Florida Bar Journal

Statutes Affecting Florida Construction

Illustration by Barbara Kelley

Construction is a dangerous industry for its participants, but building failures may also have tragic consequences for end-users. Occupants of the built environment are at the mercy of its design, construction, and code compliance — something Hammurabi^[1] knew when he enacted the first known building code in 1758 B.C. In keeping with the sentencing guidelines of the times, he decreed that a builder whose construction caused the death of a building’s occupant would himself be put to death.

From the Fidenae amphitheater collapse in A.D. 27, that took some 20,000 lives,^[2] to the New Orleans Hard Rock Hotel collapse in 2019^[3] and Florida’s own Champlain Towers,^[4] poor design, shoddy construction, and unsafe practices have contributed to countless failures, resulting in death, injury, and financial disaster.^[5] In an effort to improve building safety and reduce insurance claims, states and municipalities developed standards to address fire safety, building exits, plumbing, elevators, and other areas of interest to insurance carriers, eventually leading to the publication in 1905 of the National Building Code.^[6]

Although development of sophisticated codes was a lengthy and fitful process, it is a testament to their efficacy and their enforcement that the great majority of deadly collapses in the last 20 years have occurred outside of the United States.^[7] Fire deaths among U.S. civilians have also fallen from almost 30 per million in 1980 to 11.3 per million in 2019, and the number of fires per 1,000 population has fallen from 13.1 in 1980 to just 4.2 in 2022.^[8]

This article reviews the various regulatory mechanisms that Florida has enacted regarding the construction industry, including those affecting payment for construction services and those affecting the safety of workers and end-users. There are some three dozen Florida statutes incorporating over 600 separate sections that govern or affect construction in Florida,^[9] and that’s without including those governing the courts,^[10] the clerks,^[11] civil procedure,^[12] corporate organization,^[13] insurance,^[14] and certain others not exclusively directed to the construction industry.^[15]

Construction differs from the manufacture of, say, toothpaste, in that it is a project-based industry. Each construction project has a beginning and an end, and goes through distinct phases. For our purposes here, we will arrange the relevant statutes according to the “before,” “during,” and “after” phases. The before statutes control the barriers to entry (licensing, contracts and codes), the during statutes govern what is built and how (code enforcement, workers’ compensation, safety), and the after statutes govern what happens when things go wrong (statute of limitations, liens, construction defects, arbitration code).

Before

How would a government help ensure that construction industry participants and end-users are protected from death and injury in unsafe structures? As discussed in greater detail below, the state would commence by prohibiting all building, and then delineate the exceptions in such a way as to ensure public safety. In the interest of establishing minimum standards for public health and life safety,^[16] Florida has enacted several such statutes. They operate as complete barriers to entry and include laws that prevent design professionals^[17] from designing and builders from building anything at all.^[18] Florida has also promulgated exceptions to this blanket prohibition, and all construction is conducted within the parameters of the exceptions.

• Licensing and Codes — These exceptions include a series of statutes that regulate the education, testing, and licensing of design professionals,^[19] and the experience requirements, testing, and licensing of contractors, inspectors, and certain tradesmen.^[20] The exceptions also include criteria to ensure that a proposed structure meets specific safety, health, and general welfare standards^[21] that have been memorialized in a set of codes.

Florida’s first building codes date to 1974, but a statewide uniform code and its strict enforcement had to wait until after Hurricane Andrew exposed rampant shoddy and dangerous building practices.^[22] The legislature enacted Ch. 98-287 in 1998,^[23] and when it went into effect in 2002, it was the nation’s most stringent building code.^[24] The Florida Building Code (the code),^[25] as it is known, is updated every three years based upon a review of the most current updates of the International Building Code, its sub-codes, and the National Electrical Code.^[26] The code^[27] regulates what is built and how, and includes rules concerning the selection and strength of materials, and how those materials are arranged and combined to keep the weather outside, minimize the risk of fire, and improve energy efficiency. Regulations also dictate how water, gas, electricity, and other utilities run throughout a structure, how waste is evacuated,^[28] and how the spaces within a structure are designed and used so as to minimize the risk of overcrowding or death by fire.

