RESIDENTIAL CONTRACTOR DISPUTES
DID YOU HAVE WORK PERFORMED BY AN UNLICENSED CONTRACTOR?
MY CONTRACTOR BREACHED OUR AGREEMENT. WHAT CAN I DO?
It is well known that all contractors must be licensed in the state of Florida to legally perform construction at your property. This includes roofers, general contractors, air conditioning contractors, mechanical contractors, plumbing contractors, residential pool contractors, etc. Florida law places the responsibility on the homeowner to verify whether a contractor is properly licensed. However, if you hired an unlicensed contractor who failed to perform under a residential contract, your only remedy is a lawsuit in civil court. Unfortunately, the Construction Industry Licensing Board and Department of Business and Professional Regulation will not assist with any financial losses caused by an unlicensed contractor. A common indicator that your contractor may not be licensed is if they insist on performing the work without a permit since building permits can only be obtained by licensed contractors or qualifying agents. If your contractor represented that they were licensed, but they were not, he/she could be guilty of a first degree misdemeanor if it was a first offense, or a third degree felony if previously found guilty of the violation and subject to fines. It is also important to note that Florida law prohibits unlicensed contractors from enforcing contracts for work that could only be performed by a licensed contractor.
Residential contractor disputes are incredibly common in Florida. Most cases involve a scenario in which the contractor took a significant down payment, or continued to request additional money from a homeowner, but failed to complete the contracted-for work. The contractor continuously gives the run-around to their customer, causing significant delays and anxiety to homeowners who are left without receiving the benefit of what they bargained for. Florida law requires that a contractor who receives a down payment totaling more than 10 percent of the contract price for repair, restoration, improvement, or construction to residential property, apply for permits necessary to do the work within 30 days after the date payment is made, except where the work does not require a permit pursuant to local codes and ordinances. The work must begin within 90 days after the date that all necessary permits are issued, unless the contractor has just cause for failing to apply for the permits, start the work or refund the payment or unless the person who made the payment agreed in writing to a longer period. A contractor who received money for repair, restoration, addition, improvement or construction of residential real property in excess of the value of the work performed, may not fail or refuse to perform any work for any 90-day period, or any period that is mutually agreed upon in the contract. If the contractor fails to comply, you must send a written demand letter to the contractor and allow 30 days for the contractor to cure any breaches. If the contractor fails to cure the breach within 30 days, legal action is necessary.
Is it important to save all communications you have with a contractor who is causing delays. Save your text messages, emails, and any written communications so that you document your efforts to gain the contractor's compliance.
HOW CAN I GET COMPENSATED IF MY CONTRACTOR STOPPED WORKING OR ENGAGED IN MISCONDUCT?
Did you know that in 1993, Florida created a fund to compensate certain claimants when a contractor has engaged in improper conduct on the claimant's residence? The fund is available to claimants who contracted for the construction or improvement of a residence located within Florida and who obtain a final judgment in any court of competent jurisdiction, or is awarded restitution by the Construction Industry Licensing Board, or receives an award in arbitration against a licensee, on grounds of financial mismanagement or misconduct, abandoning a construction project, or making a false statement with respect to a project, arising directly out of any transaction when the contractor was licensed and engaged in any of the activities enumerated under s. 489.129(1)(g), (j) or (k), on the homeowner’s residence.
The fund applies to general, residential, and building contractor licensees (Division I Contractors). It also applies to sheet metal, roofing, air conditioning, mechanical, pool and spa, plumbing, underground utility and excavation, solar, pollutant storage systems, and specialty contractors (Division II Contractors), but only if the contract was entered into after July 1, 2016.
There are three ways to access the fund: 1) obtaining a final judgment against a contractor in a civil proceeding that is based upon a specific violation of the licensing law or the lien law; 2) obtaining an arbitration award (which is typically confirmed and becomes a final judgment) against a contractor that is based upon a specific violation of the licensing law or the lien law; or 3) obtaining an order of restitution from the CILB through the disciplinary administrative process that is based upon a specific violation of the licensing law.
You may be wondering how much you would be entitled to from the fund. For contracts entered into after July 1, 2016, claimants may only recover the amount equal to the judgment, award, restitution order, or $25,000, whichever is less, or an amount equal to the unsatisfied portion of the judgment, award, or restitution order, but only to the amount of actual damages, and only to the maximum of $25,000 for Division I contractors, and $15,000 for Division II contractors. Fund payments cannot exceed the total aggregate for each contractor, and the total aggregate Division I payout is $500,000, and Division II claims for contracts entered into after July 1, 2016, are limited to $150,000.
WHAT CAN I RECOVER UNDER THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT (FDUTPA) OR FLORIDA STATUTE § 501.201?
It would seem sensical to believe that your right to recovery under FDUTPA, especially when a finance agreement is involved, would include the amounts of any down-payments, payments on the loan, interest or balance of the loan. If no financing is involved, you may believe that you are entitled to a full refund of the service or product at issue. However, Florida law does not provide for the recovery of consequential damages when a FDUTPA claim is brought. Instead, the law provides that an injured party is only entitled to actual damages, which would be the difference in the market value of the product or service in the condition in which it was delivered and the condition in which it should have been delivered. As a result, the court needs evidence of the market value of the service or product when delivered and the value of the service or product if there was no issue. Additionally, you cannot seek recovery of damage to a property other than the one that is the subject of the transaction. For example, if you contracted to purchase a brand new AC unit, but instead were fraudulently sold a used AC unit, under FDUTPA, you would not be able to seek damages caused to your floors by the used AC unit (that would be considered consequential damages). You also would not be entitled to a full refund of the cost of the AC unit (also considered consequential damages under the statute). Instead, you would only be entitled to recovery of the difference in the market value of the used AC unit and the value of a brand new unit of like kind and quality. This does not mean that you would not have other avenues of recourse, such as a breach of contract or negligence claim. The FDUTPA statute is meant to provide supplemental recourse in addition to any other recourse that you would be entitled to. The only instance in which you would be entitled to a refund of the purchase price of the product would be if the product was deemed valueless due to a defect. It is also worth noting that many clients are interested in seeking pain and suffering due to the stress that a FDUTPA violator's conduct causes them. This is simply not an avenue that is recoverable under the FDUTPA statute and Florida law is very clear that damages for pain and suffering are available in specific circumstances in which there is an injury.