Financially Responsible Officer (FRO): The Responsibilities of Primary Qualifying Agents

Under Chapter 489, Florida Statutes, primary qualifying agents are, typically, considered the main decision maker(s) of the business organization.  As a general rule for construction licensing, increased responsibility leads to increased liability.  Read on to find out what responsibilities primary qualifying agents have, what is a financially responsible officer or FRO, and how to limit liability.

Read on what responsibilities primary qualifying agents have under Florida Law, what is a financially responsible officer or FRO, and how to limit liability

Overview

Generally speaking, all primary qualifying agents for a business organization are jointly and equally responsible for: (1) supervision of all operations of the business organization, (2) all field work at all job sites, and (3) financial matters, both for the organization in general and for each specific job.  Fla. Stat. § 489.1195(1)(a).

Multiple Primary Qualifying Agents – Joint Agreement

Business organizations that have more than one qualifying agent may designate a sole primary qualifying agent for the business organization by a joint agreement.  Fla. Stat. § 489.1195(2)(a).  The agreement must be executed by all qualifying agents for the business organization and must be approved by the Construction Industry Licensing Board (“CILB”).  The qualifying agent designated for a business organization by a joint agreement is the sole primary qualifying agent for the business organization, and all other qualifying agents for the business organization are secondary qualifying agents.  Fla. Stat. § 489.1195(2)(c).

A designated sole primary qualifying agent has all the responsibilities and duties of a primary qualifying agent, notwithstanding that there are secondary qualifying agents for specified jobs.  Fla. Stat. § 489.1195(2)(d).  The designated sole primary qualifying agent is jointly and equally responsible with secondary qualifying agents for field work supervision.  Fla. Stat. § 489.1195(2)(d).  If you are interested in learning about the responsibilities of secondary qualifying agents, read my blog on the Liability of Secondary Qualifying Agents Pertaining to Civil Judgments.

Financially Responsible Officer (FRO)

Where a business organization has designated a financially responsible officer (“FRO”), the primary qualifying agent is only “responsible for all construction activities of the business organization, both in general and for each specific job.”  Fla. Stat. § 489.1195(1)(c).  The designated FRO is responsible for “all financial aspects of the business organization.”  Fla. Stat. § 489.1195(1)(b).  For CILB’s purposes, the FRO is the financial manager of the business organization.  In reality, typically, the majority owner of the company controls the financial aspects of the company.  Assigning a FRO is strictly to alleviate licensure liability for primary qualifying agents pertaining to financial violations of Chapter 489, Florida Statutes.

Conclusion

In most cases, primary qualifying agents are responsible for all aspects of a business organization.  Therefore, the CILB can discipline all primary qualifying agents of a business organization, regardless of whether the violation was committed by an employee or a primary qualifying agent. Prior to submitting an application to qualify a business organization, think about the responsibilities and potential liability you will take on.  It is extremely important to consider the structure of the business organization when submitting your application.


For more on this topic, read this additional blog article:

https://www.jimersoncobb.com/blog/2017/10/personal-liability-qualifying-agents-florida/

 

CATEGORY: Florida Construction Industry Law Blog Practice Areas: ,