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What is the law for contractors starting work after down payment?

On Behalf of | Dec 21, 2021 | Construction Law |

In Florida, people who hire contractors for a home project are often unaware of the laws that dictate what contractors must do after they have agreed to do the work and taken a down payment. Some contractors might delay after receiving a down payment. They might not even start the work at all. Homeowners should know their rights based on the law to make sure the contractor lives up to their part of the agreement and does so in a timely manner. Contractors should also be fully aware of their legal requirements.

What is a contractor required to do after receiving a down payment?

If a contractor receives a down payment beyond 10% of the total contract price, then they must apply for the permits – if required – to do the work within 30 days. Once they have the permits, the work must start within 90 days. There might be just cause for failing to apply, beginning the project or issuing a refund. In some cases, the contractor and the customer have an agreement that the work will not start within this time-frame. If the contract is violated, then the owner can send a letter demanding that the contractor move forward with the process. If the contractor does nothing within the first 30 days, then it is reasonable to infer that there is no just cause for the delay.

Regarding the value of the work, the work done can be construed as worth less than what was paid in the following circumstances: none of the agreed upon work was done within 90 days; the work done was not connected to the owner terminating the contract or there being a material breach of the contract; or the contractor did not do the work, did not have just cause not to do the work, or terminated the contract and did not inform the owner. The contractor will have two options: either do the work or refund the money. Failing to do either could lead to criminal charges.

Contractors and homeowners should understand the law and details of a contract

A home project in which an owner hires a contractor can be more complex than people realize. There are laws dictating how and when contractors are supposed to move forward with adhering to the legal requirements after coming to an agreement and receiving a down payment. If construction delay litigation against construction companies commences, it can be complicated and difficult. Of course, there are cases in which illegality has taken place. Often, there is a simple misunderstanding. Still, it is imperative for contractors and homeowners to understand the law and to be protected with experienced help if challenges arise.

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Dana Watts is a board certified civil trial lawyer by the Florida Bar Board of Legal Specialization with more than 30 years of litigation experience. He also received an AV* peer review rating through Martindale-Hubbell.

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