The code is supplemented by the Florida Fire Prevention Code, which incorporates NFPA Standard 1, Fire Code and NFPA 101 Life Safety Code.^[29] A variety of additional codes apply to specific structures, such as schools, public lodging,^[30] hospitals^[31] and nursing homes.^[32] The latter two are also subject to inspection and regulation by Florida’s Agency for Health Care Administration, more commonly referred to AHCA.^[33]

• Permitting — To obtain permission to build a structure,^[34] a contractor licensed under Ch. 489 must bring a set of plans prepared, signed, and sealed by design professionals licensed under Chs. 471 and 481, to be examined by a building department set up under the authority of Chs. 162^[35] and 553,^[36] and staffed by plans examiners certified in accordance with §§468.607, et seq. The plans examiners review the construction documents for compliance with the code,^[37] and a fire inspector, certified under §§633.216(2) and 633.412, reviews the design for life safety and fire code compliance. If the proposed design meets the requirements of these codes and such other codes as may apply, a building permit will be issued. A permit, is in essence, an exception to the general rule that prohibits construction, and it gives a qualified contractor a license^[38] to construct exactly what is on the approved drawings at the exact location shown on the plans.

• Contracts — One final component to consider is the contractual relationship among the owner, design professional, and contractor. Owners may be private persons or entities, or they may be public entities, such as school boards or municipalities. Design professionals and contractors are almost invariably private entities. Florida law makes few demands on contracts for private construction work. A contractor’s license number must appear on all contracts,^[39] which must also contain a notice concerning the applicability of F.S. Ch. 558 (construction defects).^[40] Additionally, contracts for residential^[41] work must include language regarding the Homeowners Recovery Fund^[42] and a lien law notification.^[43] Contracts containing a venue provision that requires legal action against a Florida contractor to take place outside of the state are void as against public policy.^[44] This venue restriction does not apply if the project is located on federal land, or if the Federal Arbitration Act applies to the contract.^[45]

Under F.S. §725.06, clauses in a contract that indemnify an indemnitee for its own “gross negligence, or willful, wanton, or intentional misconduct” are not enforceable against a contractor or subcontractor.^[46] An exception exists if there is a “monetary limitation on the extent of the indemnification that bears a reasonable relationship to the contract” that is a part of the contract specifications or bid documents.^[47] Section 725.06 only applies where an indemnitee seeks indemnification for its own negligence,^[48] and only applies to construction involving a “building, structure, appurtenance or appliance.”^[49]

During

Once a contractor has a permit in hand, additional laws come into play. These include laws concerning the enforcement of the minimum design standards set forth in the code, the safety of workers, and payment for work performed.

• Code Enforcement — The building department that reviewed and ultimately approved plans for a proposed project is also tasked with ensuring that what is on the permit set of drawings is built according to the code. In 1963, the legislature enacted F.S. §125.56, which originally allowed counties to develop their own building codes, but has since been amended to provide that a county has the authority to enforce the Florida Building Code and Fire Prevention Code and the power to adopt local amendments.^[50] The 1974 implementation of a statewide building code also included enforcement authority for local governments,^[51] now codified as F.S. §553.80.^[52] Counties have adopted the code via ordinance,^[53] and the actual procedures, methods, and rules for inspections may be found in a municipality’s ordinances.^[54] Inspections generally occur for each major discipline at each stage of construction, and there is often a separate inspector for structural, electrical, and plumbing work.^[55]

Large structures pose greater safety risks and require closer inspection. A “threshold building” is one that is greater than 50 feet in height, over three stories, or is designed to be occupied by large numbers of people (over 500).^[56] Such structures are subject to greater scrutiny during construction, and F.S. §553.79(5)(b) requires that the building’s structure be inspected by a “special inspector,” who must be an architect or engineer duly qualified by their respective boards.^[57] Unlike building inspections provided by the local authority, the cost of which is essentially wrapped up in the permit fees, this special inspector, known as a threshold inspector, is hired and paid for by the project owner.^[58]

Upon completion of construction and the passing of final inspections, a certificate of occupancy is issued, allowing the project to be used for its designated purpose. Such a certificate shall not be issued unless the local authority has required the contractor to comply with the minimum standards for its issuance and an authorized building official has inspected the building or structure for violations.^[59] If the life-safety aspects of a project have been completed but some minor work remains to be completed, or if a distinct portion of the work is finished, the building official can also issue a temporary certificate of occupancy, designating the duration of the certificate and identifying the work to be completed.^[60] In 2005, Florida’s Third District Court of Appeal held that, for the purposes of occupancy, there is no legal distinction between a temporary and a final certificate of occupancy, a position reiterated in F.S. §558.002(4).^[61]

