What Is Florida’s Construction Recovery Fund and How Can It Help Homeowners?
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Many homeowners in Florida have encountered significant challenges when engaging contractors, including unmet expectations, missed deadlines, and contractual disputes. As the state’s population continues to grow and development accelerates, issues within the construction industry have become increasingly prevalent. They are not alone as the state has seen a significant increase in contracting issues as the state’s ever-increasing population growth fuels rapid development.
This environment is fertile for fraudulent activities, affecting individuals across all demographics, including public figures and celebrities (see News4Jax, 2024).
Florida heavily regulates the construction industry, but even licensed contractors will exploit a homeowner leaving them with unexpected headaches in an already stressful situation. A homeowner opens up their home to a contractor and the state realized that even regulation cannot prevent a few bad actors from spoiling an entire industry. Recognizing this risk, the state created a financial safety net to help victims of contractor violations.
Understanding Florida’s Construction Recovery Fund
The Florida Homeowners’ Construction Recovery Fund (“Recovery Fund”) is established pursuant to ss. 489.140–489.144, F.S., and provides financial recourse for homeowners who incur losses resulting from the misconduct of licensed contractors. The Recovery 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 unfortunate reality is that you should hire an attorney like the specialists at Jimerson Birr to help you navigate the process of completing a successful claim
Who Qualifies for the Florida Homeowners’ Construction Recovery Fund?
Eligibility for the Recovery Fund is governed by ss. 489.140-489.144 which restrict access to the Recovery Fund to ensure it only goes to those who meet these criteria.
- The claimant must be a Homeowner
- The property in question must be a Residence
- The contractor must have Valid and Current License (Contracts with Unlicensed contractors are not eligible for recovery from the Recovery Fund)
The licensed contractor must fall into one of two divisions. Division I Contractors typically perform new construction, major renovations, or some form of structural work. Claims based on work performed by Division 1 Contractors are eligible for up to $100,000 from the Recovery Fund. Division II Contractors handle less general work. They focus on trade-specific projects requiring more specialized labor. Claims involving Division II Contractors are also eligible for up to $30,000.
| Division I Contractors | Division II Contractors |
| General contractorsBuilding contractorsResidential contractors | Roofing contractorsPlumbing contractorsHVAC contractorsElectrical contractorsPool/spa contractorsSpecialty contractors |
How to File a Claim with the Construction Recovery Fund
The Recovery Fund only covers specific types of claims against these specific types of contractors:
- Claims based on mismanagement, misconduct like failing to pay subcontractors
- Abandonment claims but only after 90 consecutive days
- False misrepresentations about bonding, insurance, or payments
To qualify for compensation, the homeowner must first exhaust all alternative remedies and obtain one of the following, directly related to the contractor’s violation:
- Final judgment from a court of competent jurisdiction
- Arbitration award
- CILB Restitution Order
Additionally, the claimant must demonstrate diligent efforts to enforce the judgment and provide evidence that recovery was insufficient or unattainable.
The claimant must also have attempted to enforce the judgment and be able to show that either no assets were found or that the recovery was insufficient to satisfy the judgment. The claimant must show the CILB that a diligent attempt was made to collect restitution as well. All this is done to ensure that the Recovery Fund is only used as a last resort once all legal remedies are exhausted. Claims must be submitted to the Recovery Fund within one year following the entry of judgment or award, subsequent to the claimant’s diligent collection efforts.
Homeowners are encouraged to verify contractor licenses and ensure all agreements are documented in writing. While Florida’s regulatory framework provides substantial protection, it is advisable to seek legal counsel when pursuing claims related to contractor misconduct. For further information regarding the Recovery Fund claims process, please refer to the official Florida Homeowners’ Construction Recovery Fund website. Our law firm has the expertise to help recover your losses and ease your headaches. Jimerson Birr can help you obtain your final judgment and process your claim to the Florida Homeowner’s Construction Recovery Fund.
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If you are interested in a more in depth dive of the process of submitting a claim to the Florida Homeowner’s Construction Recovery Fund, see Step-by-Step: How the Construction Recovery Fund Process Works.