TALLAHASSEE – A new regulation passed earlier this month puts the devil in the details for many Florida contractors.
House Bill 535 went into effect July 1 and states that all Class II contractors in Florida – including roofers, plumbers and HVAC technicians among others – must include information about the Florida Homeowners Construction Recovery Fund in their service agreements for projects costing more than $2,500. If the notice is not included in documentation, contractors could face fines of $1,000 on the first offense and $500 for subsequent offenses.
Similar regulations had previously been in for Division I contractors, who are usually general contractors that take on a variety of projects. Division II contractors are more specialized.
Ryan Owen, an attorney at Florida law firm Adams and Reese, has represented contractors and said the penalties could add up quickly if the new regulation is strictly enforced.
“I’m not sure how vigorous the construction industry is going to be at enforcing it, but if there is an air conditioning contractor who has contracts to install 1,000 units at a residential complex, they couldn’t collect the full amount,” Owen told the Florida Record.
The cap for fines is set at $15,000 per Division II contractor. Division I contractors face a higher cap of $50,000. Claims paid do not include interest charges, attorney fees or other related expenses.
“The $15,000 cap is there so that one bad contractor can’t cost the fund more than the cap,” Owen said.
In addition to the penalties themselves, contractors who are fined have their licenses suspended until the amount charged is paid, which would limit revenue during that time.
The Florida Homeowners Construction Recovery Fund was established in 2005 to provide compensation to those who were victims of contractor mismanagement or misconduct.
In addition to the new requirements for Division II contractors, HB 535 also includes changes to building codes, alarm system requirements and fire safety regulations. Additional information on the Florida Homeowners Recovery Fund and the new bill can be found at myfloridalicense.com.