The Florida Homeowners’ Construction Recovery Fund was created under Chapter 489, Florida Statutes as a separate account in the Professional Regulation Trust Fund. The recovery fund is funded pursuant to s. 468.631. Its purpose is to provide relief for Florida homeowners who have been harmed by Florida licensed contractors. For more information on the creation and operation of the Recovery Fund, please see my blog post of September 2014. This post will discuss recent legislative changes to the Recovery Fund which expands homeowner recovery to Division II contractors.
Governor Rick Scott recently signed House Bill 535, which includes important updates to sections s. 489.1401-143, Florida Statutes, permitting payments to injured residential consumers from the Florida Homeowners Recovery Fund for both Division I and Division II scopes of work. Effective July 1, 2016, all licensed contractors, both Division I and Division II, must ensure that the Florida Homeowner Construction Recovery Fund Notice is contained in their residential construction contracts. Each agreement or contract for repair, restoration, improvement, or construction to residential real property must contain a written statement explaining the consumer’s rights under the Recovery Fund.
Division II contractors include licensed holdings in the following trades: Sheet Metal; Roofing; Class A Air-Conditioning; Class B Air-Conditioning; Class C Air-Conditioning; Mechanical; Commercial Pool/Spa; Residential Pool/Spa; Swimming Pool/Spa Servicing; Plumbing; Underground Utility and Excavation; Solar; and Pollutant Storage Systems. This warning does not apply when the value of all labor and materials does not exceed $2,500. The maximum recover for Division II contractors is $15,000 per claim and must be based on contracts entered after July 1, 2016. Division II claims may be considered beginning January 1, 2017. There is an aggregate cap for Division II claims in the amount of $150,000.00 per licensee.
All Division II contractors should immediately change their residential construction agreements to include the statutorily required language. The language is below:
FLORIDA HOMEOWNER’S CONSTRUCTION
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 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:
Construction Industry Licensing Board
2601 Blairstone Road
Tallahassee, Florida 32399-1039
Failure to include the required warning language can result in discipline on the Division II license. On the first violation of failure to include this language, the CILB may fine the contractor up to $500, and the moneys will be deposited into the Recovery Fund. On a second or subsequent violation, the CILB shall fine the contractor $1,000 per violation, and the moneys will be deposited into the Recovery Fund. §489.1425(2), Fla. Stat. (2016).