When a Florida construction company’s qualifier resigns, is terminated, retires, or otherwise stops qualifying the business, the company can face an immediate licensing problem.
The most important point is simple:
60 Days to Replace — Not 60 Days to Operate
Florida law generally gives a construction company 60 days to employ another qualifying agent after its only qualifier leaves.
But that does not mean the company automatically has 60 days to keep operating as usual.
If the departing qualifier was the company’s only qualifying agent, the company generally may not continue engaging in contracting until another qualifying agent is employed, unless the company obtains the temporary authority permitted by Florida law.
That distinction is critical.
The 60-day period is a deadline to replace the qualifier. It is not an automatic 60-day extension of the former qualifier’s license.
What Is a Florida Qualifying Agent?
Florida construction businesses generally must operate through an appropriately licensed qualifying agent.
The qualifying agent is commonly referred to as the company’s “qualifier.”
A qualifier is not simply someone who allows a company to use his or her contractor license.
Florida law places real responsibility on a qualifying agent for the company’s licensed contracting activities. Depending on the company’s structure and whether a financially responsible officer has been approved, those responsibilities may include supervision of:
- Construction activities;
- Permitting and inspections;
- Compliance with licensing requirements;
- Field operations;
- Construction-related decision-making; and
- Certain business and financial responsibilities.
Because of those responsibilities, the relationship between the company and the qualifier should generally be governed by a written qualifier agreement.
What Happens When the Qualifier Leaves?
Florida Statute § 489.119 addresses what happens when a qualifying agent stops being affiliated with a construction business.
The departing qualifier must notify the Florida Department of Business and Professional Regulation, commonly referred to as DBPR, that the affiliation has ended.
If the departing qualifier was the company’s only certified or registered contractor, the company also has obligations arising from the termination.
The statute generally gives the company 60 days from termination of the affiliation to employ another qualifying agent.
That is where confusion often begins.
The 60-Day Rule Is Not a Grace Period
Some contractors incorrectly assume that once the qualifier leaves, the company has another 60 days to continue taking jobs, performing construction work, pulling permits, and operating normally.
That is not what the statute provides.
If the company has lost its only qualifying agent, the company generally cannot engage in contracting until another qualifying agent is employed.
In other words:
The company gets 60 days to replace the qualifier. It does not automatically get 60 days to continue contracting without one.
This issue can be especially serious for companies with multiple active projects when the qualifying relationship suddenly ends.
Can the Company Continue Existing Projects?
Possibly, but the company may need special temporary authority.
Florida law allows the Executive Director or Chair of the Construction Industry Licensing Board to grant a temporary, nonrenewable certificate or registration in certain circumstances.
That temporary authority may be granted to an eligible representative of the business, such as its:
- Financially responsible officer;
- President;
- Partner; or
- General partner of a limited partnership.
The person receiving the temporary authority assumes the responsibilities of a primary qualifying agent during that period.
The important point is that this authority is not automatic.
The company cannot simply decide that it is operating under the 60-day rule and continue working.
Temporary Authority Is Generally Limited to Existing Incomplete Contracts
The statutory temporary certificate or registration is designed to allow the business to proceed with certain incomplete contracts.
It is not intended to permit unrestricted new contracting activity.
Generally, the statute addresses contracts that:
- Were entered into before the qualifier’s affiliation ended;
- Were awarded to the company before the qualifier left; or
- In certain circumstances, were later awarded where the company had already submitted the low bid before the qualifier’s departure.
The purpose is essentially to allow an orderly transition and completion of existing obligations.
The temporary authority should not be treated as a substitute for obtaining a replacement qualifier.
Can the Company Take New Jobs During the 60 Days?
A company that has lost its only qualifier should be extremely cautious about taking new work.
The temporary authority contemplated by the statute is focused on incomplete existing contracts, not on allowing the business to continue its normal contracting operations.
