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Properly complying with Florida’s workers’ compensation regulations is crucial for construction contractors aiming to protect their workforce and avoid costly construction litigation. Understanding these requirements not only protects your employees but also shields your business from potential legal and financial repercussions.​

What Coverages Are Required in Florida?

In Florida, any employer engaged in the construction industry and employing one or more individuals must secure workers’ compensation insurance. This mandate extends to corporate officers, limited liability company (LLC) members, sole proprietors, partners, and independent contractors, all of whom are considered employees under the state’s workers’ compensation law. However, corporate officers or LLC members may apply for an exemption if they own at least 10% of the company. ​

Contractors must ensure that all subcontractors possess the necessary workers’ compensation coverage before commencing any project. If a subcontractor lacks this coverage, the responsibility for any work-related injuries falls on the primary contractor. Therefore, obtaining proof of insurance or valid exemptions from subcontractors is essential to mitigate potential liabilities. ​

What Are the Potential Penalties for Non-Compliance?

Failure to comply with Florida’s workers’ compensation requirements can lead to severe penalties. This includes Stop-Work Orders (SWOs) and expensive fines.

The Division of Workers’ Compensation can issue an SWO to any employer without the required coverage, compelling the cessation of all business operations. Such orders may also be issued if an employer understates payroll, conceals employee duties, or fails to produce requested business records within ten business days. ​

Employers without proper coverage may also face fines amounting to twice the insurance premiums that should have been paid over the past two years or a minimum of $1,000, whichever is greater. Additionally, a $5,000 fee is imposed for each worker misclassified as an independent contractor. ​

Operating without the mandated insurance can result in criminal charges, including potential jail time, depending on the severity of the violation and the state’s enforcement policies. ​

Are There Special Requirements for Out-of-State Contractors Working in Florida?

Out-of-state contractors aiming to work in Florida must adhere to specific guidelines to ensure compliance, as well. It’s important to make sure you understand the legal requirements in the state you’re working in. Those requirements in Florida include:

• Notice Requirements: Contractors should promptly inform their insurance provider or agent about their intent to undertake projects in Florida. ​
• Insurance Coverage: Such contractors must either obtain a Florida workers’ compensation policy or add an endorsement to their existing policy that explicitly includes Florida in Section 3.A. of the policy. ​
• Extraterritorial Reciprocity: Some states have reciprocity agreements with Florida, allowing contractors to operate temporarily under their home state’s workers’ compensation policy. However, this is limited to work not exceeding 10 consecutive days or 25 days within a calendar year. ​

Stay in Compliance and Keep Your Florida Construction Project Moving ForwardEnsuring adherence to Florida’s workers’ compensation laws is vital for the seamless progression of your construction projects. At Florida Construction Law Group, we’re committed to helping construction crews and contractors handle legal compliance matters to keep jobs on task and on time. Contact Florida Construction Law Group to make sure your compliance needs are met.

Florida construction projects help build our communities and our homes, but they often encounter delays, whether due to unforeseen site conditions, supply chain disruptions, or regulatory hurdles. To mitigate financial risks, many property owners and developers include “no damage for delay” clauses in their contracts.

While these provisions can limit financial liability, they also pose challenges for contractors facing unexpected losses. Understanding how these clauses work and when they might be unenforceable is critical for anyone involved in Florida’s construction industry.

What is a No Damage for Delay Clause?

A “no damage for delay” clause is a contract term that restricts contractors from seeking compensation for financial losses caused by project delays. Instead of monetary damages, contractors are typically limited to time extensions for completing their work. Property owners and developers prefer these clauses because they shift the risk of delays onto contractors, ensuring that unexpected disruptions do not lead to increased costs for the owner.

While enforceable in Florida, these clauses must be clearly drafted to withstand legal scrutiny. Courts will examine whether the contract specifically defines the types of delays covered, as well as the circumstances under which exceptions apply. Contractors who agree to these provisions should carefully evaluate their potential impact before signing a contract.

When is a No Damage for Delay Clause Enforceable in Florida?

Florida courts recognize the validity of “no damage for delay” clauses, but enforcement is not automatic. Judges consider several factors when determining whether a clause should be upheld, including:

• The clarity and specificity of the contract language regarding covered delays
• The nature of the delay and its overall effect on project completion
• Whether the delay was foreseeable and could have been reasonably anticipated by both parties

If a contract explicitly states that the clause covers certain delays, courts are likely to enforce it. However, contractors should be aware that exceptions exist. For example, if a delay results from misconduct, fraud, or intentional interference by the property owner, a contractor may have grounds to challenge the clause.

A case in Florida, Sarasota County v. Southern Underground Industries, Inc., illustrates how courts evaluate these provisions. In this case, a contractor successfully argued that the county’s suspension of work—despite no legitimate safety concerns—amounted to active interference. The court ruled in favor of the contractor, awarding substantial damages despite the presence of a “no damage for delay” clause in the contract.

Who Benefits From a No Damage for Delay Clause?

The primary beneficiaries of “no damage for delay” clauses are property owners and developers. By limiting financial liability for delays, these clauses help owners control costs and prevent contractors from filing claims for unforeseen project disruptions. This can be particularly advantageous in large-scale developments where delays can translate into significant financial exposure.

For general contractors and subcontractors, however, these clauses present financial risks. When delays occur due to factors beyond their control—such as project mismanagement, withheld information, or regulatory delays—contractors may face increased labor and material costs without the ability to recover losses. Negotiating contract terms to include specific exceptions or alternative compensation provisions can help mitigate these risks.

Solidify and Uphold Your Florida Construction Contracts

Florida construction agreements should protect all parties involved while ensuring projects stay on track and avoid costly construction litigation. Contractors and developers alike need well-drafted contracts that clearly define rights and responsibilities. If you are drafting, negotiating, or disputing a “no damage for delay” clause, legal guidance is essential. Contact Florida Construction Law Group to discuss protecting your interests and ensure your contracts align with Florida law.

Florida construction contracts form the backbone of every project, laying out the terms and expectations that guide the work from start to finish. These agreements are critical to ensuring the smooth operation of a project and protecting the interests of all parties involved.

Before shovels break ground, it’s important to consider every clause in the contract, including potential provisions and exceptions regarding consequential damages. Sometimes referred to as special damages, consequential damages can have significant financial implications. While they are occasionally waived during negotiations, their inclusion or exclusion must align with the project’s unique needs.

