license is NOT required to pull all permits. Specialty contractors may pull permits in a number of circumstances. Handymen/Repair persons may also pull permits if acting within the scope of their exemption.

The contractor licensing board will consider complaints against contractors who are having owners pull permits. Local jurisdictions may also be taking action against contractors, owners or others who falsify permit applications.

If a contractor asks you to pull a building permit, it could be an indication that the contractor does not have the required license.

3:18 PM GMT | Read comments(1)

Georgia Construction and Licensing Law for Residential Contractors, Specialty Contractors and Home Owners

Sponsored by the Law Office of Kevin M. Veler -- Georgia's Construction Legal Advisor.