Before a replacement qualifier is in place, the company should carefully evaluate whether it can legally:
- Enter into new construction contracts;
- Submit new bids;
- Sign new proposals;
- Pull permits for new projects;
- Begin new construction work; or
- Hold itself out as authorized to perform new contracting work.
The safer way to understand the statutory framework is:
60 days to replace the qualifier does not equal 60 days to conduct business as usual.
What Should the Company Do Immediately?
If a company’s only qualifier leaves, the company should immediately review its licensing status and every open project.
Among other things, the company should identify:
- All active contracts;
- All open permits;
- All pending permit applications;
- Projects awaiting inspections;
- Projects awaiting certificates of occupancy;
- Contracts that were signed before the qualifier left;
- Contracts that were not yet signed;
- Pending bids;
- Projects involving corrective or warranty work; and
- Any projects still using the departing qualifier’s license information.
The company should then determine whether it needs temporary statutory authority and begin the process of replacing the qualifier.
This is not an issue that should be left until the end of the 60-day period.
What Happens to Existing Permits?
Open permits can create additional complications.
The fact that a permit was issued while the former qualifier was affiliated with the company does not necessarily mean that the company can continue indefinitely under that qualifier’s license.
Depending on the circumstances, it may be necessary to:
- Notify the building department;
- Update the contractor or qualifier on the permit;
- Submit new licensing documents;
- Obtain temporary qualification authority;
- Address pending inspections;
- Transfer responsibility for permit closeout; or
- Coordinate with the owner or local building official.
Companies should review permit status immediately when a qualifier leaves.
The Departing Qualifier Also Has Exposure
The company is not the only party that should act quickly.
A departing qualifier should make sure DBPR records accurately reflect when the relationship ended.
The qualifier should also consider documenting:
- The effective termination date;
- Written resignation or termination;
- Notice to DBPR;
- Active projects;
- Outstanding permits;
- Pending inspections;
- Known code violations;
- Customer complaints;
- Warranty issues;
- Access to the qualifier’s license information;
- Use of the qualifier’s name or license number; and
- Any contractual obligations that survive termination.
A qualifier should not allow a former company to continue representing that the qualifier remains affiliated with the business after the relationship has ended. Also the Qualifier has an ongoing duty to ensure that outstanding work is not deemed abandoned.
A Company Cannot Simply “Rent” a Replacement License
Another common mistake is attempting to solve the problem by finding a licensed contractor willing to allow the company to use the contractor’s license.
Florida’s qualifying-agent system requires more than simply supplying a license number.
The qualifier must actually undertake the responsibilities imposed by Florida law.
An arrangement in which someone is paid merely to “lend” or “rent” a contractor license, while exercising little or no supervision over the company’s construction operations, can create serious licensing and disciplinary issues.
A replacement qualifier relationship therefore needs to be a real supervisory relationship, not just a paperwork arrangement.
Why the Qualifier Agreement Matters
A properly drafted qualifier agreement should address what happens before either side ends the relationship.
Important provisions may include:
- Advance notice of resignation;
- Advance notice of termination;
- Cooperation with DBPR filings;
- Replacement-qualifier transition;
- Existing projects;
- Open permits;
- Final inspections;
- Permit closeout;
- Compensation during the notice period;
- Per-permit compensation;
- Bonuses;
- Insurance;
- Indemnification;
- Access to company records;
- Use of the qualifier’s license;
- Post-termination cooperation; and
- Obligations that survive termination.
A construction company may want enough advance notice to locate and obtain approval of a replacement qualifier.
The qualifier, meanwhile, should avoid remaining legally associated with a company that the qualifier no longer supervises.
A good agreement should address both concerns.
What If the Company and Qualifier Are Already Fighting?
Qualifier disputes often involve both licensing issues and contractual disputes.