What Are Consequential Damages in Florida Construction Projects?

Consequential damages refer to financial losses that occur indirectly due to another party failing to meet their obligations. In construction, these damages often arise when a party’s breach of contract causes ripple effects beyond the immediate scope of the breach. For example, if a contractor delays work on a project, the property owner may suffer additional losses unrelated to the actual construction.

Common examples include loss of use, such as when a property remains unusable due to incomplete work, or increased material costs caused by a supplier’s failure to deliver on time. Extended equipment rental fees can also fall under consequential damages if delays require the owner or contractor to keep rented machinery for longer than anticipated. These damages must be reasonably linked to the breach to be valid under Florida law. Understanding how they apply to your project can help you determine whether their waiver is appropriate.

When It Makes Sense to Waive Consequential Damages

Waiving consequential damages in a construction contract may be a useful negotiation tool and decision for certain projects. Contractors often seek this waiver to limit their liability and ensure their financial exposure doesn’t exceed what’s directly tied to the project. Similarly, property owners may agree to such waivers to expedite contract negotiations and avoid potential construction litigation down the line. A mutual waiver ensures both sides share equal protection, fostering a fairer agreement overall.

When You Shouldn’t Waive Consequential Damages

There are situations where waiving consequential damages could leave a party vulnerable, however. Property owners, for example, may hesitate to waive these damages if delays or failures by the contractor could cause significant indirect losses. Contractors should also proceed cautiously if the waiver is not mutual, as this could leave them exposed to claims without reciprocal protection—meaning they could end up losing money on a project. Construction work where it’s hard to determine the exact materials needed or exact timelines related to the project and supply chain matters may still need these damages included in the contract.

Without a waiver, these could result in litigation or necessitate alternative dispute resolution in the future.

Florida Construction Contract Drafting and Support

Every construction project is unique, and so are the contracts tied to them. Thoughtfully addressing consequential damages in your agreement can help prevent disputes and protect your financial interests.Florida Construction Law Group offers experienced guidance for drafting, negotiating, and reviewing contracts to ensure they align with your needs. Whether you’re a contractor, property owner, or supplier in Florida, we’re here to help you navigate the process and protect your project. Contact our law firm to discuss your contract concerns and learn how we can support your construction goals.

Draw disputes with lenders can completely disrupt the flow and hard work of Florida construction projects, leading to costly delays and strained relationships. While many projects move forward without issues, it’s important to take proactive steps to minimize the risk of these disputes. Just because you’ve worked with this specific lender or crew before without any issues does not mean this project will go off without a hitch. Whether you’re handling construction loan agreements or addressing funding delays, understanding how to avoid conflicts can keep your project on track. Here’s what you need to know.

Know What You’re Getting Into

A solid foundation begins with a well-drafted construction loan agreement that aligns with the realities of your construction project. Contractors often feel the pressure to start a project quickly, but signing an agreement without thoroughly understanding its terms can lead to unexpected challenges. Before agreeing to a draw schedule, ensure it is realistic and fits the project’s timeline and cash flow needs.

Consulting with your team—including legal advisors or construction attorneys—can clarify any ambiguous terms and identify potential pitfalls built into the contract. Addressing these issues before signing can save you from unnecessary disputes later. A proactive review of the contract not only protects your interests and your finances but also sets the stage for smoother interactions with your lender.

Get Ahead of Disputes

Communication is the cornerstone of avoiding conflicts on Florida construction projects. Establishing open and frequent lines of communication with your lender ensures that everyone remains aligned throughout the project. Lenders, as stakeholders in your success, are often willing to discuss adjustments to the draw schedule when circumstances change. If you anticipate the need for modifications, address them promptly to maintain trust and avoid escalation.

In situations where your lender cannot meet your requests, exploring compromises can be an effective strategy. A willingness to adapt and collaborate often resolves potential disputes before they fully develop. Flexibility—paired with clear documentation of any agreements reached—can make a significant difference in keeping the project moving forward.

Speak With a Florida Construction Law Attorney

Construction projects come with inherent risks, and disputes over draw requests are not uncommon. Having a knowledgeable Florida construction attorney on your side can provide you with the guidance needed to navigate conflicts efficiently and amicably. Whether reviewing loan agreements, negotiating draw schedules, or addressing disputes, an experienced attorney ensures that your rights and interests are protected.At Florida Construction Law Group, we understand the challenges that come with construction financing and work diligently to help contractors and developers resolve disputes and avoid unnecessary delays. Contact our office today to schedule a consultation and learn how we can assist you with your specific situation.

Draw request disputes are a major challenge for general contractors. When a contractor secures a construction loan, they agree to a draw schedule that determines their progress payments. Disruptions to this draw schedule can be financially devastating, risking timely project completion and piling on costs from added interest, labor issues, remobilization fees, and even the possibility of losing funding entirely.

Staying ahead of these disputes is essential, and it starts by working with a qualified construction law attorney. If disputes arise, timely legal intervention is the best way to control the fallout and secure the funding necessary to keep the project moving. Florida Construction Law Group is here to help Florida construction projects stay on track by properly and efficiently resolving these disputes before they impact or terminate the project.

Costly Construction Delays and Higher Costs

A dispute over draw requests can lead to significant delays, jeopardizing a project’s timeline and increasing its costs. When a bank stalls on a draw, the contractor may face challenges completing milestones according to schedule. Meanwhile, interest continues to build on any loans associated with the project, increasing the overall expense.

Legal fees may also be necessary to resolve the issue, further driving up costs. These setbacks not only affect the general contractor but also disrupt the entire construction team and anyone else relying on the timely completion of the project. Addressing draw request disputes quickly is crucial to preventing these costly outcomes.

Disrupting the Pay and Work of Construction Contractors

Draw request disputes have a direct impact on the cash flow essential to pay construction workers and subcontractors. Without payment, these workers have little reason to continue working, leading them to lay down their tools until the funds are secured.

As a result, the dispute doesn’t just affect the contractor—it halts everyone’s productivity on the job site, stalls progress, and complicates an already tense situation. For projects to stay on track, contractors must ensure that all parties are compensated promptly, and addressing draw disputes is a vital part of this process.

