Florida Residential Rebuilding Construction Contract
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FAQ
The exact deposit amount contractors ask for upfront varies and is especially dependent on the size of the project. For relatively small jobs, like a $16,000 bathroom remodel, contractors may ask for a 50% deposit. For large jobs, like a $100,000 full-home renovation, a 10%?20% deposit is more typical.
Never pay the full amount of a repair up front and hesitate before providing large deposits. Florida law requires a contractor to apply for a permit within 30 days and start work within 90 days if he collects more than 10 percent of the contract up front.
Most general contractors are looking at about a 35% margin, so they need a markup of 54%, or 1.54. Subs can often get a profit margin of 50%, so they need a markup of 100% or 2x, as shown in the table on the right. For some contractors, they have 35% gross profit and 25% goes to overhead and 10% is left in the company.
This can be a criminal offense, as Florida statue 489.126 states that if a contractor takes more than 10% down, the permit must be pulled within 30 days and the job must be started within 90 days. If the job does not require any materials, there is no need for a deposit.
For example, in Florida, the following types of contracts that might involve construction projects must be in writing: Credit agreements (i.e. construction loan financing); Contracts that cannot be performed within one year (such as major construction projects);
State of Florida Prompt Pay Policy (The State of Florida is required to pay all properly completed and correctly addressed invoices within 40 days of receipt of invoice for goods or services received.)
Generally, all construction contracts in Florida must contain are required to disclose the contractor or subcontractor's registration number issued by the Florida DPBR; if required. Furthermore, all construction contracts should also include a construction defect notice and opportunity to cure provisions.
On Thursday, April 13, 2023, Florida Governor Ron DeSantis signed Senate Bill 360 into law. This legislation alters the time period for bringing forward construction defect lawsuits, as well as modifies the current private right of action against a contractor for violation of the Florida Building Code.