Requirements of Florida Contractors Who Receive Owner Money

For the Florida residential property owner, the construction process may seem confusing.  Most contractors either have years of experience and/or schooling which teaches them the means and methods of constructing a project.  Most Florida owners do not have the benefit of such experience and, as a result, many owners not understand the construction process or the application of money in that process.  In an effort to protect Florida property owners, the legislature has enacted laws to protect the them from unscrupulous contractors.   Often times, the owner is unaware of these protections and thus is unable to properly counter-act a contractor that has violated his/her practice act.

Once such protection that exists deals with the obligations and responsibilities of contractors when they receive money from a Florida residential property owner.  These obligations can be found in 489.126, Florida Statutes. A contractor who receives, as initial payment, money totaling more than ten percent (10%) of the contract price for repair, restoration, improvement, or construction to residential real property must:

  1. Apply for permits necessary to do work within 30 days, except where the work does not require a permit under the applicable codes, and
  2. Start the work within 90 days after the date all necessary permits for work are issued.

Under section (b), the contractor and Florida property owner can contractually agree to a longer time to start the work, if the project is more complicated or complex.  Additionally, a contractor who receives money for repair, restoration, addition, improvement, or construction of residential real property in excess of the value of the work actually performed cannot fail or refuse to perform any work for any 90-day period.  This can create a claim that the contractor has abandoned the project and lead to discipline under the contractor’s license.

Proof that a contractor received money for the repair, restoration, addition, improvement, or construction of residential real property and that the amount received exceeds the value of the work performed by the contractor and that: (1) the contractor failed to perform any of the work for which he or she contracted during any 60-day period; (2) the failure to perform any such work during the 60-day period was not related to the owner’s termination of the contract or a material breach of the contract by the owner; and (3) the contractor failed, for an additional 30-day period after the date of mailing of notification gives rise to an inference that the money in excess of the value of the work performed was taken with the intent to defraud.

The owner notification as contemplated above consists of a certified letter, return receipt requested, mailed to the address of the contractor as listed in the written contracting agreement. The letter must indicate that the contractor failed to perform any work for a 60-day period, that the failure to perform the work was not the result of the owner’s termination of the contract or a material breach of the contract by the owner, and that the contractor must recommence construction within 30 days after the date of mailing of the letter. If there is no address for the contractor listed in the written contracting agreement, or no written agreement exists, the letter must be mailed to the address of the contractor listed in the building permit application.

Any person who violates any provision of this statute is guilty of theft and can be prosecuted and punished under s. 812.014.  As for Florida residents, it is imperative that you make sure contractors are serving as good stewards of your money and that you know and understand your rights and remedies available.

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