Terminating the Project and Losing the Job

In severe cases, unresolved draw request disputes can bring an entire project to a standstill, forcing all parties involved to abandon their work. When payments stop indefinitely, the contractor and workers may be forced off the job, allowing either a new contractor to step in or, worse, the project to be left incomplete.

Not only does this outcome lead to job loss and income instability for the contractor and workers, but it also affects the project owners, who may have to begin the lengthy and costly process of finding a replacement. By addressing disputes as soon as they arise, contractors can avoid these worst-case scenarios and keep projects progressing toward completion.

Resolve Draw Request Disputes to Keep Your Florida Construction Project on TrackAt Florida Construction Law Group, we understand the challenges of draw request disputes and the disruptions they bring to construction projects. Our firm is equipped to guide contractors through these issues and help ensure that funding stays on track. Don’t let a draw request dispute jeopardize your project’s success—contact Florida Construction Law Group to discuss how we can help secure timely payments and protect your project’s future. Contact us today to keep your construction project moving forward.

Subcontractors play a critical role in the construction industry and in building our Florida communities. They work hard and put their bodies on the line to build the world around us, and they deserve to be properly paid for their work. Unfortunately, that doesn’t always go to plan.

That’s where the mechanics lien process in Florida comes into play. This is essential to ensuring subcontractors get paid for the hard work they put into every project. Without a clear understanding of how mechanics liens operate, subcontractors could face significant financial risks when payment disputes arise.

In Miami and throughout South Florida, knowing how to protect your rights and your paycheck through lien enforcement is an important part of doing business as a subcontractor.

Understanding Florida Mechanic Lien Laws

In Florida, mechanics lien laws are in place to ensure that subcontractors and suppliers get paid for the labor and materials they provide on a construction project. A mechanics lien gives subcontractors a legal claim to the property where the work was performed, which can be enforced if payment is not received. However, to benefit from these laws, subcontractors must follow strict procedures.

One of the most important elements of this conversation is timely filing. In Florida, subcontractors must file a lien within 90 days after completing their work. If you miss this window, the lien will be unenforceable, and you may lose your chance to claim payment. To ensure you meet all deadlines, subcontractors should maintain careful records of their work, including invoices, delivery receipts, and communications with general contractors and project owners. These records will be invaluable if a lien becomes necessary.

What Happens If You’re Not Paid as a Subcontractor

Payment disputes can occur for a variety of reasons, and when they do, subcontractors must respond promptly to protect their livelihood. If you are not paid for your work on a project, the first course of action is to contact a Florida construction law attorney to help you navigate the dispute process. In Miami and across South Florida, subcontractors often face delays in payment, and legal action may become necessary if these disputes are not resolved informally.

The first step is usually sending a formal demand letter to the party responsible for payment. This letter outlines the amount owed and warns that legal action, such as filing a mechanics lien, will follow if payment is not made promptly. Having an attorney draft and send this letter ensures it meets all legal requirements and deadlines.

Sometimes, disputes escalate due to claims of defective construction. If a general contractor or property owner claims that your work did not meet the required standards, it is essential to carefully review the terms of your contract and the project specifications. South Florida subcontractors should always document their work to defend against false or exaggerated claims.

Protect Your Work and Your Pay as a Florida Construction SubcontractorSubcontractors in South Florida need to take proactive and swift steps to protect their right to payment. Understanding mechanics lien laws and acting quickly in the event of a dispute can protect your financial interests. At Florida Construction Law Group, we’re here to help Miami subcontractors navigate various payment issues and enforce their rights to earn a living for the great work they do every day. If you’re facing a payment dispute or need assistance filing a mechanics lien, contact Florida Construction Law Group today to uphold your work.

Securing government construction contracts is an integral element of success for many Florida contractors, but the bid process isn’t always as smooth or fair as it should be (both morally and legally). Sometimes, companies that don’t meet the proper qualifications are awarded contracts, or there may be mistakes during the selection process.

When this happens, contractors have the right to file a bid protest, which can help ensure that the government follows the proper procedures and that qualified contractors have a fair chance at winning the work. We’ve seen rigged bids in the past, so it’s important to stand up and defend your right to help build Florida communities and important government infrastructure.

Why Bid Protests Happen

There are a variety of reasons why a contractor may choose to file a bid protest, including:

• Misleading qualifications submitted by the winning bidder.
• The winning bid is not the most qualified or the lowest-priced.
• The RFP contains incorrect information or doesn’t align with the actual project.
• Errors were made in evaluating the bids, either by mistake or intentionally.
• Bias or favoritism shown to a particular bidder.
• The awarded contractor is unresponsive or otherwise unfit for the project.

In any of these situations, it’s important to act quickly to challenge the bid and protect your company’s right to fair competition.

Understanding the Bid Protest Process

Bid protests can be filed both before and after the award of a contract, depending on the circumstances and when you discovered the improper bid. A pre-award protest occurs when there’s an issue with the Request for Proposal (RFP) or the bidding process itself, often before bids are opened. In contrast, a post-award protest takes place after the contract has been awarded, generally within 10 days of when the protesting contractor knew or should have known of the problem.

Navigating these strict timelines is essential, and the protest must be well-documented and supported by facts. That’s why working with an experienced construction law attorney is critical, as they can help ensure your protest is filed correctly and effectively.

Contact Florida Construction Law Group TodayIf you believe a government construction contract was awarded unfairly, you need an experienced legal team on your side. Florida Construction Law Group can help you manage the bid protest process on major projects, including government contracts, and protect your company’s rights. Contact our law firm today to discuss your case and ensure your business has the opportunity it deserves.

When construction disputes arise, it’s important to understand and consider all dispute resolution options on the table. That includes both mediation and arbitration, otherwise known as alternative dispute resolution (ADR), as options to resolve disputes with integrity and allow the important work you’re doing to move forward.

Both of these options can help avoid the costs, delays, and publicity of traditional litigation. But which is the better option for your situation? Understanding the differences can help you make the right choice.

Retaining Privacy and Control Through Construction Mediation

Mediation is a voluntary process where a neutral third party, the mediator, helps the disputing parties find a mutually agreeable solution. The mediator doesn’t impose a decision but facilitates communication to help both sides reach a settlement.

In construction disputes, mediation is often preferred when both parties want to maintain their relationship, keep things confidential, and control costs. The process is informal and non-binding, allowing parties to walk away if they can’t reach an agreement. This flexibility is particularly valuable in construction cases, where ongoing business relationships are often crucial.

