What to Do When Payments Are Delayed: Your Rights Under Florida Construction Law

In Florida, the construction industry is governed by a complex set of laws designed to protect the rights of contractors, subcontractors, and suppliers, particularly when it comes to payment for services rendered. One of the most important legal provisions in Florida’s construction law is the prompt payment requirement, which ensures that contractors and subcontractors are paid in a timely manner for the work they perform. In this blog post, we will explain the key prompt payment provisions in the Florida Statutes and how they affect contractors and subcontractors working in the state.

Understanding Florida’s Prompt Payment Statute

The Florida Prompt Payment Act (Section 218.70-218.79, Florida Statutes) was enacted to protect those working in the construction industry by setting clear timelines for payments and addressing late payment issues. This statute applies to both private and public construction projects in the state, though there are some differences in how it is applied depending on the type of project.

The Basics of Florida’s Prompt Payment Act

Under Florida law, contractors and subcontractors are entitled to receive payment within a specific period after submitting their invoices or requests for payment. The law is designed to help reduce the occurrence of late payments, which can have a significant impact on a contractor’s or subcontractor’s cash flow and overall business operations.

Payment to Contractors: For private projects, contractors are typically required to make payment to subcontractors within 14 days of receiving payment from the property owner. If payment is not made within that timeframe, interest may begin to accrue, adding an additional financial burden to the general contractor.

Payment to Subcontractors: Subcontractors, in turn, must also be paid within a specific period after submitting their invoices. Under Florida law, subcontractors are generally entitled to payment within 30 days after submitting an invoice, as long as the general contractor has been paid for the work performed.

However, subcontractors must be aware that the property owner or the general contractor may dispute certain aspects of the work completed, which could delay payment. In cases of dispute, it’s critical for subcontractors to track their work carefully and ensure proper documentation is maintained to support their claims.

Late Payment and Interest: Florida law provides a mechanism for late payments, including the possibility of charging interest. If payment is not made within the prescribed timeframe, contractors and subcontractors are entitled to charge interest on the overdue amount. The interest rate is generally 1.5% per month (18% annually), which can significantly increase the total amount owed if payments are delayed.

Payment Deadlines for Public Projects: For public construction projects, the timelines for payment are also clearly defined in Florida Statutes. Generally, payment is due within 30 days of the completion of work or receipt of a proper invoice. The law also dictates that contractors, subcontractors, and suppliers can file a claim for payment if they are not compensated within the statutory period.

Importance of a Written Contract

To ensure compliance with Florida’s prompt payment statutes, it’s crucial for contractors, subcontractors, and property owners to have clear and concise written contracts in place. The contract should detail the payment terms, including deadlines, the procedure for submitting invoices, and the interest rates on late payments. Having a well-drafted agreement will make it easier to enforce prompt payment provisions and avoid disputes.

What to Do If You’re Not Paid on Time

If a contractor or subcontractor is not paid on time, there are several steps they can take to enforce their rights under Florida’s prompt payment statute:

Send a Written Notice: The first step is to send a formal written notice to the party responsible for payment, requesting payment within the stipulated timeframe. This notice should outline the amount owed, the due date, and any applicable interest charges for late payment. A well-drafted notice serves as a reminder and establishes a formal record of the debt.

File a Construction Lien: If payment is still not received after the notice, a contractor or subcontractor may file a construction lien against the property. Florida law allows contractors and subcontractors to file a lien for unpaid work, which can force the property owner to pay the amount owed in order to clear the lien. It’s important to note that there are strict deadlines for filing a lien, typically within 90 days after the last work or materials were provided.

Litigation: If the lien is unsuccessful or if the contractor or subcontractor prefers not to file a lien, they can pursue litigation to recover the amount owed. Litigation can be a costly and time-consuming process, so it’s typically a last resort after other methods of resolving the payment dispute have been exhausted.

Mediation or Arbitration: In some cases, a contractor or subcontractor may opt for mediation or arbitration as a way to resolve the dispute without going to court. These alternative dispute resolution methods can be faster and more cost-effective than traditional litigation.

Final Thoughts: Protecting Your Rights Under Florida’s Prompt Payment Law

Florida’s Prompt Payment Act is designed to ensure that contractors and subcontractors are paid fairly and on time for their hard work. By understanding the legal framework for prompt payment, maintaining proper documentation, and including clear payment terms in contracts, contractors and subcontractors can better protect themselves from late payment issues. However, if payment disputes arise, it’s important to act quickly and assert your rights through formal written notices, liens, or litigation.

At DuFault Law, we specialize in construction law and can help contractors and subcontractors navigate Florida’s complex construction payment laws. If you are facing a late payment issue, or need help enforcing your rights, contact us for a consultation today.

Protect Your Business from Late Payments

Late payments can have a serious impact on your construction projects and business. Florida offers legal protections for contractors, and at DuFault Law, we can help you enforce your rights and avoid financial setbacks.

Don’t let delayed payments disrupt your work—contact us today at (239) 422-6400 or email us at contact@dufaultlaw.com to schedule a consultation and ensure you’re legally protected.