The Florida Homeowners’ Recovery Fund is a statutory provision found in Sections 489.140-489.144 designed help to provide financial relief for homeowners who have “suffered damages by the financial mismanagement of a licensed contractor or construction company.” It is important for both homeowners and contractors to understand the process, as well as the benefits and detriments associated with claims made and paid through this Fund. Below is a brief summary of the Fund qualification requirements, payment caps, and adverse effects on professional licensures:
To qualify, the homeowner must have “suffered monetary damages as a result of certain violations by licensed contractors” and have been awarded a final judgment by a court of competent jurisdiction, or awarded restitution by the Florida Construction Industry Licensing Board, or received an award following binding arbitration, after the homeowner has exhausted all reasonable avenues to otherwise collect. Regardless of how procured, the award must be based on acts set forth in Florida Statute 489.129(1)(g), (j), or (k), or qualify under Florida Statute 713.35. It must further articulate with specificity the actual damages associated with the violation(s). Applications to the Fund must be made to the FCILB within a year of the award.
The award must be based on: a) failing to remove construction liens following satisfaction of such liens, and/or b) abandoning the project when the total value of the completed work is less than the total amount paid to the contractor, and/or c) the costs exceeded the contract price at no fault of the homeowner, and/or d) abandonment of the project without cause or notice, and/or issuing a fraudulent lien of issuing fraudulent statements regarding the existence of bonding or applicable insurance. The project must be related to a “residence,” which is defined as “single-family residence… in which the owner contracting for the improvement is residing or will reside 6 months or more each calendar year…”
Recovery under the Fund is capped at an amount equal to the judgment, award, or restitution order or $25,000, whichever is less, or an amount equal to the unsatisfied portion of such person’s judgment, award, or restitution order, but only to the extent and amount of actual damages suffered by the claimant, and only up to the maximum payment allowed for each respective Division I and Division II claim. Division I Categories include General, Building and Residential Contractors. Division II Contractors are trade contractors, including, but not limited to: roofing contractors, plumbing contractors, mechanical contractors, pool contractors, solar contractors, and underground utility contractors. Beginning January 1, 2005, for each Division I contract entered into after July 1, 2004, payment from the recovery fund is subject to a $50,000 maximum payment for each Division I claim. Beginning January 1, 2017, for each Division II contract entered into on or after July 1, 2016, payment from the recovery fund is subject to a $15,000 maximum payment for each Division II claim. There is an aggregate cap per contractor license for Division I licenses of $500,000 and Division II licenses of $150,000, subject to the same dates of exclusion.
All payments distributed to homeowners through the Fund against a particular contractor’s license will cause that license to go into automatic suspension until such time as that contractor reimburses the Fund for such payments AND accrued interest.
Both Division I and Division II contractors must conspicuously insert the Florida Homeowner Construction Recovery Fund Notice language into their residential construction contracts:
SECTION 489.1425, FLORIDA STATUTES: FLORIDA HOMEOWNERS’ CONSTRUCTION RECOVERY FUND – PAYMENT, UP TO A LIMITED AMOUNT, MAY BE AVAILABLE FROM THE FLORIDA HOMEOWNERS’ CONSTRUCTION RECOVERY FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE LOSS RESULTED FROM SPECIFIC 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: CONSTRUCTION INDUSTRY LICENSING BOARD, 2601 BLAIR STONE ROAD, TALLAHASSEE, FLORIDA 32399; PHONE (850)487-1395.
Failure to include this language can result in a fine to the contractor by the Florida Department of Business and Professional Regulation. Learn why you should choose Magaziner Law.
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