New York State’s Appellate Division Second Department issued a decision on January 24, 2012 affirming that home improvement contractors are required to be licensed.  Without a home improvement license, the contractor cannot enforce its contractual rights for payment.

The case, Mario Velardo v. Ludwig Tomescu clearly holds that “[w]here a home improvement contractor is not properly licensed in the municipality where the work is performed, the contractor cannot recover for the work performed either under the contract or on a quantum meruit basis.”  In Velardo, the Court was dealing with Westchester County Administrative Code § 863.313, which provides in pertinent part that “[n]o person shall maintain, conduct . . . operate or engage in a home improvement business within the County of Westchester . . . unless such person is licensed pursuant to this article.” 

Similar to Westchester County, New York City maintains licensing requirements for home improvement contractors.  New York City Administrative Code §  20-387(a) provides “No person shall solicit, canvass, sell, perform or obtain a home improvement contract as a contractor or salesperson from an owner without a license therefor.”  The purpose behind the licensing requirements is “to safeguard and protect the homeowner against abuses and fraudulent practices by licensing persons engaged in the home improvement, remodeling and repair business.”  NYC Admin. Code 20-385.  The Code defines “Home Improvement” as:

“the construction, repair, replacement, remodeling, alteration, conversion, rehabilitation, renovation, modernization, improvement, or addition to any land or building, or that portion thereof which is used or designed to be used as a residence or dwelling place and shall include but not be limited to the construction, erection, replacement, or improvement of driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements to structures or upon land which is adjacent to a dwelling house. "Home improvement" shall not include (i) the construction of a new home or building or work done by a contractor in compliance with a guarantee of completion of a new building project, (ii) the sale of goods or materials by a seller who neither arranges to perform nor performs directly or indirectly any work or labor in connection with the installation of or application of the goods or materials, (iii) residences owned by or controlled by the state or any municipal subdivision thereof, or (iv) painting or decorating of a building, residence, home or apartment, when not incidental or related to home improvement work as herein defined. Without regard to the extent of affixation, "home improvement" shall also include the installation of central heating or air conditioning systems, central vacuum cleaning systems, storm windows, awnings or communication systems.” NYC Admin. Code 20-386.

Courts have also held that these license requirements are to be strictly construed and non-compliance bars recovery in both contract and unjust enrichment.  Intrepid Elec. Contr. Co., Inc. v. Serure, 34 A.D.3d 430; 824 N.Y.S.2d 351 (2d Dep’t 2006). 

These cases serve as a warning to contractors performing residential work.  Know your local licensing laws and follow them.  Failure to follow these laws can be a bar to your recovery of fees.