O.C.G.A. § 43-41-17 (2019)
Effective date of licensing and sanctioning provisions; unenforceable contracts; compliance with county or municipal requirements; exemption for DOT contractors; other exceptions
(a) The licensing requirements imposed by this chapter and the sanctions and consequences relating thereto shall not become effective
and enforceable until July 1, 2008. On and after such date, no person, whether an individual or a business organization, shall have the right to engage in the business of residential contracting or general contracting without a current, valid residential contractor license or general contractor license, respectively, issued by the division under this chapter or, in the case of a business organization, unless such business organization shall have a qualifying agent as provided in this chapter holding such a current, valid residential contractor or general contractor license on behalf of such organization issued to such qualifying agent as provided in this chapter. Notwithstanding the foregoing, persons seeking licensure under this chapter and exemption from examination under paragraphs (1) and (2) of subsection (a) of Code Section 43-41-8 shall submit their applications, including all necessary proof of the basis of exemption from examination for such license, starting January 1, 2006. The period for submission of such applications and requests for exemption from the examination requirements shall extend thereafter for a period of 18 months. Furthermore, notwithstanding the foregoing, any person seeking licensure under this chapter and exemption from examination under paragraph (3) of subsection (a) of Code Section 43-41-8 may submit his or her application, including all necessary proof of the basis of such exemption starting January 1, 2007, and continuing thereafter. (b) As a matter of public policy, any contract entered into on or after July 1, 2008, for the performance of work for which a residential contractor or general contractor license is required by this chapter and not otherwise exempted under this chapter and which is between an owner and a contractor who does not have a valid and current license required for such work in accordance with this chapter shall be unenforceable in law or in equity by the unlicensed contractor. For purposes of this subsection, a contractor shall be considered unlicensed only if the contractor was unlicensed on the effective date of the original contract for the work, if stated therein, or, if not stated, the date the last party to the contract executed such contract, if stated therein. If the contract does not establish such a date, the contractor shall be considered unlicensed only if the contractor was unlicensed on the first date upon which the contractor provided labor, services, or materials under the contract. Notwithstanding any other provision of law to the contrary, if a contract is rendered unenforceable under this subsection, no lien or bond claim shall exist in favor of the unlicensed contractor for any labor, services, or materials provided under the contract or any amendment thereto. This subsection shall not affect the rights of parties other than the unlicensed contractor to enforce contract, lien, or bond remedies. This subsection shall not affect the obligations of a surety that has provided a bond on behalf of an unlicensed contractor. It shall not be a defense to any claim on a bond or indemnity agreement
that the principal or indemnitor is unlicensed for purposes of this subsection. (c) Any person who holds a license issued under this chapter may engage in the business of residential or general contracting, but only as prescribed by the license, throughout the state and no municipality or county may require any such person licensed under this chapter to comply with any additional licensing requirements imposed by such municipality or county relative to the performance of construction work subject to the licensing requirements under this chapter. However, nothing in this chapter shall preclude the implementation and enforcement by any municipality or county of a local rule, regulation, ordinance, order, or other requirement in effect and operation as of July 1, 2004, that requires a person to obtain a locally issued license, registration, or certification in order to: (1) Engage in the construction of improvements to real property to the extent such activities are not encompassed by this chapter or by Chapter 14 of this title; or (2) Engage in residential or general contracting within such jurisdiction; provided, however, that: (A) The requirements and criteria for issuance of such local license, registration, or certification shall have been at least as strict and stringent, in the sole judgment of the board, as those for the issuance of a corresponding state-wide license issued under this chapter; (B) Such local license, registration, or certification shall only apply to activities performed within the geographical limits of such municipality or county; and (C) Such requirement shall not prevent or foreclose any contractor not holding such local license, registration, or certification but holding a valid and