The one-sided bar
O.C.G.A. 43-41-17(b) covers a contract entered on or after July 1, 2008, for work that requires a residential or general contractor license, performed by an unlicensed contractor. That contract is unenforceable in law or in equity by the unlicensed contractor.
The bar is one-sided. The statute says it does not affect the rights of parties other than the unlicensed contractor to enforce contract, lien or bond remedies.
The trap: treating the contract as void for both parties. Only the unlicensed contractor is barred. The owner is not the barred party, and passing inspection is not an exception in the statute.
What the unlicensed contractor loses
An unpaid unlicensed contractor has no remedy under 43-41-17(b):
- no contract claim, because the contract is unenforceable by that contractor;
- no lien claim; and
- no bond claim.
Keeping a lien claim or a bond claim contradicts the loss of lien and bond rights. Allowing a claim in equity contradicts the words "in law or in equity", which close both routes.
What the owner keeps
A homeowner who hired an unlicensed contractor for licensed work that turns out defective can still enforce the contract and pursue lien or bond remedies against the unlicensed contractor. The statute expressly preserves those rights for parties other than the unlicensed contractor.
- The contract is not void for both sides.
- The owner is not limited to reporting the contractor to the board.
- The "in law or in equity" language limits only the unlicensed contractor, not the owner.
Where to look in the book
The exam is open book, and the sole reference is the NASCLA Contractors Guide to Business, Law and Project Management, Georgia 3rd Edition. Its three parts:
- Part 1: business start-up.
- Part 2: operations, including estimating, contract management, scheduling, project management, safety and environmental duties, and relationships with employees and subcontractors.
- Part 3: financial management, tax basics and lien laws.
Contract management questions are answered from Part 2. Looking for contract material with the lien laws in Part 3 is a common error.