[CLC-Discussion] Construction contracting arrangement

Tue Oct 4 12:09:12 PDT 2022

Direct contracting with the owner is fine for trades that hold licenses under 489.105(3)(d) – (q). But a trade outside of those categories will have to work under (and contract with) a 489.105(3)(a) – (c) contractor. For example, framing, concrete, structural steel, fenestration, various interior finishes, etc., all have to be under a GC (or BC or RC if they qualify for the particular project).

Bruce Partington | Shareholder
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From: clc-discussion-bounces at lists.flabarrpptl.org <clc-discussion-bounces at lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, October 4, 2022 1:06 PM
To: clc-discussion at lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Construction contracting arrangement

The owner may hire multiple prime contractors without needing a construction license.  Each contractor (that you labeled as “subcontractors”) would need to be licensed in its field in order to contract to do the work.

Reese J. Henderson, Jr.
Shareholder
Florida Bar Board Certified in Construction Law
Florida Supreme Court Certified Circuit Civil Mediator

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From: clc-discussion-bounces at lists.flabarrpptl.org <clc-discussion-bounces at lists.flabarrpptl.org> On Behalf Of RPPTL CLC-Discussion
Sent: Tuesday, October 4, 2022 1:58 PM
To: 'clc-discussion at lists.flabarrpptl.org' <clc-discussion at lists.flabarrpptl.org>
Subject: Re: [CLC-Discussion] Construction contracting arrangement

This message originated outside of GrayRobinson.
________________________________
Good afternoon,

Does anyone have insight regarding certain licensing issues (described below) arising from the following potential contracting arrangement:

·       The owner (who is not a licensed entity) of a multi-family residential property would enter into a contract with a construction management company (a licensed general contractor), whereby the general contractor would oversee/supervise various aspects of construction, including management activities related to subcontractors.

·       However, the owner—not the general contractor—would enter into the underlying subcontracts with various subcontractors, where the scopes of work of many of these subcontractors would require a license (electrical, plumbing, etc.)

I think it is clear that construction management activities would require a license, but I am wondering whether Owner’s “contracting” with the subcontractors directly might sufficiently trigger the following licensing exemptions under chapter 489: either (1) the “Big Boy” exemption under section 489.119(7) or (2) the “Developer” exemption under §489.105(6) (I borrow the above “Big Boy” and “Developer” descriptions from Mr. Klingen’s informative article from the Florida Bar website<https://link.edgepilot.com/s/7175cf3f/5wiMnjdNgUSKvjL179ZJcQ?u=https://www.floridabar.org/the-florida-bar-journal/licensing-of-florida-contractors/>).  I think that the two above exemptions may be subject to a few of the following issues under the above potential contracting arrangement:

1)      With respect to the “Big Boy” exemption, the main issue would appear to be whether the construction manager would qualify under the “employ” language of the statute.  In other words, does this provision require that the licensed individual (company?) be employed as W-2 employee as opposed to an independent contractor—or borrowing from chapter 489’s definition of “employee”, must be “a person who receives compensation from and is under the supervision and control of an employer who regularly deducts the F.I.C.A. and withholding tax and provides workers’ compensation, all as prescribed by law.”?

2)      With respect to the “Developer” exemption under §489.105(6), the main issue would appear to be whether this exemption could apply to the owner and subcontractor subcontract, or if that exemption is limited to contracts that involves the selling the completed residences.

Any help/guidance you may have would be greatly.  Appreciated; thank you!

Johnathan Ayers, Esq.
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
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