The mediation process starts when both parties agree to hire a mediator and set a hearing date. They may provide documentation or evidence, but it’s not required. The mediator guides the negotiation, helping the parties explore solutions. If they reach an agreement, the mediator helps draft the settlement terms, which can then be formalized into a legally binding contract.

Mediation is typically faster, less formal, and less expensive than arbitration or litigation, and it keeps the details of the dispute and settlement confidential. For these reasons, mediation is often the better choice when both parties are open to negotiation and want to stay in control of the outcome.

Ensuring an End to Your Dispute Through Construction Arbitration

Arbitration is more formal and involves presenting the dispute to an arbitrator or panel of arbitrators, who make a binding decision. While arbitration shares some similarities with litigation—like presenting evidence and questioning witnesses—it’s usually faster and less costly than going to court.

One advantage of arbitration in construction disputes is that you can select an arbitrator with specific technical expertise, which can be crucial in complex cases requiring specialized knowledge.

The arbitration process begins with both parties agreeing to arbitrate. During the hearing, each side presents its case, evidence, and witnesses. After reviewing everything, the arbitrator issues a binding decision, enforceable in court, with very limited opportunities for appeal.

Arbitration is often the better option when negotiations have stalled, and a final, enforceable decision is needed. The finality of an arbitrator’s decision can bring closure to a long, drawn-out dispute.

Choosing Between Mediation and Arbitration

The choice between mediation and arbitration depends on your situation. Mediation is generally best when both parties want to keep things private, affordable, and within their control. Arbitration is better when months of negotiations have failed, and you need a decisive, enforceable outcome.

If you’re dealing with a construction dispute and need guidance, contact Florida Construction Law Group. Our experienced construction law attorneys can help you resolve your dispute efficiently and effectively while also ensuring contracts are well-drafted and strong enough to hold up to legal challenges.

Indemnity clauses in construction contracts require one party to cover losses or claims for another. It’s essentially a worst-case scenario clause, but it’s a reality that some Florida construction projects face and contracts must address.

However, sometimes, the law imposes this obligation even without a contract. As an indemnitee, ensuring you receive what you’re entitled to can be complex. It’s important to understand how to approach these complex issues and to ensure each party is given the best opportunity to adhere to the law and signed contracts.

Relying on Contract Language

The starting point for any indemnity claim is the contract itself. It should clearly define the scope and limits of indemnity. Your Florida construction contracts should answer most of the questions that arise during matters of indemnity.

For example, the contracts all parties signed should define what events can trigger the indemnity in the first place. Is there a limit on how much can be paid out? Your contract should also make it clear if the indemnity covers first-party losses, third-party claims, or both. 

When indemnity is imminent, questions must be answered such as whether there is a duty to defend as well as indemnify and who gets to select defense counsel for the case ahead.

Insurance Coverage for Indemnity Claims

Contracts often include both insurance and indemnity provisions. These can conflict, especially regarding the coverage of losses. In Florida construction contracts, for example, the owner might need to buy property or builder’s risk insurance, while contractors must have liability insurance. These policies often include waivers of subrogation, which can complicate the determination of which insurance applies and the extent of each party’s liability.

When a loss occurs, it’s crucial to determine which insurance policy applies. Courts often place the risk of loss solely on the insurance, barring subrogation claims against other insured parties. However, disputes can arise about the cause of the loss and whether it was due to external forces or contractor negligence. These disputes can lead to complex chains of indemnity claims among contractors, subcontractors, and their insurers.

Tendering a Claim

To protect indemnity rights, indemnitees must understand the requirements for tendering a claim. While most states only require notice, some require a formal tender to trigger an insurer’s duty to defend. Issues can get more complicated depending on the insurance policy terms, such as “other insurance” clauses, deductibles, and policy hierarchies.

Navigating the Legal Issues of Indemnity

Indemnitees should involve their indemnitors early in the defense and settlement discussions. This can prevent the loss of indemnity rights. Contracts can address control over the defense, allowing indemnitees to choose their own counsel. Additionally, when insurers issue a reservation of rights, indemnitees might retain control over the defense.These issues are inherently complex. A proactive approach to involving an experienced Florida construction law attorney in the early stages and contract drafting of any construction project in the Sunshine State is the best way to protect yourself. If you find yourself on either side of an indemnity matter, contact Florida Construction Law Group today.

We work with Florida construction workers and project managers every day and one of the biggest legal issues that come up is projects that fall off schedule or lack the necessary preparation for the job in the first place. This often disrupts change orders, payment schedules, and project goals.

Our team understands how crucial it is to head into a job with an effective and realistic schedule in place. Florida Construction Law Group regularly assists clients who are either facing or pursuing construction litigation related to off-schedule construction projects in Florida. Our goal is to help contractors, subcontractors, and project managers establish and manage construction project schedules effectively to avoid these legal issues.

What Should a Construction Project Schedule Cover?

A construction schedule is essential for defining every task and event in an upcoming project during the planning phase. It outlines all the resources required at each step and how to distribute them across teams throughout all stages of development—from conception to completion.

A comprehensive construction schedule should include:

• Scope of work
• Relevant deadlines
• Resource management and allocated assets
• All project deliverables
• Specific tasks that need completion (and those responsible for task oversight)
• Task durations
• Any existing task dependencies

Each of these elements plays a critical role and must be carefully tracked and updated throughout the course of the project lifecycle should changes be necessary.

What Does an Effective Schedule Mean for the Work?

An effective construction schedule organizes all the above elements to maintain project integrity and to set a comprehensive and realistic plan forward. Your schedule should be crafted to maximize the productivity of each contractor or subcontractor involved but not necessarily for the absolute fastest path to completion (often referred to as the Critical Path Method) unless that’s what the project calls for.

Construction scheduling is crucial as it enhances workflows, streamlines projects, and fosters better communication among all relevant stakeholders. It also allows for timely and sufficient procurement of materials that lends itself to ideal productivity to complete the project within the targeted timeline and budget.

Effective scheduling also improves resource planning, including the contractors and subcontractors, maximizes quality control measures, and gives team members proper notice to plan their work each day. Prioritizing work schedules to accommodate various conditions, such as weather-sensitive activities, is an element every project needs to rely on.

