Construction Contracts: What to Keep in Mind as a FL Contractor

It’s good to always be on top of your construction contracts as a holder of a contractor’s license in Florida. You might just want to assume everything will go well. However, a lot of things can go awry when you begin a brand new project. You have to take the time to go through your contract for any flaws or errors. When you do so, you are saving yourself a whole lot of time and effort on legal problems.

Florida Construction Contracts


Check that the contract has a workable and feasible timeline for both yourself and your customer. On the one hand, customers (property owners, recipient of construction services) probably have stringent deadlines in mind. The customers may have other scheduled tasks that are contingent on your project finishing on time. Maybe a homeowner wants you to finish an addition to their property before they can put it up for sale. On the other hand, you as a FL contractor’s license holder need to say yes to a timeline only if it is doable. Do not over-commit or under-commit.


Before commencing the project, have an agreed price for services that will be rendered by the contractor. Make sure that all details are in the contract. Also, specifications must be made on the pricing scheme. Would the payment be done in lump sum? Through rate per unit? Or is there a more applicable pricing method you have in mind?

Terms of Payment

The contract must indicate if you would like to receive monthly payments or a lump sum. If you are receiving monthly payments, check that the payment amounts and dates are realistic. Remember that customers can ask for penalties upon late completion of certain tasks for particular timelines.

Protection Via the Construction Lien Law

According to Floridian law, specific kinds of residential contracts must have a lien law notice that is patently visible. If you are working on a project that is more than $2,500 and is connected to real property improvements, then the contract must have a lien notice. It basically highlights if the Florida contractor’s license holder is unable to pay its material suppliers, subcontractors, or sub-subcontractors, then they can legally file a lien on the property. What this means is that the property can be sold, even against the client’s will, to ensure that all (including you as the holder of a general contractor license) are paid for labor, materials, and services. Some clients would include a stipulation in the contract to protect themselves from the lien law in Florida, but consulting with an attorney would be the first and best approach to this provision.

Disclosure of a Recovery Fund

A lot of construction contracts that have a lien notice typically also include a disclosure of a recovery fund. This must be obvious in the contract. The disclosure indicates the right of the client to get compensation whenever the holder of a contractor’s license in Florida indulges in unlawful actions that incurred losses.

License Number

Florida statute requires the contract to have a Florida contractor’s license number, recovery fund disclosure, and lien notice. All of these must be visibly clear in the construction contract, if needed, before they are signed. A violation could turn into a fine.

Termination and Disputes

The contract should also have particular ways in which the FL contractor license holder and the client can solve problems and disputes. For example, an arbitration clause can be included so that court disputes can be avoided. There can be dissolution of contracts if there is a breach by either party of the contract. Note that contract mistakes can bring about termination, so double check that all the data is correct. A lawyer that is qualified can make sure that the terms of the construction contract benefit both parties.

Contractors Reporting Services ensures that a Florida contractor license requirements needs are met. Located in Tampa, Florida, the company makes sure that all the proper reporting are being done so that FL contractor’s license holders can just focus on the important details of their business.