Licensing Challenges for Multi-State Design Practices
Kathleen Y. Hsu | Smith Currie & Hancock
February 10, 2015
Architects and engineers, typically contract to provide professional design services in a number of states and are, therefore, subject to each state’s licensure laws. It is important for design professionals to be aware of state-specific differences in licensing before entering into contracts in new jurisdictions. Penalties for non-compliance are severe and can reduce or eliminate a design professional’s right to payment under a contract.
Requirements for Licensing
Each jurisdiction has its own state-specific requirements for licensing as well as its own exceptions to licensure. Applications typically require reference forms, verification of educational degree and experience, professional examination score, related background information, and an application fee. Exceptions to licensure, while similar in many states, should be verified by examining state statutes.
Individual vs. Firm Licensing
Many states also require any business or firm that offers design services to be licensed as a professional design firm in that state. There may be separate requirements for firm registration that may include residency or a requirement that a certain percentage of firm members be licensed in a state. If a firm provides both architectural and engineering services, the firm may need to apply for a separate license for each discipline. Note that, in many states, a firm or business using variations of the words “architect” or “engineer” in its business name must be registered as a professional design firm even if it does not offer design services.
Firm licensing is wholly separate from individual licensing. Firms cannot rely on the licensing of individuals within the firm to meet firm licensing requirements in a particular state. Similarly, design professionals not licensed in a state cannot practice there in reliance on their firm’s licensing in that state.
Eceptions to firm licensing can include sole proprietorships, where an owner does business in his or her own name, or design/build firms. However, this varies from state to state and should be verified before practicing in a foreign jurisdiction.
Depending on the state, a design professional licensed in another state may be able to bid on a contract without being licensed in that state, as long as he or she completes registration before services are performed and before a contract is signed. States that allow unlicensed bidding typically require the design professional to submit either a notice of unlicensed bidding or a temporary permit application to the state licensing board. States have different timeframes for submitting an application for licensure after notice is given to the state licensing board.
But the majority of states prohibit unlicensed bidding on the theory that a design professional, when bidding on a contract, is offering to engage in professional services. The safest practice is, of course, to become licensed in a jurisdiction before bidding on contracts for design services.
Design Professional Acting as a Consultant
State-specific rules also govern the ability of a design professional who is unlicensed in a foreign jurisdiction to consult a licensed design professional on a project in which the licensed design professional is the principal. If the state does allow for consulting services, the design professional should be careful not to hold himself or herself out as a licensed design professional in that state and must not sign or stamp any documents. Moreover, the design professional should contract with the licensed design professional as a consultant rather than with the client, so as not to have control or supervision over the project.
Reciprocity/Comity Between States
A number of states allow design professionals with a license in good standing in another state to obtain its state’s license by reciprocity or comity. State boards typically accept an architect’s National Council of Architectural Registration Board (NCARB) council record or an engineer’s National Council of Examiners for Engineers and Surveyors (NCEES) exam as well as a state-specific application to support the request for licensure. The application usually requests educational information, past work experience, an affidavit or certification that the design professional has a license in another jurisdiction and is in good standing, and an application fee.
License Renewal or Reinstatement
If you were licensed in a state more than a year ago, confirm your licensure and take steps to renew your license, if it is no longer valid. Pay attention to the expiration date on your license to avoid a lapse in licensure during renewal. A design professional whose license has lapsed or is inactive may not perform professional services until the license is renewed or reinstated.
Timely renewal typically occurs two to three months prior to the license’s expiration. The renewal usually requires the license number, verification of information on file, and a renewal fee. Most states also require the licensed design professional to meet continuing education requirements to be eligible for renewal. Some states will accept the fulfillment of continuing education requirements in another state in which the design professional is licensed as sufficient to meet renewal requirements.
If renewal occurs a year or more after the registration renewal date, the state may require reinstatement of the lapsed license, wherein the design professional will be subject to a new application and reexamination. Reinstatement frequently also requires meeting a certain number of continuing education hours. To avoid this, be sure to make the state licensing board aware of any changes of address so that you receive individual and firm renewal notices by mail. Further, take note of whether the state licensing board for each license requires license renewal annually, biannually, or at some other frequency. It is the license holder’s responsibility to renew licenses on time to avoid lapses in licensure.
All states prohibit the unlicensed practice of design professional services. Repercussions range from fines to misdemeanors to felonies. Moreover, in many states, unlicensed design professionals lose their right to sue for services performed and must refund any payments made for services performed. As such, it is in every design professional and design professional firm’s interest to verify current licenses, renew licenses promptly, or obtain a new license when performing or offering to perform services in a foreign jurisdiction. In addition, design professionals must pay attention to any changes in state licensing board rules or state statutes in all jurisdictions where they are licensed. Board rules and state statutes pertaining to design professionals, are available on each state licensing board’s website.
The content of this article is intended to provide general information and as a guide to the subject matter only. Please contact an Advise & Consult, Inc. expert for advice on your specific circumstances.