Choose the Right Schedule and Contracts for Florida ConstructionOur experience has shown us that construction projects can falter due to poor planning. The team at Florida Construction Law Group supports the Florida contractors and construction workers who are building our homes and communities. We are ready to help you draft effective schedules and contracts based on our extensive experience. Contact our team to ensure your next project’s success through effective planning.

Florida construction projects are the work that builds our communities. Whether you’re looking to build or renovate your home, a business, or other structure, it’s important to understand the financing options available to you before committing to any loan options.

When people seek out financing for a construction project, it’s often the first time they’ve ever heard the terms “single-close” or “multi-close” loans. Construction jobs generally require (at least) two loans or terms: a construction loan that funds the work over the time of the job and then a term that extends long-term like a 30-year mortgage. As you weigh your options, we want to help you understand what each of these options is so you are able to proceed with clarity and confidence.

What is a Single-Close Construction Loan?

A single-close construction loan is a process that streamlines securing construction financing into a single transaction. It consolidates the construction phase financing and the subsequent long-term mortgage into one comprehensive loan application and closing. Upon the completion of construction, the initial loan transitions into a traditional mortgage, hence the alternate names “all-in-one” or “construction-to-permanent” (CTP) loans.

The appeal of single-close loans lies in their simplicity and cost-effectiveness. Applicants face just one set of paperwork and one closing event, significantly cutting down on administrative burdens and closing costs. Moreover, the security of knowing your long-term mortgage’s terms and interest rates upfront eliminates the uncertainties that come with securing additional financing post-construction.

What is a Multi-Close Construction Loan?

In contrast, multi-close construction loans introduce a degree of flexibility to the construction loan process. This model necessitates obtaining two distinct loans: one for the construction phase and another for the long-term mortgage that refinances the initial loan upon project completion. The first loan covers construction costs, while the second, secured post-construction, transitions the financial commitment into a 15 or 30-year mortgage.

Opting for a multi-close loan opens up additional possibilities that could lower costs, but it comes at the expense of certainty. Although it involves more steps, with separate approvals and closings for each phase, this route can offer lower rates and more favorable terms for the long-term mortgage. It caters to those willing to take on the uncertainty of a second approval process while preparing for potential financial or project changes that could lead to better loan conditions down the line.

Proceed With CertaintyAt Florida Construction Law Group, we are ready to help the hard-working people of Florida through the construction loan process. We understand the weight of these financial decisions, and we are committed to guiding you toward the financing option that best suits your project’s needs and your financial situation. Contact our team to schedule a consultation and get started on the road toward making the most informed choice possible.

Handling change orders and preventing scope creep without legal complications is a balancing act for contractors and developers. While change orders are a normal part of construction projects, they can sometimes lead to disputes and additional costs. The process is meant to adjust the project as it moves forward, but it can lead to unexpected challenges without careful management. Understanding the legal framework and having clear protocols can significantly affect handling these changes.

Change Leads to Possible Disputes 

It’s not uncommon for the initial agreement to be modified in construction projects. These modifications, known as change orders, adjust the original scope of work, whether by adding or removing tasks. Florida law defines a change order as any modification authorized by the property owner that changes the originally agreed-upon labor, services, or materials. While contractors might see change orders as an opportunity to increase project value, they also acknowledge that these can extend the project timeline. 

Disputes often arise when there’s disagreement over whether a task is a change order or was included in the initial contract, whether the change was authorized, or if the cost of additional work was agreed upon. Including a ‘construction change directive’ in contracts allows owners to make unilateral order changes. This can sometimes make it hard to predict how changes affect project costs and timelines. A written agreement on extra work, signed by both parties, can also help clarify expectations. Identifying authorized individuals who can approve change orders on behalf of each party is crucial. This approach minimizes confusion and ensures that modifications are documented and agreed upon.

The Critical Path & Extensions 

Change orders potentially increase the project’s scope and affect the project’s completion timeline and costs. For a delay to be considered compensable, it must impact the project’s critical path. The critical path is the sequence of stages determining the minimum time needed to complete a project. However, not all delays will extend the project’s completion time. Understanding which delays affect the critical path and could lead to compensable claims. Additionally, change orders can extend the deadline, allowing a contractor to get a lien on the property. 

This extension is valid as long as the change order work was agreed upon in good faith and completed within a reasonable timeframe. The court uses the Aronson/Michnal test to determine if work counts as final furnishing, extending the time for filing a claim of lien. This test checks if the work was done in good faith, within a reasonable time, according to the contract, and was necessary for a complete job. The ‘punch list’ work, blending repair, and additional work under a change order illustrate how specific tasks can extend the lien filing period if authorized as change orders. Ensuring that change order work aligns with the contract and is completed promptly protects your ability to secure a lien, highlighting the importance of clear, mutual agreements on project changes.

Solidify Your Project With Florida Construction Law Group 

If you’re facing challenges with change orders or scope creep in your construction projects, seeking professional advice is essential. Consulting with an attorney experienced in construction law can help you understand your rights and obligations and ensure that your contracts are structured to manage these issues effectively. Schedule a consultation today to get the guidance you need to navigate these challenges successfully.

Encountering delays and budget overruns is a given. These are issues that can be mitigated as opposed to outright eliminated. Despite how common they are, don’t overlook the importance of developing pre-emptive ways to limit their impact on your project’s timelines and finances. Indirectly, this will also safeguard your relationships with your clients. The secret to overcoming them lies in adopting a proactive stance and being equipped to address arising issues promptly. This approach is pivotal in steering construction projects toward successful completion.

Be Proactive with Construction Delays

The initial step in confronting project delays is pinpointing their root causes. Typical culprits range from adverse weather conditions and supply chain disruptions to modifications in project scope. Understanding the underlying issue is a prerequisite for developing a solution that works for you and your clients. For example, weather-induced delays call for a revised work schedule, whereas supply chain issues could be mitigated by identifying alternative suppliers or materials. Moreover, a thorough reassessment of the project timeline may reveal opportunities for recuperating lost time, potentially through workforce augmentation or extended working hours.

Evaluating the ramifications of delays on the project’s overall timeline and budget is imperative. This evaluation should be accompanied by transparent communication with subcontractors and suppliers, given their critical roles in the project. Documenting the delays and their justifications will be referenced by your attorney (if necessary), and it will assist you with the discussions with your clients when there is an alteration to the timeline. Proactively managing delays and incorporating buffer periods into project timelines can significantly reduce their impact.

