Racwell: An Unlicensed Contracting Company Could Not Collect Its Balance

Reviewed September 7, 2026.

In Racwell Construction, LLC v. Manfredi, 61 AD3d 731 (2d Dept 2009), the contracting LLC lacked the required Westchester home improvement license when it performed residential renovations. Its claim for an additional $146,270 failed. The earlier version of this article misstated that amount.

Using a license number issued to a separate corporation with the same owner did not cure the LLC’s deficiency. Nor did the homeowners’ alleged knowledge of the licensing problem create an exception. The court also rejected the argument that the homeowners were outside the law’s protection: they acquired title and made the initial payment before work began and intended to live there.

Counterclaims still require proof

The homeowners did not automatically win their own claims. Their expert proof concerning defects and overcharges lacked an adequate factual or qualifications foundation. The construction valuation expert had not seen the property before work began and could only speculate about demolition and labor.

The practical lessons apply to both sides: verify the license of the actual contracting entity, document existing conditions, and retain qualified experts who can connect their conclusions to evidence. A licensing defense and a damages counterclaim require separate analysis.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract and payment litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

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