Step-by-Step: How the Construction Recovery Fund Process Works

The Florida Homeowners’ Construction Recovery Fund (known as the “Fund”) is a statutory remedy for homeowners who suffer financial losses due to the misconduct of licensed contractors.  The Fund serves as a last resort for homeowners and is only an option for those homeowners who have done the work to exhaust their alternative remedies.  The Fund is administered by the Florida Construction Industry Licensing Board (CILB) under the Department of Business and Professional Regulation (DBPR).  It is vital for homeowners to understand the process before seeking compensation for incomplete, abandoned, or defective residential construction projects.  The construction attorneys at Jimerson Birr can help you navigate the process of completing a successful claim.

What Is the Homeowners’ Construction Recovery Fund? 

The Homeowners’ Construction Recovery Fund was created by the legislature to help Florida homeowners.  The statutory authority for the fund comes from ss. 489.140–489.144, F.S.  The fund was created to compensate homeowners for monetary damages caused by certain violations of Florida law by licensed contractors.  The Fund only applies to residential construction projects (e.g., single-family homes, townhouses). Commercial properties and rentals are excluded from coverage.

Eligibility for the Fund

Residential construction projects are the only projects eligible for relief from the Fund.  In particular, eligibility applies to homeowners who contracted with a licensed Division I or Division II contractor for work on their home.  Division I contractors are either General Contractors, Building Contractors, or Residential Contractors.  Division II contractors are specialty contractors who are generally limited to specific trades or phases of construction like HVAC, plumbing, or roofing.

The contractor must have committed a violation under § 489.129(1), Florida Statutes to qualify for the Fund.  The typical violations are mismanagement or misconduct causing financial harm, abandoning a project for more than 90 days, or making false statements about bonding, payments, or insurance.  The homeowner must have obtained a final judgment, arbitration award, or CILB restitution order against the contractor.  The claim must be filed within a year of that judgment or the claim is barred.

The Evaluation Process for the Fund

In 2024, the legislature changed the Fund to make it easier for homeowners to qualify and to increase the financial relief available, especially for Division I claims. The process is now more streamlined, and compensation limits better reflect the realities of modern construction costs. 

Step 1: Determine Eligibility

The first step in evaluating a potential claim requires eligibility determination.  The checklist is clear:

• Was the contractor licensed?
• Was the contract for residential property?
• Did the loss result from a violation listed in § 489.129(1) (g), (j), or (k)?
• Do you have a final judgment, arbitration award, or CILB restitution order?

Step 2: Exhaust All Other Options

The Fund is only intended as a remedy of last resort. Homeowners must exhaust all civil remedies before applying.  The homeowner needs to establish direct attempts at resolution with the contractor pursuing mediation, arbitration, or litigation as appropriate.  

Step 3: Gather Documentation

It is important to keep records of all communications, contracts, payments, and legal actions.  Documentation will be necessary to make a successful claim and must be provided to DBPR.  This requirement prevents the Fund from receiving spurious claims from disgruntled homeowners.  Organization of these documents can help make the processing of your claim run more efficiently and having an attorney prepare your responses and interface with the department can help speed up what is a lengthy process.

Here is a list of Documents Essential to filing a successful claim:

• Copy of the signed contract with the licensed contractor.
• Proof of contractor’s license status.
• Final judgment, arbitration award, or CILB restitution order.
• Proof of payments made (receipts, canceled checks).
• Documentation of damages (photos, expert reports).

Step 4: File Your Claim

A claim to the Fund should be filed with DBPR using the official Florida Homeowners’ Construction Recovery Fund Claim Form.

Where to File:  Construction Industry Licensing Board 

2601 Blair Stone Road Tallahassee, Florida 32399-1039

How to File:

• Complete the claim form and attach all required documentation.
• Pay the $100 non-refundable processing fee 
• Claims must be filed within one year of obtaining the judgment or award 

What Happens After You File with the Fund?

After you file, DBPR reviews the claim to determine it contains sufficient information to satisfy the statutory minimum criteria.  The CILB evaluates the claim and may request additional information.  This is why it is important to have an attorney assist you in filing your claim.  Follow-up requests from the CILB can cause immense delays to the processing of the claim as there are only periodic board meetings for the CILB to discuss the claims and make determinations.

If the CILB approves the claim, payment will be issued up to the statutory cap:

• $100,000 per Division I claim for contracts after Jan 1, 2025 (previously $50,000)
• $25,000 per Division II claim
• $2,000,000 aggregate cap per contractor 

This process takes months to complete after you have a judgment against your contractor.  The delay is due to the structure of licensing in Florida.  CILB must convene and make a determination about your claim.  This licensing board meets intermittently during the year, and these meetings are the only times a claim can be approved.  This structure prioritizes promptly filing an accurate and complete claim.  Frequently people see denials or delays due to missed deadlines or failure to exhaust all other remedies.

Navigating the Florida Homeowners’ Construction Recovery Fund Process

The Construction Recovery Fund is a valuable safety net for Florida homeowners harmed by licensed contractor misconduct.  Navigation of the bureaucracy can be difficult and intimidating.  Understanding the requirements before filing your claim is absolutely vital to making a successful one.  Following the statutory process and providing thorough documentation are key to a successful claim.  Contact us today to learn how the experienced attorneys at Jimerson Birr can guide you through this complex process.