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Contractors Could Face Criminal Charges Under New Florida Law

The Florida Senate passed a new bill that took effect on July 1 which could have serious ramifications for contractors. The new bill, House Bill 7125, substantially altered Florida Statute 489.126 in order to afford homeowners more protection against contractor fraud by making it easier for a homeowner to press criminal charges.

The statute provides that once a consumer makes a payment in excess of 10 percent of the contract price for any residential construction, the contractor must first apply for the necessary permits within 30 days and then begin the work 90 days after the permits issue. In the event the contractor fails to apply for the necessary permits or begin the work, pursuant to the revised statute, a homeowner can make a written demand on the contractor and require that the contractor either: (1) applies for the necessary permits, (2) starts the work, or (3) refunds the payment.

Florida-legislature-300x169The amended statute also provides that a contractor who receives money in excess of the value of the work performed may not fail or refuse to perform any work within a 90-day period or any period mutually agreed upon and specified in the contract. If the contractor doesn’t have just cause for failing to perform any of the work within the 90-day period or specified contractual period, or the contractor doesn’t terminate the contract with proper written notice to the owner, then the owner can likewise make a written demand to the contractor demanding either that (1) the work be performed, or (2) the money be returned.

Further, the new law also allows the court to infer that the contractor didn’t have just cause for failing to comply with the enumerated requirements if the contractor fails to comply with the homeowner’s written demand within 30 days of receiving it.  Under the revised law, failure to comply constitutes a violation for which the homeowner may press criminal charges.

Most significantly, the changes allow a judge to easily ascertain intent on the contractor’s behalf.  Intent to defraud is not required to exist at the time of the monetary exchange between the owner and the contractor.  Instead, under the new modifications, intent can be proven when the contractor spends the money for personal use or can be inferred where the contractor fails to refund any portion of the money owed within 30 days of receiving a written demand for such money from the owner. Even more detrimental, the new statute prohibits a contractor from asserting a defense on the basis that they intended to return the money owed.

Violators can be convicted for a misdemeanor if the total money received is less than $1,000, but any money received in excess of or equal to $1,000 can result in a felony conviction. Due to the severity of the consequences, it is vital that contractors are made aware of the new changes and strictly adhere to the requirements to avoid criminal liability.