Florida Construction Contracts Need More Than Two Pages to Be Legal

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I’m asked occasionally to recommend a simple 2-page construction contract for states like Florida.

Where can I get a contract like that?

If you see one of these two-page wonders, you can be sure it’s junk – at least in the State of Florida. The legislators in Tallahassee have seen to that. Every valid Florida construction contract will include several pages of notices and disclosures required by Florida law.

If you’ve been using a two-page contract for residential construction in Florida, here’s a handy guide to what you’re missing.

Opportunity to Repair (Florida Statures Chapter 558.005)

Every construction contract in Florida (except public transportation projects) must include the “notice of claim” statement. The contract is still valid if you omit this statement. But the fine for leaving it out is $500 under Florida Statutes – 775.08(3).

Buyer’s Right to Cancel (Florida Statutes – 501.031)

Unless the deal was closed at a state fair, at your office or after an express invitation to visit your client at home, residential contracts have to give notice of the buyer’s right to cancel.

If the deal was closed, for example, over lunch in a restaurant, on the phone, by email, on a golf course or at an architect’s office, it’s a home solicitation sale. I know that doesn’t make much sense. But it’s Florida law. The notice is required. Omission of the notice is a first degree misdemeanor punishable by up to a year in prison and a $1,000 fine under Florida Statutes – 775.082 and – 775.083.

Florida Construction Lien Notice (Florida Statutes – 713.015)

This notice has to appear in all residential prime contracts valued at $2,500 or more if work is either new construction or improvement of a building with four units or less. The notice has to be in 12-point bold caps and either on the front page of the contract or on a separate page. If the notice is on a separate page, this statement has to be signed by the owner and dated. Omitting this notice is a non-criminal violation punishable by a fine of up to $500 under Florida Statutes – 775.08(3) and may make it difficult for a prime contractor to enforce lien rights.

Construction Industry Recovery Fund Notice (Florida Statutes – 489.1425)

Omission of this notice is punishable by a fine of up to $500 for the first offense and up to $1,000 for a second or subsequent offense.

The Home Improvement Sales and Finance Act. (Florida Statutes – 520.73)

If a home improvement contract includes a finance charge, Florida law requires a statement in 10-point bold type directly above the owner’s signature. Omission of this notice requires a credit of all delinquency fees charged, plus attorney fees and costs.

If your Florida contracts fudge on these notices, you have an excuse. Some of these required notices are new. The right to repair notice became effective October 1, 2006. The lien notice law became effective in the present form on July 1, 2007.

This checklist covers only notices required by Florida law. Of course, all Florida contracts have to comply with Federal law – the 3-day right to cancel (12 C.F.R. 226.15 ), Federal Truth in Lending (15 U.S.C. 1601) and insulation disclosures (16 C.F.R. 460). If you do home improvement work in zips between 33010 and 34141, Miami-Dade Municipal Code – 10-33 requires additional disclosures.

Even if you’re not concerned about the threat of fines and jail time, there are good reasons to keep your contracts legal under Florida law. Get into a dispute on any job and the attorney for the other side will hammer away at every little flaw and blemish in your contract. You could be left with no way to collect.

So while a two-page construction contract may be easy to get the owner to sign, it may not be completely legal under Florida law. It certainly offers little or no protection should something go wrong. Unfortunately, most forms available on the Internet today do not cover the provisions required by Florida contract law.

Source by Gary Moselle

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