Maintaining open lines of communication is crucial. Ensuring that all project participants, including team members, stakeholders, and clients, are apprised of delays and the measures being implemented for resolution is essential for sustaining trust and managing expectations.

Legal Considerations for Managing Cost Overruns

Dealing with cost overruns begins with a detailed project budget analysis to determine where your additional expenses came from. These could stem from unforeseen site conditions, fluctuations in material costs, or other factors. It may be necessary to reassess the project’s scope. During this time, look at your options for making adjustments, ultimately allowing you to fulfill your obligations. Engaging with your team members to brainstorm cost-saving strategies can yield creative alternatives.

Establishing a contingency fund for unexpected expenses is one financial strategy for construction projects. Negotiating favorable terms or rates with suppliers and contractors can alleviate financial pressures. Consulting with a financial expert specializing in construction projects can offer insights into budget management and risk mitigation. Being transparent with budgetary concerns with stakeholders can preempt misunderstandings and preserve the project’s integrity. You should have budget reviews regularly to address some of the financial challenges you’re facing at their earliest stage. 

Maintaining an open dialogue with clients about cost overruns is essential. Candid discussions regarding the situation and potential remedies, such as project downsizing or pursuing more economical options, are difficult to have—but they are better than late-stage surprises.

Lawyers Who Understand the Construction IndustryFacing delays and budget overruns in construction requires a comprehensive understanding of the issues, effective communication, and practical problem-solving strategies. Should these challenges arise, consider consulting with a law firm with significant construction law experience. Contact us to schedule a consultation.

Delays are an inevitable reality. While minor setbacks are often absorbed into the project timeline, more significant delays can have far-reaching consequences. They disrupt project schedules and increase costs. When substantial delays arise, the question of who bears responsibility and the extent of compensation becomes a complex legal issue. This is where delay claims come into play.

Delay claims are formal notifications sent by a contractor to the project owner or another responsible party alleging that their actions or inactions caused a delay in the project’s completion. These claims seek to recover damages incurred due to the delay, such as increased labor costs, overhead expenses, and lost profits. 

Understanding the intricacies of delay claims is crucial for Florida contractors to safeguard their interests effectively and navigate the legal landscape surrounding these complex disputes. We wanted to explore the legal aspects of delay claims to provide contractors with valuable insights into identifying, documenting, and pursuing delay claims in Florida.

Identifying Delay-Causing Events

The first step in handling delay claims is to identify and document the events that caused the delay. Accuracy is critical. This requires a detailed overview of the project’s contractual obligations, the original project schedule, and the actual progress of the work.

Common causes of delay in construction projects include:

• Owner-caused delays: These delays arise from actions or inactions of the project owner, such as late or incomplete design changes, delays in obtaining permits, or interference with the contractor’s work.
• Subcontractor-caused delays: Delays caused by subcontractors can disrupt the overall project schedule if their work is critical to the project’s progress.
• Unforeseen events: Unforeseeable events beyond the control of any party, such as severe weather conditions or natural disasters, can also cause delays.

Documenting the Delay

Once the delay-causing events have been identified, it is essential to document the delay. This documentation should include:

• Date and time of the delay event: Accurate timestamps are crucial for establishing the sequence of events and determining the impact on the project schedule.
• Nature of the delay event: Clearly describe the event that caused the delay, providing specific details and supporting evidence.
• Impact of the delay event: Analyze how the delay affected the project’s progress, including the specific activities that were hindered or halted.
• Communications with the project owner: Document all communications with the project owner regarding the delay, including notices, letters, and meeting minutes.

Pursuing Delay Claims in Florida

In Florida, contractors can pursue delay claims under the Florida Prompt Payment Act (FPPA). The FPPA establishes a framework for resolving payment disputes in construction projects, including delay claims.

To pursue a delay claim under the FPPA, contractors must follow specific procedures, including:

• Providing timely notice of delay: Contractors must provide written notice to the project owner within 20 days of becoming aware of the delay.
• Submitting a formal delay claim: A detailed delay claim must be submitted to the project owner within 45 days of the substantial completion of the work.
• Negotiating a resolution: Contractors should attempt to negotiate a settlement with the project owner before resorting to litigation.

If negotiations fail, contractors may have to pursue their claims through litigation. This process can be complex and time-consuming, and it is highly recommended that contractors seek legal counsel from an experienced construction law attorney.

Legal Insights for Contractors

As Florida contractors navigate the complexities of delay claims, here are some valuable legal insights:

• Proactive approach: Early identification and documentation of potential delay-causing events can strengthen a contractor’s claim.
• Effective communication: Maintaining open and transparent communication with the project owner can help resolve delays amicably.
• Seek legal counsel: Consulting with an experienced construction law attorney can provide invaluable guidance and representation throughout the delay claim process.

Delay claims are a prevalent issue in the construction industry, and Florida contractors must be well-versed in their legal rights and responsibilities when handling them. By understanding the causes of delays, documenting delays, adhering to FPPA procedures, and seeking legal counsel, contractors can protect their interests and navigate the complexities of delay claims.

Florida Construction Law GroupIf you need help with delay claims in your construction projects, don’t navigate these complex situations alone. Schedule a consultation with Florida Construction Law Group to ensure your interests are protected, and you have the legal insights to handle these claims effectively.

Construction work is the backbone of our cities, an essential but complex combination of hard work, meticulous planning, and substantial financial transactions. The industry not only builds our communities but also shapes them to be better, safer places to live.

All of this also comes with complex legal issues that require diligent attention. Throughout the course of work, significant documentation must be not only drafted, agreed upon, and signed, but kept securely to reference when needed.

This is one critical aspect that will make or break the success and legal standing of a construction project: record keeping. Verbal agreements, while sometimes legally enforceable, are far from the best practice in the construction business. The foundation of any solid construction project management lies in the meticulous documentation of physical and digital records, and ensuring multiple copies are safeguarded.

Protect Yourself from Litigation

The construction business, with its myriad of transactions and interactions, is no stranger to litigation. It’s an inherent part of the business landscape. However, being dragged through legal proceedings doesn’t have to be a norm for your company (nor is it what you signed up for when you got into construction).

