Written by: Ali Iftikhar, Esq.
Homeowners in Florida can recover up to $2 million in actual losses caused by general contractors who have, for example, left them mid-project with unfinished work, defective work, or who have run off with their money leaving liens against the homeowner’s property. The saving grace? The Florida Homeowners’ Construction Recovery Fund (the “Fund”).
Contractors becoming insolvent and shutting down shop in the middle of a project is an issue Florida homeowners have dealt with for quite some time. Often, general contractors find themselves overstretched and overleveraged leading to financial insolvency. This can leave homeowners with unfinished work, and on occasion, claims and liens filed by subcontractors, and no avenue to seek recompense from the insolvent contractor. To address this issue in some capacity, in 1993, the State of Florida set up the Fund “to compensate consumers who suffer monetary damages as a result of certain violations by licensed contractors.” In this day and age where there are numerous new construction and renovation and remediation projects ongoing in Florida, it is important that homeowners understand and appreciate the opportunity afforded by the Fund to recover all or a portion of the money they have spent on a contractor whose conduct falls within the parameters established by statute so that they are not left high and dry.
Legislative Intent Behind the Fund
Specifically, as provided for in Fla. Stat. §489.1401, the intent of the Florida legislature in setting up the Fund was to ensure that homeowners who had obtained an award or judgment against a contractor would have at least some chance to recover all or a portion of the funds they had expended. The statute further provides that the award or judgment providing homeowners with restitution could arise through litigation, arbitration or an administrative/disciplinary proceeding before the Florida Construction Industry Licensing Board (“FCILB”). As such, regardless of the terms governing disputes as provided in the contract executed between homeowners and the contractor (i.e. mandatory arbitration provisions, non-jury trials etc.), there are multiple ways for homeowners to seek recompense through the Fund.
Who Qualifies as a Homeowner Under the Statute?
While the Fund does provide a potential avenue for recovery, there are certain criteria that must be met to seek financial compensation. For starters, claimants can only be “homeowners” as defined under Fla. Stat. §489.1402. This is limited to “owner(s) of an owner-occupied residence, including a trustee based upon a trust instrument granting a person a beneficial interest for life in the residence.” Therefore, renters of residential properties and commercial projects are not eligible to seek compensation through the Fund. As far as the types of contractors whose work is covered for the purposes of recovery from the Fund, they are divided into Division I (general, residential and building contractor licensees and Division II (roofing, plumbing, underground utility, solar, pollutant storage, mechanical, pool and air conditioning contractors with certain other “specialty contractors”).
Requirements for Filing a Claim
To successfully make a claim with the Fund against a Division I or Division II contractor, the homeowner must first either obtain a final judgment in a civil proceeding based on a specific violation of the licensing or lien law; obtain an arbitration award against the contractor similarly based on a specific violation of law; or obtain an order providing restitution from the FCLIB through an administrative proceeding. In each case, the judgment or order must stem from actions or transactions related to the contract with the contractor, which occurred during the time the contractor was licensed, and these acts or transactions must fall within the criteria set forth under Fla. Stat. §489.129(1)(g), (j), or (k) or Fla. Stat. §713.35. Moreover, a specific amount of damages claimed must be provided in the judgment or order and these must be “actual damages” suffered. Finally, provided that these aforementioned conditions are met, the homeowner must file the application with the FCILB, which is the entity responsible for administering the fund and payments owed through it, for recovery from the fund within one (1) year from the date any order or judgment is entered against the contractor. There are further strict requirements related to the filing of claims with the FCILB and homeowners must be aware of the same. Using the correct FCILB form and submitting the required documentation (i.e. certified copy of the order or judgment, contract, invoices, proof of payments, insurance policies, copies of performance bonds etc.) is crucial. The FCILB directs the correct documentation to file a claim by rule.
Claims Process and Payment Limitations
Once the application is filed with the FCILB, a notice for a hearing will be issued no less than fourteen days prior to the date it is set by the FCILB. However, the processing of claims can often take quite a while, and notices of hearings may not be sent for a significant period of time. Therefore, a substantial amount of time may pass before a final payment is rendered to the homeowner. These final payments are also capped based on the type of contractor against whom the judgment or order is obtained (i.e. Division I or Division II), as well as the date of the contract. For contracts dated July 1, 2024 and after with Division I contractors the maximum amount a homeowner can recover is $100,000.00 and the total amount paid from the fund being capped at $2,000,000.00 for each Division I licensee, and for those with Division II contractors the maximum amount a homeowner can recover is $30,000.00 with the total amount paid from the fund being capped at $600,000.00 for each Division II licensee.
Should You Retain Legal Counsel?
Recovering money through the Florida Homeowners’ Construction Recovery Fund involves strict deadlines, detailed documentation, and specific statutory requirements, making the process difficult for homeowners to manage on their own—especially when already dealing with the fallout of an insolvent or non‑performing contractor. Experienced legal counsel can ensure the claim is filed correctly, avoid administrative delays, and maximize the chances of obtaining full recovery. If you believe your situation may qualify for the Fund, professional guidance can help you understand your options and move forward with confidence.
Ali S. Iftikhar is a Senior Attorney at Barakat + Bossa, where he focuses his practice on complex commercial litigation, construction disputes, real estate litigation, and business torts. Mr. Iftikhar represents homeowners, contractors, and business owners in high stakes matters, including claims involving contractor misconduct, construction defects, and statutory remedies such as the Florida Homeowners’ Construction Recovery Fund. Known for his meticulous preparation and strategic problem-solving, Mr. Iftikhar is committed to guiding clients through litigation with clarity, efficiency, and unwavering advocacy. He can be reached at aiftikhar@b2b.legal .
This post is intended to provide general information regarding the recovery of attorneys’ fees in Florida and does not constitute specific legal advice. For guidance tailored to your situation, please contact our team directly.