The parties may disagree over:
- Unpaid salary;
- Monthly qualifier compensation;
- Per-permit fees;
- Bonuses;
- Employment obligations;
- Construction decisions;
- Licensing expenses;
- Indemnification;
- Insurance;
- Responsibility for project problems;
- Responsibility for DBPR complaints; or
- Whether adequate supervision occurred.
These contractual disputes do not change the licensing requirements.
For example, the company may believe the qualifier breached the agreement by resigning without adequate notice.
That may create a contractual claim.
But it does not necessarily allow the company to continue using the former qualifier’s license.
Likewise, the qualifier’s departure does not necessarily eliminate responsibility for events that occurred while the qualifier was still associated with the company.
Companies Should Have a Qualifier Exit Plan Before They Need One
A company that depends on a single qualifier should plan in advance for what happens if that person leaves.
The company should know:
- How much notice the qualifier must provide;
- Who will notify DBPR;
- Who will review existing contracts;
- Who will review active permits;
- Whether temporary authority will be requested;
- Whether an eligible officer can obtain that temporary authority;
- How existing projects will be handled;
- How quickly a replacement qualifier can be retained;
- How owners and building departments will be notified when necessary; and
- How outstanding compensation and contractual obligations will be resolved.
The qualifier should have a similar exit procedure.
The Bottom Line: 60 Days to Replace, Not 60 Days to Operate
This is the rule Florida construction companies should remember:
If your company’s only qualifier leaves, you generally have 60 days to employ a replacement qualifier. That does not mean you have 60 days to continue contracting without one.
Until a replacement qualifier is employed, the company generally may not continue engaging in contracting unless it obtains the temporary authority permitted under Florida law.
Even then, that temporary authority is generally limited to allowing the company to proceed with qualifying incomplete contracts.
The safest approach is to address the licensing issue immediately.
Do not wait until day 59.
Florida Qualifier Agreements and DBPR Representation
Andrew Douglas, P.A. represents Florida contractors, qualifying agents, and construction companies in matters involving contractor licensing and DBPR regulation.
The Firm assists with:
- Qualifier agreements;
- Qualifier resignations and terminations;
- Replacement-qualifier transitions;
- Temporary qualification issues;
- Active permit and project-transition issues;
- DBPR complaints and investigations;
- Contractor licensing disputes;
- Financially responsible officer issues; and
- Disputes between construction companies and qualifying agents.
If your construction company is losing its qualifier, or if you are a licensed contractor seeking to end a qualifying relationship, the issue should be addressed before additional contracting activity creates a larger licensing problem.
Contact Andrew Douglas, P.A. to discuss Florida contractor licensing and qualifier matters.
Frequently Asked Questions
Does a Florida construction company have 60 days to keep working after its qualifier leaves?
No. The 60-day period generally gives the company time to employ another qualifying agent. It is not an automatic 60-day period during which the company may continue contracting without a qualifier.
What is the easiest way to remember Florida’s 60-day qualifier rule?
60 days to replace — not 60 days to operate.
Can the company finish existing projects?
Potentially. Florida law allows certain eligible company representatives to seek a temporary, nonrenewable certificate or registration that may permit the company to proceed with qualifying incomplete contracts.
Is that temporary permission automatic?
No. Temporary authority must be granted pursuant to the statute. The company should not assume that it automatically exists merely because the 60-day replacement period has begun.
Can the company take new jobs under the temporary authority?
The statutory temporary authority is generally directed toward completing qualifying incomplete contracts. It should not be treated as general authorization to continue taking new contracting work.
Who can potentially receive the temporary certificate or registration?
Depending on the company’s structure, the statute identifies certain eligible representatives, including a financially responsible officer, president, partner, or general partner.
Does the departing qualifier need to notify DBPR?
Yes. A qualifying agent who ceases to be affiliated with the business has a statutory notification obligation.
Should the company have a written qualifier agreement?
Yes. A properly drafted qualifier agreement should address resignation, termination, notice, DBPR filings, open permits, active projects, compensation, indemnification, insurance, and post-termination obligations.