current state-wide license issued under this chapter or Chapter 14 of this title from the transaction of contracting business in such local jurisdiction within the scope of his or her state-wide license. (d) Any person qualified by the Department of Transportation to perform construction work on roads, streets, bridges, highways, sidewalks, or other grading, paving, or repaving projects; airport runways or taxiways; or railroads, and services incidental thereto, for the department shall not be required to be licensed under this chapter in order to perform any such work for the department or for any other owner requiring similar work to be performed. The general contractor division of the board, in agreement with the Department of Transportation, shall, by rule, define ‘‘services incidental thereto’’ for the
purposes of this subsection only and shall likewise define any other necessary terms as to the scope of the exemption provided by this subsection. (e) Nothing in this chapter shall prevent any person holding a valid license issued by the State Construction Industry Licensing Board, or any division thereof, pursuant to Chapter 14 of this title from performing any work defined in the Code sections under which the license held by said person was issued. Furthermore, nothing in this chapter shall preclude a person licensed under Chapter 14 of this title to perform plumbing, conditioned air contracting, utility contracting, electrical contracting, or low-voltage contracting from offering to perform, performing, engaging in, or contracting to engage in the performance of construction work or services directly with an owner, which work would otherwise require a license under this chapter, where the total scope of the work to be performed is predominantly of the type for which such contractor is duly licensed to perform under Chapter 14 of this title such that any other work involved is incidental to and an integral part of the work performed within the scope of such license under said chapter and does not exceed the greater of $10,000.00 or 25 percent of the total value at the time of contracting of the work to be performed; provided, however, that such contractor may not delegate or assign the responsibility to directly supervise and manage the performance of such other work to a person unless such person is licensed under this chapter and the work being performed by such person is within the scope of that person’s license. (f ) Nothing in this chapter shall preclude a specialty contractor from offering or contracting to perform or undertaking or performing for an owner limited, specialty, or specific trade contractor work. However, nothing in this chapter shall permit a specialty contractor to perform work falling within the licensing requirements of Chapter 14 of this title where such specialty contractor is not duly licensed under such chapter to perform such work. The board shall by rule or policy by January 1, 2008, identify specialty contractors or other criteria to determine eligibility under the exemption of this subsection. The specialty contractor otherwise exempted from license requirements under this chapter may perform work for an owner that would otherwise require a license under this chapter where the total scope of the work to be performed is predominantly of the type for which such specialty contractor is duly recognized as exempt under this subsection by the board, provided that such other work involved is incidental to and an integral part of the exempt work performed by the specialty contractor and does not exceed the greater of $10,000.00 or 25 percent of the total value at the time of contracting of the work to be performed. (g) Nothing in this chapter shall preclude a person from offering or contracting to perform or undertaking or performing for an owner
repair work, provided that the person performing the repair work discloses to the owner that such person does not hold a license under this chapter and provided, further, that such work does not affect the structural integrity of the real property. The board shall by rule or regulation further define the term ‘‘repair’’ as used in this subsection and any other necessary terms as to the scope of this exemption. (h) Nothing in this chapter shall preclude any person from constructing a building or structure on real property owned by such person which is intended upon completion for use or occupancy solely by that person and his or her family, firm, or corporation and its employees, and not for use by the general public and not offered for sale or lease. In so doing, such person may act as his or her own contractor personally providing direct supervision and management of all work not performed by licensed contractors. However, if, under this subsection, the person or his or her family, firm, or corporation has previously sold or transferred a building or structure which had been constructed by such person acting without a licensed residential or general contractor within the prior 24 month period, starting from the date on which a certificate of occupancy was issued for such building or structure, then such person may not, under this