HB 1563 — Construction Contracting

F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB156,CS/HB1563 Engrossed 1 2024 A bill to be entitled An act relating to construction contracting;

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB156,CS/HB1563 Engrossed 1 2024 qualified business to obtain a performance bond and provide proof of such bond under certain circumstances;

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB156,CS/HB1563 Engrossed 1 2024 Be It Enacted by the Legislature of the State of Florida:

If a designated contractor or qualified business licensed by the board under this chapter pleads guilty or nolo contendere to, or is found guilty of, regardless of adjudication, an offense in violation of s.

713.345(2)(g), the board and the Electrical Contractors' Licensing Board must suspend all licenses issued to such Page 3of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed 1 2024 such licensee under this chapter for at least 1 year afterfrom the date of the conviction.

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed 1 2024 minor, corrective, or warranty work remains.

"Designated contractor or qualified business" means a contractor who is certified or registered under chapter 489 or a business organization qualified by a contractor who is certified or registered under chapter 489,489 andwho: such contractor or business organization:

(b) A designated contractor or qualified business that receives,receives pursuant to a contractpayment for improvements to real property, payments of $10,000 or more,more regardlessprior ofto whethercommencement suchpursuant paymentsto are paid in a lumpcontract sumfor or in the aggregate, before the commencement of such improvements to residential real property must, within 3 business days after receipt, place such payment in an escrow account with a savings and loan association, bank, or trust company located in the state;

Pageor 5ofa 10real CODING:estate broker licensed in the state, unless such escrow requirement is waived in writing by the owner of the residential real property.

If such escrow is waived in writing Page 5of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed 1 2024 orby athe realowner estateof broker licensed in the state,residential unlessreal suchproperty, escrowthe requirementcontractor ismust waivedprovide ina writingcopy byof thea ownerperformance ofbond theif residentialrequired realunder property.subparagraph 5.

If such escrow is waived in writing by the owner of the residential real property, the designated contractor or qualified business must provide a copy of a performance bond if required under subparagraph 5.

A deposit into the escrow account Pageremains 6ofthe 10property CODING:of the owner of the residential real property except as otherwise provided in this subsection.

4.

A designated contractor or qualified business may Page 6of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed 1 2024 remainswithdraw thefunds propertyfrom of the ownerescrow ofaccount before the residentialsubstantial realcompletion propertyof exceptwork as otherwise provided in thisthe subsection.following circumstances:

4.

A designated contractor or qualified business may withdraw funds from the escrow account before the substantial completion of work in the following circumstances:

(c) The owner of the residential real property may deliver by certified mail, return receipt requested, a written demand to the address listed in the contract for an accounting report of the funds paid to the designated contractor or qualified Page 7of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed 1 2024 by certified mail, return receipt requested, a written demand to the address listed in the contract for an accounting report of the funds paid to the designated contractor or qualified business.

Within 60 days after receipt of such demand, the designated contractor or qualified business must provide the owner,owner by certified mail, return receipt requested, with an accounting record indicating all payments made to and from the designated contractor or qualified business, including those that were made to subcontractors and for purchased materials.materials, by certified mail, return receipt requested.

(d) The failure of a designated contractor or qualified business to respond to an owner's written demand for an accounting report as required under paragraph (c) creates a rebuttable presumption that a violation ofwas this section is willful.

A contract for hourly labor provided by a designated contractor certified or registered under chapter 489 or a business organization qualified business.by a contractor certified or registered under chapter 489.

Page2. 8of 10 CODING:

A contractor certified or registered under chapter 489 or a business organization qualified by a contractor certified Page 8of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed2024 1or 2024registered 2.under chapter 489 who owns the real property upon which the improvement or construction is to be completed.

A designated contractor or qualified business that owns the real property upon which the improvement or construction is to be completed.

(f) If the value of a contract or addenda thereto is more than $100,000 for a contract for improvements to residential real property, a designated contractor certified or qualifiedregistered under chapter 489 or a business organization qualified by a contractor certified or registered under chapter 489, must obtain a performance bond equal to the value of the contract and provide proof of such bond to the property owner before commencing or continuing the project.

(g) A designated contractor certified or qualifiedregistered under chapter 489 or a business organization qualified by a contractor certified or registered under chapter 489 commits a felony of the third degree, punishable as provided in s.

775.084, if the designated contractor or qualified business willfully fails to place funds in an escrow account as required under this subsection.

(h) If a designated contractor or qualified business pleads guilty or nolo contendere to, or is found guilty of, regardless of adjudication, a violation of paragraph (g), the licensee is subject to discipline under s.

938.14 Court cost imposed in cases related to construction fraud.— (1) If a person pleads guilty or nolo contendere to, or is found guilty of, regardless of adjudication, an offense in Page 9of 10 CODING:

hb1563-02-e1hb1563-01-c1 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S CS/HB15,CS/HB1563 Engrossed2024 1fraud.— 2024(1) If a person pleads guilty or nolo contendere to, or is found guilty of, regardless of adjudication, an offense in violation of s.

hb1563-02-e1hb1563-01-c1