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Home>Levelset Community>Legal Help>We are working with contractor and working on kitchen, closet etc. design. We just finished closet design and got estimate. Work will start next year exact 5/1/2020. Contractor is asking 50% deposit payment of total amount to do to secure cost and date which is next year. Is that normal practice and legal???

We are working with contractor and working on kitchen, closet etc. design. We just finished closet design and got estimate. Work will start next year exact 5/1/2020. Contractor is asking 50% deposit payment of total amount to do to secure cost and date which is next year. Is that normal practice and legal???

FloridaConstruction ContractLicenses

Remodeling will start 5/1/20 and we still do not have total amount of the project cost from contractor to make sure we can afford the project.

1 reply

Jun 24, 2019
That's a good question. First, regardless of what is or isn't allowable, a 50% deposit payment a year out is an extraordinarily high and seems pretty dangerous. Generally, construction projects begin with a relatively small down payment then payments are made more or less proportionally with the work that's performed.

That being said, there does not appear to be a specific cap on how much of a down payment can be accepted by a contractor in florida. However, contractors who receive a down payment exceeding 10% of the contract price will (1) need to quickly secure a permit (within 30 days of receiving payment), and (2) must begin work within 90 days of securing permits (unless there's a contract between the owner and contractor stating otherwise) under 489.126(2) of the Florida Statutes.

So, unless an owner explicitly agrees otherwise, a contractor can't take more than 10% down without quickly securing a permit then starting work relatively shortly thereafter. In a situation where a contractor has proposed a start date that's far into the future and has asked for a very substantial down payment, it might raise some red flags. But, if an owner still wants to work with the contractor or otherwise vet them, it would be worth running a license search on the contractor, seeking out reviews from their previous customers, and/or searching the contractor via something like Angie's List and/or with the Better Business Bureau.

This article From Jimerson Birr also has great information for what owners might want to consider when building or renovating a Florida home: Basic Considerations for Building or Renovating a Home in Florida.
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