A comprehensive and accessible paper trail acts as a shield against the risks of litigation. By meticulously documenting every transaction and maintaining a record of all work completed, you create an armor of evidence that can protect your interests. This systematic documentation can be the difference between a resolved dispute and a prolonged (and expensive) legal battle. To safeguard your work from unnecessary litigation, it’s imperative to keep precise records that capture all the information necessary to defend your projects and your company.

Maintain Records Long-Term

It’s not just about keeping records while the work is active. The conclusion of a construction project doesn’t signal the end of the need for its records. In Florida, the statute of limitations on construction litigation is up to four years post-completion. That number can be extended to ten years in cases where the defects are considered to be latent.

This sets a minimum standard for how long records should be kept, but the savvy approach is to maintain these documents indefinitely. These records could be pivotal in future legal disputes or serve as a blueprint for handling subsequent projects and disputes. The longevity of your records could mean the longevity of your legal and financial security.

Establish a Consistent Record Keeping for Your Construction Business

Consistency is key. You need to prioritize efficiency and reliability in record keeping. When records from various projects are uniform in the way they are drafted and maintained, it not only streamlines management but also reinforces their credibility in the legal realm.

Courts tend to raise an eyebrow at records that lack consistency, casting doubt on their authenticity. A haphazard approach to documentation can lead to confusion, errors, and legal complications. It is crucial to establish and adhere to a consistent record-keeping protocol.

Ensuring that your record-keeping practices are beyond reproach is not just good business – it’s a legal imperative. At Florida Construction Law Group, we take pride in crafting consistent legal documents for your projects. Contact us today to fortify your record-keeping strategies and cement the legal standing of your construction work.

At Florida Construction Law Group, we regularly discuss the importance of strong construction contracts and how they safeguard any project’s progress and ultimate completion. Your work is best protected when you draft, sign, and thoroughly understand strong contract terms.

One of the most important elements of these contracts is the scope of work clause. This sets the stage for much of the project and is one of the key aspects of a construction contract that not only settles disputes but also proactively prevents them. Everyone should understand the scope of the work at hand so nobody is able to dispute strong work being done in the future. 

What is a Scope of Work (SOW) Clause?

A scope of work clause, commonly referred to as an SOW, serves as the blueprint of your construction project. It outlines the materials, activities, project milestones, deliverables, and, ultimately, the end product expected in the work.

Think of it as the document that gets everyone on the same page. It should leave no room for ambiguity, ensuring that both parties understand their responsibilities and expectations from the very beginning.

An SOW allows all stakeholders to align their efforts and resources effectively. Whether you’re the property owner, general contractor, or subcontractor, a well-drafted scope of work clause is your compass.

How Scope of Work Clauses Protect Your Project

These are often the key to preventing and resolving some of the most common construction disputes. Before you take any other steps when a dispute arises, refer to the SOW to see if the dispute is able to be quickly resolved.

Imagine a scenario where there’s a disagreement between the property owner and the general contractor regarding the quality of materials used. Without a comprehensive scope of work clause, this dispute could spiral into a costly and time-consuming legal battle. However, if the scope of work clause clearly defines the materials to be used and the quality standards to be met, it becomes a straightforward resolution.

Work with Florida Construction Law Group on Your Contracts

When it comes to protecting your Florida construction project, partnering with experienced legal professionals who understand construction law is vital. At Florida Construction Law Group, we have significant experience in drafting, reviewing, defending, and disputing terms in Florida construction contracts. We are able to handle disputes from either side because we understand the scope of work being done to build and preserve our communities.

Don’t leave the fate of your construction project to chance. Rely on Florida Construction Law Group to draft and defend your next construction contract.

In construction law, performance bonds play a pivotal role in securing financial commitment to a project. These financial instruments ensure that construction projects are executed smoothly and without disruption.

However, when disputes arise and claims are made against performance bonds, a complex dance of legal intricacies commences. When a surety is facing potential liability due to a performance bond claim, it’s imperative that a thorough investigation takes place to verify the claim and find potential remedies.

What is a Performance Bond?

Performance bonds guarantee the value of the work is not lost if a contractor is unable to pay, faces bankruptcy, or is dealing with a similar circumstance. These bonds ensure progress is not stalled on the project when financial issues arise. They provide protection through payment guarantees for labor, materials, and services rendered.

Verifying a Performance Bond Claim

Upon receiving a performance bond claim, the surety’s initial duty is to launch a comprehensive investigation. This process serves as the cornerstone for determining whether the bond principal (the party responsible for fulfilling contractual obligations) is indeed in default. Verifying this is an important first step before anything else is able to move forward.

Once liability is confirmed, it’s important to investigate each and every aspect of the agreement and its ties to the project. By delving into the specifics, the surety gains a panoramic view of the circumstances, allowing them to determine the most appropriate course of action.

Investigating a Performance Bond Claim

The investigation process during a performance bond dispute is vital to finding a resolution that satisfies all involved parties. As a surety, engaging in a thorough and expeditious investigation is not just a legal obligation but a strategic move to uncover remedies, safeguard interests, and facilitate a fair resolution.

A thorough investigation not only demonstrates the surety’s commitment to remedying the situation. The investigation serves as a crucial element for the surety to identify potential avenues for resolving the dispute while mitigating the impact on all parties involved. All options should be on the table, including renegotiations or even collaborative solutions to rectify the situation without entering litigation.

Work with an Experienced Florida Construction Law Firm

In the realm of construction law in Florida, a surety’s responsibility is not one that can be taken lightly. The intricate web of legalities, obligations, and potential liabilities requires a steadfast dedication to due diligence. That’s where Florida Construction Law comes in.With a deep understanding of construction law and performance bond intricacies, we provide clients with unwavering representation and advice through every phase of a surety claim and construction project. Whether you are facing a claim or attempting to execute a claim, we handle both sides. Contact our team and get the best representation for your performance bond dispute today.

What’s in a contract? For construction contractors, the answer should be everything. Contracts are the backbone of Florida construction work, and it’s imperative that these contracts are fortified with careful and thorough legal consideration.

But, what terms do you really need and what do some of the common terms actually represent when you’re signing a contract? We want to make sure you have peace of mind before you sign anything.

Pricing Terms

Fixed Price – For fixed-price contracts, all work must be done for the defined price that will either be paid for all at once (lump sum) or over the course of the work.