• Worker Safety — In a textile factory, the thread winding and scutching machines^[62] are in the same place every morning, and workers generally know where to find the fire extinguishers and emergency exits. On a construction site, however, things change every day. New floors are added, new walls constructed, and formerly viable egress paths are now blocked or inaccessible. Such fluidity poses challenges to worker safety in an already dangerous industry, and poses challenges for those who promulgate safety rules and regulations. Although Florida has some laws that apply to worker safety, ^[63] it has no Occupational Safety and Health Administration (OSHA) approved state plan for worker safety;^[64] therefore, Florida is designated as a “federal OSHA state.”^[65] OSHA,^[66] the much criticized but vital federal workplace safety watchdog, was created by the Occupational Safety and Health Act of 1970, and went into effect on April 28, 1971.^[67] It covers almost all private sector employees, including, contrary to myth, those working for companies with fewer than 10 employees.^[68] In addition to the general duty clause,^[69] OSHA has promulgated specific regulations regarding the construction industry to address fall protection,^[70] trench safety,^[71] and numerous other aspects of job site safety.^[72] This section also requires ongoing and regular safety training,^[73] hazard communication,^[74] and accident reporting.^[75]

If a worker is injured on the job, Florida’s Workers’ Compensation Law, F.S. Ch. 440, assures the injured employee that medical bills will be paid and that at least a portion of income is compensated.

In order to simplify operation of the system, employers and employees mutually renounce their respective common law rights and defenses^[76] and are governed by the strictures of F.S. Ch. 440. Such relinquishment prevents the injured employee from suing the employer, and it also prevents the employer from denying coverage if, for example, the accident was the fault of the injured employee.^[77] Section 440.10 (1)(b) provides that a contractor is responsible for its own employees, as well as those of its subcontractors, except those who have provided their own workers compensation insurance. If an employee of an uninsured subcontractor is injured, the contractor may recover from the subcontractor all benefits paid.^[78]

Chapter 440 requires an employer to purchase a workers compensation insurance policy, and the premiums on these can be extremely high.^[79] A roofing contractor with 30 employees can expect premiums to run over $150,000 per year.^[80] Employers may seek to minimize the high cost of these premiums by conducting a legitimate review of worker classification codes or adjusting to a lower premium if the work description can support the change. A corporate officer may elect to be exempt from workers compensation coverage by filing the appropriate paperwork.^[81]

• Getting Paid — Getting timely paid for one’s work is one of the most difficult aspects of the construction industry. Developers, contractors, and subcontractors are all particularly sensitive to economic conditions, and business failures are not uncommon. In order to mitigate payment delays, Florida has enacted prompt payment laws that require public and private owners to make timely payments to contractors, and require contractors make timely downstream payments.^[82] Florida has also enacted a lien law allowing an unpaid entity to lay a claim against the property of the project’s owner.^[83]

Payment by public entities is governed by F.S. Ch. 218, Part VII, known as the Local Government Prompt Payment Act, ^[84] and requires payment for construction services within 25 days of receipt of an invoice.^[85] A public entity has 20 days to dispute an invoice, and 10 days to pay after receipt of a corrected invoice.^[86] Late payments bear interest at the rate of 1% per month.^[87] Downstream payments by contractors on public work are governed by F.S. §§255.0705-255.078, known as the Florida Prompt Payment Act. This act requires contractors to make payments to subcontractors within 10 days of receipt of payment from a public entity, and requires subcontractors to pay their sub-subcontractors and suppliers within seven days of receipt of payment.^[88] Failure to make timely payment subjects the non-paying entity to interest charges at the rate of 1% per month.^[89] Additionally, the prevailing party in an action to collect payment on a public project is entitled to fees and costs if the non-prevailing party is found to have unreasonably withheld any portion of the payment.^[90]

A similar law governs payments on private work. Known as the Construction Contract Prompt Payment Law,^[91] it provides for interest at the statutory rate,^[92] but does not create a separate cause of action except to collect interest,^[93] and does not provide for prevailing party fees.^[94] Given that there are far more effective alternatives to collecting payment in a construction setting, such as foreclosure of a construction lien, this law does not appear to be invoked very often.^[95]

