A contractor fails to pay a subcontractor $12,000 for completed work. The subcontractor files a complaint with the licensing board. What action can the board take against the contractor's license?
Correct Answer
A) Suspend or revoke the license
The Georgia Construction Industry Licensing Board has authority to suspend or revoke a contractor's license for failure to pay subcontractors or suppliers, as this constitutes unprofessional conduct.
Why This Is the Correct Answer
The Georgia Construction Industry Licensing Board has broad disciplinary authority over licensees' professional conduct, which includes the obligation to pay subcontractors and suppliers for completed work. Failure to pay constitutes unprofessional or dishonest conduct under Georgia licensing statutes. The board can suspend the contractor's license (temporary removal of practice rights) or revoke it outright (permanent removal), depending on the severity and circumstances of the violation.
Why the Other Options Are Wrong
Option B: Issue a warning only
Issuing a warning only would be insufficient and inconsistent with the board's disciplinary authority under Georgia law. While a warning may accompany other actions, it is not the sole available remedy — and for a financial dispute of $12,000, the board has full authority to take more serious disciplinary action.
Option C: No action - this is a civil matter
Treating this as a civil matter only and taking no board action is incorrect. While the subcontractor may also pursue civil remedies (lawsuit, lien), the licensing board separately and independently has authority to investigate and discipline contractors for financial misconduct. These remedies are not mutually exclusive.
Option D: Require additional insurance only
Requiring additional insurance does not address the underlying conduct (failure to pay). Insurance relates to risk coverage, not accountability for contractual financial obligations. The board's appropriate response to non-payment is disciplinary action against the license, not an insurance mandate.
Memory Technique
Remember: 'Pay your subs or lose your license.' Georgia's licensing board treats non-payment as professional misconduct — not just a business disagreement. The board's tools are license suspension and revocation. Civil courts handle money judgments; the board handles license discipline.
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