Guaranteed Maximum Price (GMP) – Under GMP terms, there is a price limit set for the work. Any work done beyond this upper limit is paid for by the construction manager.

Time and Materials – This type of contract requires the contractor to bill the owner for labor, materials, and hours worked. This is best for jobs where the amount of time and materials required is unclear.

Unit price – Unit pricing uses a fixed price on a defined “unit” such as price per square foot. Contractors bill for each individual unit in the work.

Draw Request – Many contractors are paid out in phases over the course of the job. A draw request is made when more money from the loan is needed and a phase of the work is complete. These often result in draw request disputes.

Dispute Resolution Terms

Dispute Resolution – Dispute resolution in construction contracts ensures a proactive approach when disputes arise involving draw requests, payments, materials needed, and other issues.

Indemnification – This is applied when any damages are incurred due to actions or omissions by a contractor. The contractor is held responsible for these costs as opposed to the owner unless otherwise defined.

Forced Arbitration – Certain contracts will include language for forced arbitration which requires that the involved parties enter into legally-binding arbitration as opposed to filing a lawsuit to resolve issues that arise.

Termination – Construction contracts must define when a job is able to be legally terminated. This includes when contractors are able to walk away and when the owner or client is able to terminate the work to either hire new contractors or abandon the project.

Use Florida Construction Law to Review Your Construction ContractsThese are just a sample of the many key terms included in Florida construction contracts. It’s important to have an attorney review your contracts before committing to a job. This protects you, your employees, and the work being done. Contact Florida Construction Law Group for a thorough contract drafting or review today.

One of the best and most efficient ways to help ensure payment as a construction contractor is to file a mechanic’s lien. A lien, in general terms, is a legal guarantee that the lienor (person who filed the lien) gets money if the property is ever sold. There may be multiple liens on one project or property, which is one reason why contractors should file a lien as soon as they believe it would be beneficial.

This blog will walk through the general process of filing a mechanic’s lien and enforcing the lien through a foreclosure action.

Step 1: File the lien in accordance with Florida law. 

The most important thing to keep in mind at the beginning is the deadline for filing a Florida mechanic’s lien. As long as you are privy to the project’s prime contract, you have 90 days from the project’s last work to file a lien. If the prime contract was terminated earlier than the project’s last work, you must file within 90 days of that contract termination. 

The lien itself must contain certain information about the project and be filed with the county clerk’s office where the project is located.

Step 2: Send notice to interested parties. 

After filing your mechanic’s lien, the real work begins. Florida law requires lienors to file copies with the project’s interested parties within 15 days of the lien’s filing. Copies should go out to developers, owners, lenders, subcontractors, and material suppliers. 

In many cases, simply giving notice that you are planning to file a lien will get you the payment. A Notice of Intent to Lien is not required in Florida, but it may result in payment all the same.

Step 3: Consider filing a foreclosure lawsuit to enforce the lien. 

You’ve filed a lien and haven’t heard anything from the project owner despite the lien notice and multiple attempts to contact them. It might be time to tighten the screws.

Under normal circumstances, the lienor in Florida has one year from the date of the lien’s recording to bring a foreclosure action. However, that statute of limitations can be drastically shortened in two ways. One, the property owner can file a Notice of Contest of Lien to shorten it to 60 days. Two, the deadline can be changed to just 20 days if the interested party comes back with a counter-lawsuit after receiving notice of the lien.

Step 4: Talk with your lawyer and turn over everything.

Your attorney should handle all the technical requirements, like filing the foreclosure lawsuit with the appropriate court and arranging for service of process to the other parties. However, you can do your part by giving your attorney relevant documents, contracts, pictures, and other information. Being transparent and forthcoming can help your case.

A successful case will usually result in a sale of the property or project. You may have to wait before you get the money you are owed. In some cases, successful claimants (lienors who enforce their liens by filing a foreclosure action) receive reimbursement for attorney’s fees.

A Skilled Attorney is Your Greatest Resource

Filing and recording a mechanic’s lien requires great attention to detail, as does ensuring you did so in the appropriate amount of time. Filing a foreclosure lawsuit to collect on that lien is much more complex; hiring an experienced attorney is the best thing to do. You deserve to be paid for the work you did, and our firm would be glad to help make that happen. Call us at 305-227-4030 or fill out a form on our website to get in touch with Florida Construction Law Group.

You have probably heard all about home solar panels- go green to save the earth, with no money down, and pay almost nothing on your electric bill. It sounds like a no-brainer if you are a homeowner to use clean energy to cut back on your electric bill.

With over 11,000 solar panel companies nationwide, the ease and availability of equipping your home with panels are unending. Homeowners can pay cash, take out solar loans, and use solar leasing. We are going to look at one specific funding option known as PACE

PACE (Property Assessed Clean Energy)

PACE loans are increasing rapidly throughout Florida. PACE loans are a low-cost, long-term financing option for homeowners. Through the PACE program, homeowners can purchase energy-efficient equipment through a non-ad valorem assessment that is repaid through the homeowner’s annual tax bill. There is no upfront cost for the homeowner, but a lien is then placed on the property equaling the value of the improvements, then assessed and added to the future property taxes. There are some considerations and concerns surrounding the program.

Underwriting Issues

With these PACE programs, the lenders are not thoroughly looking at the owner’s financial ability to repay these loans. They are m looking at your history of re-paying your mortgage and the equity in your home.

Lender Concerns

PACE Providers have not been upfront in explaining that the lien placed will likely inhibit any additional bank financing while the lien is still on the property. Lenders are rightfully concerned because the lien can potentially impair their rights as the lienholder. Certain banks will not back mortgages that currently have a PACE lien against them.

Sale of Property

If the property is sold, the lien may need to be repaid in full before the home is sold.

Loan Disclosures

The PACE loan providers slickly gloss over the details and critical implications of agreeing to the loan. In their agreement, PACE states that they have a right to foreclose upon their investment if there is a failure to pay. Therefore PACE can take the property away from the homeowner.

Contractor Issues

The PACE program does not install the solar panels themselves. They hire contractors, which does not guarantee that the contractor is reputable or responsible. There have been several circumstances where the contractor does not complete the project correctly or even walks away from the project, and the homeowner is still liable for the lien on their home.

Get Representation

Let our experienced and dedicated attorneys at the Florida Construction Law Group help you with any questions or issues you may have surrounding the Florida PACE program or its loans.