The importance of licensing

A 2008 Georgia case illustrates the importance of proper licensing for certain subcontractors, including those performing electrical work. Some subcontractors perform great work, but for whatever reason their principal failed to obtain an appropriate license. For electrical subcontractors, this would be from the Division of Electrical Contractors. Regulation of certain trades, and licensing requirements, applies the contracting work affects "the public interest."

The 2008 case, JR Construction/Electric v. Ordner Construction, 669 S.E. 2d 224 (Ga. App. 2008), involved an out of state electrical subcontractor who sought to satisfy the licensing requirement by joint venturing with a local, licensed subcontractor. The Court found that this was inadequate because of the limited services performed by the licensed individual--he showed up, according to the evidence, only to provide the license. As a result, the Court invalidated the lien, and held that the subcontract was unenforceable. The subcontract was void because it violated public policy.

Based on this case, subcontractors lacking a proper license may be able to protect themselves by joint venturing, but only if the licensed individual observes and supervises the work.