What is Florida's 10% contractor deposit rule for Space Coast homeowners?

If a contractor takes more than 10% of the contract price up front on residential work in Brevard County or anywhere in Florida, state law requires permits applied for within 30 days and work started within 90 days of permits.

Buy a house on the Space Coast and a contractor is in your future. A new roof, impact windows, a pool cage, a kitchen, hurricane repairs. Most of those jobs start with a deposit, and that deposit is where homeowners in Melbourne, Viera, Merritt Island and across Brevard County are most exposed.

Florida has a specific statute that sets rules for large up-front payments on residential work. Knowing it before you write the check gives you leverage if a project stalls. Here is how the 10% rule works and what to do if a contractor takes your money and disappears.

What does Florida law say about contractor deposits?

The rule is Section 489.126, Florida Statutes, "Moneys received by contractors." It says a contractor who receives an initial payment totaling more than 10 percent of the contract price for repair, restoration, improvement or construction to residential real property must:

  • Apply for permits within 30 days after the payment is made, unless the work does not require a permit under local codes.
  • Start the work within 90 days after all necessary permits are issued.

There are exceptions. The deadlines do not apply if the contractor has just cause, or if you agreed in writing to a longer period. The statute also applies "without regard to the licensure of the person," so an unlicensed contractor who takes your money is covered too.

What should you do if a contractor misses the deadlines?

Section 489.126 spells out the first step. The homeowner must send a written demand letter asking the contractor to apply for the permits, start the work, or refund the payment. The letter goes by certified mail, return receipt requested, to the address in the contract. If the contract has no address, or there is no written contract, it goes to the contractor's licensing address on file.

The statute says it may be inferred that the contractor does not have just cause if they fail to apply for permits, start the work, or refund the payment within 30 days of receiving that written demand. That written record matters if you later need to pursue the contractor.

Milestone Section 489.126 timeline
Initial payment is more than 10% of contract price The rule applies to residential work
Apply for permits Within 30 days after payment (if permits are required)
Start the work Within 90 days after all permits are issued
Homeowner's written demand Certified mail, return receipt requested
Contractor's response window No action within 30 days of the demand may support an inference of no just cause

What is the Florida Homeowners' Construction Recovery Fund?

Florida runs a recovery fund that may pay homeowners, up to a limited amount, when they lose money on a residential project because of specified violations of Florida law by a licensed contractor. Under Section 489.1425, most contracts for residential repair, restoration, improvement or construction must include a written statement explaining your rights under the fund. The exception is a job where the value of all labor and materials does not exceed $2,500.

If your contract for a bigger job does not include that notice, that alone tells you something about the contractor.

Recovery is not automatic. Section 489.141 generally requires the homeowner to first get a final judgment, an arbitration award, or a Construction Industry Licensing Board order directing the licensee to pay restitution, and to exhaust any available bond, insurance or similar coverage. The fund is built around licensees, which is one more reason to hire a licensed contractor.

How do you check a contractor's license?

Florida's Department of Business and Professional Regulation runs a public license search. Look up the business and the individual qualifier, confirm the license is current, and confirm the license type matches the work. My step-by-step guide to checking a Florida contractor's license before you hire on the Space Coast walks through it.

How can Space Coast homeowners protect their deposit?

  • Keep the deposit modest. The 10% line is a useful benchmark. If a contractor asks for much more, ask why, and get the permit and start dates in writing.
  • Get a written contract. It should include the price, scope, payment schedule, contractor's address and license number, and the recovery fund notice when required.
  • Pay by traceable methods. Checks or card payments create a record. Avoid cash.
  • Tie payments to progress. Pay as milestones are completed and inspected, not ahead of them.
  • Watch the paperwork. On many larger projects, a Notice of Commencement is recorded before work starts. Read my post on Notice of Commencement in Brevard County.
  • Close out permits. An open permit can follow the property to the next sale. See open and expired building permits in Brevard County.

Does this matter more after a hurricane?

It can. After a storm, homeowners often feel pressure to pay large deposits just to get on a contractor's schedule. The 10% rule covers repair and restoration work too, so the same protections and the same written demand process apply to storm repairs on your Space Coast home.

FAQ: Contractor Deposits in Florida

Is it illegal for a Florida contractor to ask for more than 10% down?

Section 489.126 does not ban a larger deposit. It says a contractor who takes more than 10% of the contract price as an initial payment must apply for permits within 30 days and start work within 90 days after permits issue, unless there is just cause or you agreed in writing to longer.

Does the 10% rule apply to unlicensed contractors?

Yes. The statute defines contractor to include any person performing or promising to perform the work, without regard to licensure. The recovery fund, however, is tied to licensed contractors.

How do I send a demand to a contractor who stopped showing up?

The statute requires a written demand letter, sent by certified mail with return receipt requested, to the address in your contract or the contractor's licensing address. For anything beyond that, talk with a Florida attorney.

Buying a Space Coast home that needs work, or planning upgrades after you move in, goes smoother when you know the rules going in. My partner Nichole and I got your back. Reach out anytime at (321) 212-7676 or www.livingspacecoast.com.