subsection, construct another separate building or structure without having first obtained on his or her own behalf an appropriate residential or general contractor license or having engaged such a duly licensed contractor to perform such work to the extent required under this chapter, or it shall be presumed that the person, firm, or corporation did not intend such building solely for occupancy by that person and his or her family, firm, or corporation. Further, such person may not delegate the responsibility to directly supervise and manage all or any part of the work relating thereto to any other person unless that person is licensed under this chapter and the work being performed is within the scope of that person’s license. In any event, however, all such work must be done in conformity with all other applicable provisions of this title, the rules and regulations of the board and division involved, and any applicable county or municipal resolutions, ordinances, codes, permitting, or inspection requirements. (i) Nothing in this chapter shall preclude an architect licensed pursuant to Chapter 4 of this title, an interior designer registered pursuant to Chapter 4 of this title, or an engineer registered pursuant to Chapter 15 of this title from performing work or providing services within the scope of his or her registration for the practice of architecture or interior design or license for practicing engineering. (j) Nothing in this chapter shall preclude an architect licensed pursuant to Chapter 4 of this title, an interior designer registered pursuant to Chapter 4 of this title, or an engineer registered pursuant to Chapter 15 of this title from offering to perform or offering or
rendering design-build services to an owner; provided, however, that such offer or contract shall clearly indicate at the time of such offer or contract that all services of a general contractor incident to the design-build performance shall be performed by a duly licensed general contractor in compliance with other provisions of this chapter and that all services so offered or provided falling within the scope of the licensing requirements of this chapter are offered and rendered by a licensed general contractor in accordance with this chapter. (k) Nothing in this chapter shall apply to the construction, alteration, or repair of buildings classified as an agricultural occupancy or that are used for agricultural storage or agricultural purposes. (l) A contractor licensed under this chapter shall not be required to list on the face of a bid or proposal envelope the license number of any contractor licensed under Chapter 14 of this title that may or will be engaged to perform any work within the licensing requirements of Chapter 14 of this title which comprises part of the work for which such bid or proposal is submitted. (m) Dams, including both earth dams and concrete dams, designed for electrical generation, water storage, or any other purpose may be constructed by either a general contractor licensed under this chapter or by a utility contractor licensed pursuant to Chapter 14 of this title. (n) Nothing in this chapter shall apply to the construction or installation of manufactured homes as defined in paragraph (4) of Code Section 8-2-131.
History
Code 1981, § 43-41-17, enacted by Ga. L. 2004, p. 786, § 1; Ga. L. 2005, p. 1179, § 3/SB 124; Ga. L. 2006, p. 272, § 2/HB 1542; Ga. L. 2007, p. 569, § 9/SB 115; Ga. L. 2008, p. 324, § 43/SB 455.
Annotations
Code Commission notes. - Pursuant to Code Section 28-9-5, in 2007, in subsection (f ), a period was inserted at the end of the first sentence, a comma was inserted
following ‘‘2008’’ in the third sentence, and ‘‘predominantly’’ was substituted for ‘‘predominately’’ in the last sentence. Law reviews. - For annual survey of law on administrative law, see 62 Mercer L. Rev. 1 (2010). For annual survey on construction law, see 69 Mercer L. Rev. 63 (2017). For article, ‘‘Construction Law,’’ see 70 Mercer L. Rev. 51 (2018).
JUDICIAL DECISIONS Receipt of benefit by client. - When it is undisputed that the client has received the benefit for which the client has paid and the unlicensed general contractor has received no benefit, nothing in the plain language of O.C.G.A. § 43-41-17 suggests that the General Assembly intended either: (a) that the unlicensed general contractor must bear all of the costs of all benefits received by the client, in es-
sence subjecting the contractor to punitive damages; or (b) that the client is entitled to the windfall that such an outcome would entail. Ussery v. Goodrich Restoration, Inc., 341 Ga. App. 390, 800 S.E.2d 606 (2017). Return of funds denied. - Judgment was properly entered in favor of the plaintiff on the defendant’s counterclaim against the plaintiff for return of funds
