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Is there a FL law that forbids me from invoicing the client directly and then pay out construction?

FloridaDesign Professional

If I have an interior design firm that handles projects from construction to delivery, is there a law that forbids me from invoicing the client directly and then pay out construction? If so where can I read it. Also what happens when a client refuses to pay final construction because of on-site change orders made without confirmed costs for those changes and when we final invoice the client so we may close out construction invoices; they refuse to pay after the work was done.

1 reply

Jan 21, 2020

I'm not aware of any Florida law which limits the ability to directly bill a customer then pay out contractors, subcontractors, suppliers, etc. Though, I would note that if an interior design firm gets too close to performing the functions of a general contractor, then general contractors' licensing requirements may come into play. What's more, if you're referring to invoicing a large portion (or all of) the job, then paying others with that cash in hand - Florida does not appear to place a limit on the amount of a down payment for construction or interior design work. Rather, the parties are generally free to negotiate the payment terms of their contract.

Billing change orders

Finally, regarding change orders - it's a good idea to get every change order in writing before performing work that's not in line with scope of work in the contract originally signed. As you may know, undocumented change orders are an extremely common source of frustration - so having a written change order that's priced and signed is the best way to avoid issues. If change orders aren't properly documented, it's still possible to recover payment - but, if worse comes to worst and a legal claim becomes necessary, that will complicate the dispute and lessen the odds for success. Regardless, below are a few tools that might be able to help with payment recovery.

Payment recovery tools

For one, invoice reminders can be helpful. Documenting unpaid amounts and formally requesting payment is sometimes all that's necessary in order to get paid. Escalating things a bit with a payment demand letter can be helpful, too. Demand letters will generally contain specific legal threats and put a deadline on making payment. Finally, if the work that's been done has given rise to lien rights, then sending a document like a Notice of Intent to Lien can be particularly effective. Mechanics liens work in a number of ways to force payment (we counted 17!), and because they're so powerful, the mere threat of a lien claim is often enough to get paid. And of course, if push comes to shove, mechanics lien rights (as applicable) and legal claims could help to get paid. Though, again - the failure to get changes in writing can be problematic in either situation.

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