Home | About | Contact
Construction Contract


Generally, if you are building a home or doing residential renovation in Florida you will have a direct contractual relationship (be in privity) only with your contractor who probably will have contractual relationships with subcontractors or material suppliers. Subcontractors in turn may contract with sub-subcontractors who may have relationships with additional subs or suppliers. You will likely be in privity only with your prime contractor, all others providing improvement to your property are known as non-privity lienors.

Under Florida Construction Lien provisions, the right of a non-privity lienor to lien your property applies only to contracts (written, oral or implied) greater than $2,500. For projects less than $2,500 the provider of improvements must have a direct contractual relationship with the owner in order to have any lien rights.

There is no requirement under the Construction Lien Law that a written contract exist, however Construction Contracting provisions of the Florida code require that a contractor may not obtain a building permit without first entering into a contract.

Contract Provisions
Mandatory Notice – Construction Lien Law
Any direct contract greater than $2,500 between an owner and a contractor, related to improvements to real property consisting of single or multiple family dwellings up to and including four units, must contain the following notice printed in no less than 12-point, capitalized, boldfaced type on the front page of the contract or on a separate page, signed by the owner and dated:
    ACCORDING TO FLORIDA'S CONSTRUCTION LIEN LAW (SECTIONS 713.001-713.37, FLORIDA STATUTES), THOSE WHO WORK ON YOUR PROPERTY OR PROVIDE MATERIALS AND SERVICES AND ARE NOT PAID IN FULL HAVE A RIGHT TO ENFORCE THEIR CLAIM FOR PAYMENT AGAINST YOUR PROPERTY. THIS CLAIM IS KNOWN AS A CONSTRUCTION LIEN. IF YOUR CONTRACTOR OR A SUBCONTRACTOR FAILS TO PAY SUBCONTRACTORS, SUB-SUBCONTRACTORS, OR MATERIAL SUPPLIERS, THOSE PEOPLE WHO ARE OWED MONEY MAY LOOK TO YOUR PROPERTY FOR PAYMENT, EVEN IF YOU HAVE ALREADY PAID YOUR CONTRACTOR IN FULL. IF YOU FAIL TO PAY YOUR CONTRACTOR, YOUR CONTRACTOR MAY ALSO HAVE A LIEN ON YOUR PROPERTY. THIS MEANS IF A LIEN IS FILED YOUR PROPERTY COULD BE SOLD AGAINST YOUR WILL TO PAY FOR LABOR, MATERIALS, OR OTHER SERVICES THAT YOUR CONTRACTOR OR A SUBCONTRACTOR MAY HAVE FAILED TO PAY. TO PROTECT YOURSELF, YOU SHOULD STIPULATE IN THIS CONTRACT THAT BEFORE ANY PAYMENT IS MADE, YOUR CONTRACTOR IS REQUIRED TO PROVIDE YOU WITH A WRITTEN RELEASE OF LIEN FROM ANY PERSON OR COMPANY THAT HAS PROVIDED TO YOU A "NOTICE TO OWNER." FLORIDA'S CONSTRUCTION LIEN LAW IS COMPLEX, AND IT IS RECOMMENDED THAT YOU CONSULT AN ATTORNEY.
The contractor, by means of this notice included in your contract, is obligated to inform you of the existence of the construction lien laws in Florida, of your responsibility to make certain that subcontractors, sub-subcontractors and material suppliers get paid or else they can lien your property, and the means to protect yourself against double payment by obtaining a Release of Lien from any person who has provided you a Notice to Owner.

If the contract is not written but is oral or implied, the notice must still be provided in a document referencing the oral or implied contract.

Even if your contractor fails to include this notice you remain obligated to make certain that those providing services or material get paid; nor does his failure disqualify valid liens from being claimed on your property.

Mandatory Notice – Florida Homeowners’ Construction Recovery Fund
The Florida Homeowners’ Construction Recovery Fund is a last resort to try to recover losses caused by unlawful acts of your contractor. Don’t rely on it to protect you - protect yourself by following the procedures set out in the Construction Lien Law. Following is the required notification:
    FLORIDA HOMEOWNERS' CONSTRUCTION
    RECOVERY FUND

    PAYMENT MAY BE AVAILABLE FROM THE FLORIDA HOMEOWNERS' CONSTRUCTION RECOVERY FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE LOSS RESULTS FROM SPECIFIED VIOLATIONS OF FLORIDA LAW BY A LICENSED CONTRACTOR. FOR INFORMATION ABOUT THE RECOVERY FUND AND FILING A CLAIM, CONTACT THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD AT THE FOLLOWING TELEPHONE NUMBER AND ADDRESS:

The Fund notification statement is required to be included in any agreement or contract entered into for improvements to residential property in excess of $2,500.
Mandatory Notice – Buyer's Right to Cancel
Unless the agreement was closed at a state fair (really - a state fair), at the contractor’s office or after an express request for specific services made by the homeowner, residential contracts are “home solicitation sales” and have to give notice of the buyer's right to cancel. The notice should have the following language:
    THIS IS A HOME SOLICITATION SALE, AND IF YOU DO NOT WANT THE GOODS OR SERVICES, YOU MAY CANCEL THIS AGREEMENT BY PROVIDING WRITTEN NOTICE TO THE SELLER IN PERSON, BY TELEGRAM, OR BY MAIL. THIS NOTICE MUST INDICATE THAT YOU DO NOT WANT THE GOODS OR SERVICES AND MUST BE DELIVERED OR POSTMARKED BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER YOU SIGN THIS AGREEMENT. IF YOU CANCEL THIS AGREEMENT, THE SELLER MAY NOT KEEP ALL OR PART OF ANY CASH DOWN PAYMENT.
Mandatory Notice – Contractor’s Certification or Registration Number
The certified or registered contractor is required to place his/her state license number on all contracts and proposals.
Included Stipulation – Release of Lien
As the mandatory notice concerning the Construction Lien Law indicates you should include in your contract a stipulation that the contractor is obligated to provide you with Release of Lien documents executed by any person who has served you a Notice to Owner. Even if you do not have this stipulation in your contract you are within your rights to insist upon receiving the Release of Lien before you make any payments to your contractor.

Knowledge of Notice to Owner and Release of Lien documents are critical in preventing potentially disastrous liens being placed on your property. Whether you subscribe to the LienDefense program or not, make certain that you learn everything that you can about these documents.
Other Inclusions
You might consider that your contract includes, among other things:

  • The contractor’s name, street address, telephone number and state license number.
  • The property's numerical street address or full legal description.
  • A precise description of the work to be completed, including a work completion time line, dollar draw schedule, and list of materials included in the contract amount.
  • A listing of all required permits necessary to perform the job, whether the cost of the permit is included in the contract and a statement that the work is not complete, and final payment is not due, until all final inspections have been secured and any necessary certificates of occupancy or completion have been secured from the local building authority. Remember, your contractor is to pull all permits, not you as owner/builder.
  • Documents such as plans and specifications should be carefully referred to and incorporated in the contract.
  • Clearly defined methods for authorizing and valuing change orders.
  • Final payment clause agreeing that final payment is not due until all defective work is remedied, all Release of Liens have been obtained and a contractors’ Final Payment Affidavit provided.
  • A provision requiring final clean up of the job site.
  • A declaration from the contractor that they have in place all state required insurance coverage including liability, property and worker’s compensation.
  • Conflict resolution clause. In the event of a dispute, state what actions both parties will take and in what priority.
  • Warranty agreements including: length, terms and recourse.
  • Signatures of the Owner and Contractor.
For a more complete discussion of construction contracts in Florida please see our Review Your Contract webpage.

As discussed in the section on Unlicensed Contractors, any contract knowingly entered into with an unlicensed contractor is deemed unenforceable - you would be denied any remedy you might otherwise be entitled to under law for any breach the unlicensed contractor might make. Dealing with an unlicensed contractor would preclude you from any claim made to the Florida Homeowners' Construction Recovery Fund.

An unlicensed contractor is excluded from rights granted to lienors under the Construction Lien Laws, however, all lien rights are preserved for any subcontractors, material suppliers etc. who are not unlicensed and who have made improvements to your property and who are unpaid.

Contracts are important and can be complex, you should always consider that your contract, if prepared by the contractor, be reviewed by an attorney knowledgeable in Construction Law. You should always draft a construction contract with the help and guidance of a lawyer with experience in Construction Law. If you like we can help you to find just such a skilled attorney in your area - Legal Help.

Having a contract that defines the construction project and protects your legal rights is an important step in defending your property from potential liens and your wallet from unnecessary and costly expenditures. Knowing Construction Lien Law is also critical if you are undertaking a home renovation or constructing a new residence. LienDefense was established to help you learn and understand Florida's Construction Lien Law. Knowledge of the law can save you from paying more than you contracted for - can help you to defend against construction liens being placed upon your property.

Learn more about how LienDefense can help; please start by visiting our About Florida's Lien Law page to get an overview of how the law might affect you.

Florida's Lien Law

Welcome
Contractors - Contracts
Getting Started
The Law
A Few Things More
Reference
Forms
Legal Help