Understanding Florida’s New Laws on Construction Fraud
If you do business as a contractor in Florida, you will inevitably get into disagreements with homeowners. Such disputes can easily escalate into legal action if they are not dealt with promptly. And thanks to a recent change in Florida law, contractors need to take seriously the possibility of criminal prosecution if they fail to complete a construction project to the homeowner’s satisfaction.
Contractors Who Fail to Obtain Permits, Start Project on Time Could Face Felony Charges
Back in July, new legislation took effect in Florida amending the rules governing claims of contractor fraud. House Bill 7125 extensively rewrote existing Florida law on this subject, which is contained in Section 489.126 of the Florida Statutes.
Here is a brief rundown of how the revised Section 489.126 works:
- When a contractor receives an initial payment of at least 10 percent of the contract price for any repair, restoration, improvement, or construction job involving a residential property, the contractor is required to apply for any necessary permits within 30 days of receiving the payment, and to start the work within 90 days after all necessary permits have been issued.
- When a contractor fails to meet the deadlines, the client must send a written demand letter insisting the contractor either apply for the permits, start work, or refund the initial payment.+ If the contractor cannot meet these deadlines and refuses to refund the payment, the contractor must show “just cause” for the failure, unless the contractor and the client agree to an extension of time in writing; keep in mind, however, that failure to respond to the client’s demand letter within 30 days of receipt creates a legal inference that the contractor does not have “just cause”.“
- If the contractor receives total payments for a project “in excess of the value of the work performed,” the contractor may not refuse to complete the job within 90 days (or a different time period specified in the contract) or refund the excess money charged; if the client sends the contractor a written demand letter demanding completion or a refund, the contractor must reply within 30 days of receipt.
A contractor who violates the law is subject to criminal prosecution for theft. The degree of the offense–and the accompanying jail time–escalates depending on the total amount of money received:
- If the amount received was less than $1,000, the contractor can be charged with a first-degree misdemeanor;
- If the amount is between $1,000 and $19,999, the charge is a third-degree felony;
- If the amount is between $20,000 and $199,999, the charge is a second-degree felony;
- If the amount is $200,000 or greater, the charge is a first-degree felony.
Speak with a Florida Construction Attorney Today
As you can see, contractor fraud is a serious allegation that can land you in trouble not only with a dissatisfied client, but also the State Attorney’s office. This is why it is critical to seek competent legal advice before something goes wrong. If you need assistance from an experienced Florida contractor representation lawyer, contact Linhorst & Hockin, P.A., today to schedule a consultation.