By: Thomas S. Tripodianos Published: June 2012

Ability for Subcontractor to Recover Damages without having a Home Improvement License

Question. Can an unlicensed home improvement subcontractor that had been hired by a general contractor to construct various concrete walls on a house recover damages from a general contractor based on either breach of contract or for the reasonable value of the goods and services?

Answer. No. The contract was for the performance of home improvement services which required the subcontractor to obtain a home improvement contractor license and the subcontractor did not comply with that licensing requirement.

The general contractor, was a general contractor for improvements to be performed on certain real property owned by homeowners. The general contractor hired the subcontractor to perform a portion of the work by constructing various concrete walls as outlined in a subcontractor agreement.

The subcontractor alleges, that the general contractor breached the subcontractor agreement by failing to tender the full amount due. The general contractor responds that the subcontractor was not a licensed home improvement contractor and therefore cannot sue.

A home improvement contractor who is unlicensed at the time of the performance of the work for which he or she seeks compensation forfeits the right to recover damages based on either breach of contract or quantum meruit. Pursuant to CPLR 3015(e), a complaint that seeks to recover damages for breach of a home improvement contract or to recover in quantum meruit for home improvement services is subject to dismissal ... if it does not allege compliance with the licensing requirement.

Here, the general contractor established, that the subcontractor sought to recover damages for breach of a contract to perform home improvement services which required it to obtain a home improvement contractor license and that the subcontractor did not comply with that licensing requirement.

Although the licensing statutes are generally consumer protection statutes designed to protect homeowners they can be enforced by general contractors as well.

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