How Much Should You Pay a Contractor Up Front in Florida?

Deposits are where many renovation disputes begin. Pay too little and a good contractor may not be able to schedule your job or order materials. Pay too much, too early, and you carry the risk if the contractor runs into trouble or moves on before finishing. Florida law gives homeowners a specific protection here.

What Florida law says

Florida doesn't set a maximum deposit for home remodeling. Instead, section 489.126 of the Florida Statutes protects you once a contractor takes a larger payment. If a contractor receives, as an initial payment, more than 10% of the contract price for work on a residential property, the contractor must:

1. apply for the necessary permits within 30 days after the payment (unless the work needs no permit), and
2. start the work within 90 days after all necessary permits are issued,

unless you agree in writing to a longer period or the contractor has just cause for the delay.

The statute also has penalties for contractors who take money and don't perform, and a homeowner's written demand starts an important 30-day clock. If you've paid and nothing is happening, see the steps at the end of this guide.

A sensible deposit

Because the law's deadlines start above 10%, an initial payment of around 10% of the contract price is a reasonable starting point for many projects, especially if your start date is weeks or months away. Before you pay:

• sign a written contract with the scope, price, payment schedule and expected start date
• make sure the contract shows the deposit counting toward the price
• ask what happens to the deposit if the start date moves or you need to cancel

Special-order products

Some Florida projects depend on items made to order: impact windows and doors, roofing tile, custom cabinets, louvered pergolas. A contractor may reasonably ask for a larger payment when that order is placed. If so, tie it to the order: ask for the order confirmation and expected delivery date, and remember the 30-day permit and 90-day start deadlines apply once the deposit exceeds 10%.

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Progress payments

After the start, money should follow completed work. A typical schedule ties payments to milestones you can see, for example:

• dry-in or rough inspections passed
• cabinets installed, windows installed or roof covering complete
• final inspection passed and punch list complete

Avoid paying far ahead of the work, and never pay the full price before the job is done.

Lien releases: the Florida-specific step

Under Florida's construction lien law, subcontractors and suppliers who aren't paid can file a lien against your home even if you paid your contractor. When you receive a Notice to Owner from a sub or supplier, ask for a lien release from them each time you pay the contractor for work they were part of, and get the contractor's final payment affidavit before the last payment. See Florida's construction lien law.

Keep a record of every payment

Whatever payment method you use, get a dated receipt or invoice for every payment showing the amount, what it's for and the contract it belongs to. Keep them with your contract, change orders, lien releases and permit records. A traceable payment method is the easiest way to keep that record.

If work never starts

1. Check the contract dates and whether you agreed in writing to any delay.
2. Send a written demand by certified mail asking the contractor to apply for permits, start work or refund the deposit.
3. Keep copies of everything, including texts and emails.
4. If there's no response within 30 days, contact DBPR, consider a police report where money was taken without performance, and talk to an attorney about your options. If the contractor was licensed, the Homeowners' Construction Recovery Fund may help after you've pursued the contractor.

For what belongs in the contract itself, use our renovation contract checklist, and build a cushion into your budget with a renovation contingency.