1. In Florida, every contractor must be licensed in the state before working on a home building or remodeling project.
2. There are different types of contractor licenses, such as certified or registered, and they are regulated by the Florida Department of Business and Professional Regulation.
3. It is important to check a contractor’s license before hiring them for a project.
4. Certain types of work, such as cabinets, countertops, flooring, and paint, do not require state licensure for contractors.
5. Construction contracts used in home building can be biased in favor of the contractor, so it is important for property owners to have independent counsel review the terms before signing. – Florida construction contracts must include the licensee’s number, construction lien language, energy information, and insulation ratings.
– Basic provisions in a Florida construction contract should include a legal description of the land, description of plans and specifications, total contract price and payment schedule, and time of commencement and completion.
– Construction contracts in Florida should also include provisions for lien releases, warranties, property insurance coverages, payment or performance bonds, and indemnifications.
– If the contractor owns the land until completion, the contract should include provisions for transferring title, deed type, closing details, and title insurance.
– Many parties involved in construction may have construction lien rights for unpaid improvements, which can lead to a lien against the property or even foreclosure if unpaid. – Lien rights extend to subcontractors, suppliers, and laborers.
– Homeowners may be liable for payment even if they have already paid the contractor.
– To protect against construction liens, homeowners should require lien waivers or releases from everyone working on the project.
– Homeowners must obtain a signed lien release or waiver from anyone sending a Notice to Owner before making further payments to the contractor.
– Florida law allows homeowners to request a list of subcontractors and suppliers from the contractor.
– Important construction lien related documents include the Notice of Commencement, which must be executed by the owner and recorded before the first inspection can be approved. – The Notice of Commencement contains information about the project, including the owner’s name and address, legal property description, contractor’s information, and lender’s information if applicable.
– Construction must begin within 90 days of recording the Notice of Commencement.
– It is advisable not to record a Notice of Commencement before closing on a construction loan, as it may cause delays in construction and financing.
– The Notice of Commencement is effective for one year after it is recorded, unless otherwise specified.
– A “payment bond” must be attached to the Notice of Commencement if required by the contractor to prevent liens on the property.
– The Notice to Owner is a legally required notice that informs owners of construction projects about the contractors and suppliers working on the project.
– The Notice to Owner must be sent to the owner by subcontractors or suppliers who did not directly contract with the owner and later file a lien on the property. 1. A Claim of Lien is a formal notice that a lien has been placed on a property in Florida.
2. If the lien is a result of property improvements, the lienor has the right to take action to enforce the lien, including foreclosure and forced sale of the property.
3. A construction lien becomes unenforceable 365 days after it was recorded, unless certain steps are taken to shorten that time.
4. It is important to take a Claim of Lien seriously and not ignore it, and to consult with a Florida attorney experienced in construction law for options to remove the lien or defend against its enforcement. 1. There is no limit on the initial deposit or progress payments a contractor may require, as long as it is outlined in the construction contract.
2. Any deposit over 10% of the contract price imposes additional legal obligations on the contractor for obtaining permits and starting construction.
3. Payment draws should closely reflect the value or percentage of work completed, based on a payment schedule in the contract.
4. A substantial final payment should be made only after the certificate of occupancy has been issued and all punch list corrective work has been completed.
5. Owners should require a partial waiver or release of all lien rights from the contractor and subcontractors and suppliers. – Property owners must obtain a Contractor’s Final Payment Affidavit from the contractor before making final payment.
– Failure to obtain this affidavit may result in the property being exposed to liens for unpaid amounts to subcontractors or suppliers.
– Property owners should seek legal advice to ensure that unpaid amounts to subcontractors and suppliers are properly paid before making any further payment to the contractor.
https://www.jimersonfirm.com/blog/2012/04/basic-considerations-for-building-or-renovating-a-home-in-florida/
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