For many businesses seeking to enter the Florida construction industry, it often makes more sense to hire a qualifying license holder, rather than apply for a new license.
It can be a great option to save time and avoid the pain of sitting for another licensing exam. This is especially true given Florida is a “protectionist” construction licensing state, and does not offer reciprocity for out of state licenses holders.
However, before hiring a license holder, there are few considerations to be aware of:
1) The qualifier must be a W2 employee or partial owner of the businesses
Florida’s Construction Industry Licensing Board (CILB) requires that all qualifying license holders be either a legitimate W2 employee or partial owner of the company. That means that the license holder must be an employee or own 20% or more of the business. Also, it is a good idea to submit proof of this status with the initial application.
2) There should be a “qualifier agreement” covering various aspects of the relationship.
While not mandatory, it is a good idea for the construction businesses to enter into a qualifier agreement with the person who will hold the license for the company. This is similar to an employment agreement, but sets out specific duties and rights relating to the qualification of the business, such as:
- Compensation. The qualifier agreement should specify how much the qualifier will be paid, and any applicable terms relating to compensation. For example: the number of hours that must be contributed to the business, when compensation will be paid, and how much.
- Termination. The agreement should specify the reasons the qualifier can be terminated and what happens when they are. For example, if the license holder is the only qualifier for the business, it may be necessary to have them stay on in the short term so the business does not lose its license in the middle of operations.
- Moonlighting. Depending on the relationship with your qualifier, you may not want them moonlighting on the side. The business will especially not want them to open any projects or pull any permits for side jobs in the business’s name. Therefore, it is important to specify terms relating to moonlighting in the qualifier agreement.
- Oversight. As the company’s license holder who is responsible for overseeing construction, you will also want to specify the qualifier’s duties as they relate to oversight of projects. The agreement should specify what the qualifier must do in order to oversee the company’s projects and how much they will be paid for this service, if applicable.
3) It will still take time to apply to “attach” the license to the company
Hiring a qualifier is a way to skip the licensing exam in Florida, but it will not guarantee you can skip the long line of applications pending before the CILB. The qualifier must still apply with the CILB in order to qualify the company with their license.
Due to the short staff at Florida’s licensing agency, it can take 2-3 months or more for the application to be processed. Any errors in the application – even simple typos – can cause the CILB to reject the application and make this process even longer.
Therefore, it is recommended to take special care when submitting an application, and seek professional help if you are not familiar with this process.
4) Look for a license holder who is qualifying no more than one other company
The CILB is extremely wary of licensees who attempt to rent out their license to more companies than they can realistically supervise. Therefore, it is important to look for a license holder who is qualifying no more than one other company.
Applications to qualify a third (or more) business will result in a mandatory board appearance before the CILB where the license holder will have to explain their plan to the board. Not only can this slow down the licensing process, but it runs the risk of the CILB rejecting the application out right and having to start over at square one.
The best bet is to find a license holder who is qualifying no more than one other business with their license.
4) Conduct a Background Check on a License Holder Before Entering a Relationship
Many license holders who are willing to rent out their license are not the type of individuals that your business wants to build a long term relationship with. Doing so may result in trouble in the long term, but also during the application process.
Before hiring a qualifier, order a thorough background report, as the CILB will conduct its own background check during the application process which might uncover issues. Look at the qualifier’s license complaints, criminal history, and credit reports. While not every issue will be disqualifying, these should still cause a concern.
It is important to conduct this process early to avoid going through a long and expensive application process, which might result in rejection due to an issue that you could have discovered earlier on.
Conclusion
Hiring a license holder to qualify your business can be a great alternative to obtaining a new construction license in Florida. However, if choosing to do so, it is important to conduct your due diligence, follow necessary precautions, and ensure you are complying with Florida’s licensing regulations. If you are unfamiliar with this process, it is advisable to seek professional help.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
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