the defendant paid to the plaintiff, which was premised on the proposition that the defendant’s agreement with the plaintiff was illegal as the plaintiff violated O.C.G.A. § 43-41-17 by acting as a general contractor without a license, because the entire amount the plaintiff received out of the defendant’s insurance proceeds was paid to the subcontractors who undisputedly performed work on the defendant’s home, and the plaintiff realized no profit in connection with the project; and the defendant did not identify any damage to the defendant’s home that was caused by the plaintiff or the plaintiff ’s subcontractors. Ussery v. Goodrich Restoration, Inc., 341 Ga. App. 390, 800 S.E.2d 606 (2017). Construction contract not enforceable in law or in equity. - Because a construction contractor and the contractor’s officers did not have Georgia contractor’s licenses when the construction contract was executed and when the work was performed pursuant to the contract, under O.C.G.A. § 43-41-17(b), the construction contract was not enforceable by the contractor in law or in equity against the homeowner. Baja Props., LLC v. Mattera, 345 Ga. App. 101, 812 S.E.2d 358 (2018). Owner was entitled to summary judgment on a contractor’s counterclaims because O.C.G.A. § 43-41-17(b) barred the contractor’s claims because the contractor was not licensed. The court rejected the contractor’s claim that the contract was voidable, not void; the statute was enacted not merely as a revenue measure but was intended as a regulation of such business in the interest of the public; therefore, contracts made in violation of the statute were void and unenforceable. Saks Mgmt. & Assocs. v. Sung, 356 Ga. App. 568, 849 S.E.2d 19 (2020). License of LLC member could not be imputed to LLC. - In a dispute over a contract to transfer property and build a house, the trial court correctly concluded that the LLC member’s status as a licensed contractor could not be imputed to the LLC and, thus, the LLC could not enforce the contract because the mere fact that the LLC had in its employ a person who was otherwise licensed as a qualify-
ing agent was insufficient for the LLC to qualify as a licensed contractor. LFR Investments, LLC v. Van Sant, 355 Ga. App. 101, 842 S.E.2d 574 (2020). Construction contract was not enforceable in law or in equity because O.C.G.A. § 43-41-2, defining contractors, would not be construed to mean that a person was a contractor only if the person had contractual risk to the owner for the performance and cost of the construction; the appellee was a contractor and was required to have a license as the appellee entered into a contract with the appellants to perform construction or improvement to two properties; the appellee did not have a contractor’s license; and, even if all of the work done by the appellee was repair work, the exception regarding repair work did not apply as the appellee did not disclose to the appellants that the appellee did not hold a contractor’s license. Fleetwood v. Lucas, 354 Ga. App. 320, 840 S.E.2d 720 (2020). Unlicensed contractor could not recover against homeowner. - Contractor’s suit against a homeowner seeking over $33,000 for remodeling services was subject to summary judgment; the contract was void and unenforceable under O.C.G.A. § 43-41-17(b) because the contract provided for electrical and plumbing work and the contractor did not have licenses for electrical and plumbing work as required by O.C.G.A. § 43-14-8. Restor-It, Inc. v. Beck, 352 Ga. App. 613, 835 S.E.2d 398 (2019). Preliminary injunction improper. - Superior court erred in granting contractors a preliminary injunction restraining the Georgia State Licensing Board for Residential and General Contractors and a county from enforcing a licensing law, O.C.G.A. § 43-41-1 et seq., because: (1) harm did not flow to the contractors from any failure on the part of the county to comply with notice of the licensing law pursuant to O.C.G.A. § 43-41-14(b) or to provide other specific notice of the licensing law going into effect since the lack of notice did not result in the contractors’ consequent failure to comply with the law and thereby obtain an exemption under O.C.G.A. § 43-41-17(a); (2) the grant of the preliminary injunction operated op-
pressively on the rights of the county and the Board and also on the rights of the citizens of the state since the injunction effectively enjoined, without an apparent valid basis, the operation of a licensing law; and (3) the refusal to grant the requested injunction would not work irreparable injury to the contractors or leave the contractors without remedy in the event the contractors ultimately prevailed in the contractors’ challenge to the licensing law. Since § 43-41-14(b) became effective on May 29, 2007, approximately a month before the July 1, 2007 deadline for filing an application for examination exemption, and under that general statute the contractors were charged with notice
of the licensing law including the time-limited provision allowing examination exemption. Ga. State Licensing Bd. for Residential & Gen. Contrs. v. Allen, 286 Ga. 811, 692 S.E.2d 343 (2010). Summary judgment not appropriate when dispute existed over agreement and effective date of section. - Homeowner was not entitled to summary judgment on the ground that O.C.G.A. § 43-41-17(b) applied to the parties’ contracts because there was a dispute over whether the parties entered into the oral agreement before or after § 43-41-17 became effective. Wagner v. Robinson, 329 Ga. App. 169, 764 S.E.2d 189 (2014).