Among the most persuasive ways to collect payment is via Florida’s Construction Lien Law, under F.S. Ch. 713. If a potential lienor^[96] has not been paid and follows the steps set forth in Ch. 713, he or she will acquire a lien against an owner’s property that, when sued upon, may require the owner to sell the property to satisfy the debt.^[97] The first step in complying with the lien law is for the owner to record a notice of commencement in the official records of the county where the project is located.^[98] This notice, which an owner is statutorily required to execute,^[99] gives all potential lienors the information they need to serve a notice to owner,^[100] a prerequisite for non-privity lienors to claim a lien against an owner’s property in case of non-payment. An owner who wants to avoid the risk of liens may require the contractor to furnish payment and performance bonds,^[101] which act as substitute security for all lienors except the contractor. The bond must be recorded along with the notice of commencement.^[102] Notice requirements are similar, except that the contractor and not the owner must be notified.^[103] Public property is not subject to liens and F.S. §255.05 requires that contractors entering a contract with any public entity furnish a payment and performance bond.^[104]

After

Projects rarely go as planned, and delays, cost overruns, and defective work are among the most common owner complaints. However, these issues are often raised as a defense to, or a mask for, problems of non-payment. Although most owners and contractors are able to resolve their differences, the litigation of owner-contractor disputes is all too common.

• Warranty — Many contractors will provide a warranty that the finished product will comply with the plans, specifications and the building code, and that any defects discovered within one year after completion will be repaired at no cost to the owner.^[105] Condominium warranties are governed by F.S. §718.203. Developers are subject to the requirements of §718.203(1), which imposes a three-year warranty of fitness and merchantability to the purchaser of each unit. Contractors are held to §718.203(2), which imposes a three-year warranty of fitness as to the work performed or materials supplied for the roof and the common structural, mechanical, and plumbing elements, and a one-year warranty for all other elements.

In order to enforce a warranty claim, timely written notice to the contractor and an opportunity to cure are generally required. The cost to the owner of failing to do so was addressed in two 2016 Third District cases. In their simplest terms, these cases both held that an owner had lost its ability to seek redress from the contractor where the contract contained a warranty clause and the owner performed repairs without notifying the contractor.^[106]

• Code Compliance — Florida does not recognize a common law duty to comply with the building code, but the legislature has created a statutory cause of action against those who fail to do so.^[107] Importantly, there is no cause of action for intentional violation of the building code unless the violation causes actual damage.^[108] In Cohen v. Hartley Brothers Const., Inc., 940 So. 2d 1251, 1252 (Fla. 1st DCA 2006), the First District reiterated the three facts needed to show that a builder is not liable for a code violation: 1) the necessary building permits had been obtained, and the agency with the authority to enforce the code had approved the plans; 2) the construction project had passed all required inspections under the code; and 3) no personal injury or damage existed to property other than the building at issue.^[109] The statute has recently been amended to restrict such claims to “material” code violations, adding that a material violation is “a Florida Building Code violation that exists within a completed building, structure, or facility which may reasonably result, or has resulted, in physical harm to a person or significant damage to the performance of a building or its systems.”^[110]

• Defects — In an attempt to reduce the flood of construction defect lawsuits,^[111] the legislature created Ch. 558, known as Florida’s Construction Defect Law. ^[112] It has gone through various iterations since its inception in 2003 and, in its present form, requires an owner to provide a contractor or design professional with written notice of any defects and an opportunity to cure as a prerequisite to commencing litigation.^[113] A failure to comply will result, upon motion by the defending party, in a stay or abatement of the action or, rarely, dismissal without prejudice.^[114] Although service of the notice tolls the applicable statute of limitations, it does not toll the statute of repose.^[115]

Owners and contractors may elect to opt out of the requirements of the construction defect statute if they do so in writing.^[116] The chapter does not apply to projects that have not been completed.^[117]

• The Lawsuit — There are three important constraints affecting construction-related lawsuits in Florida: venue, the statute of limitations, and the statute of repose.

1) Venue: Although venue clauses are generally enforceable, those that require legal action involving a resident contractor, subcontractor, sub-subcontractor, or materialman to be brought outside this state are void as a matter of public policy.^[118] The law voids the venue clause, and venue is determined by F.S. §47.025.^[119] The statute applies only to contracts for the improvement of real property,^[120] is superseded where the Federal Arbitration Act applies to the contract,^[121] and in federal diversity jurisdiction cases.^[122] The federal diversity jurisdiction ruling in Covenant Services, Inc. v. Jones-Blair Co., 14-62004-CIV, 2015 WL 13118079 (S.D. Fla. Jan. 5, 2015), is of some concern, as an out-of-state contractor seeking to enforce its home state venue clause need simply transfer any case to federal court and thereby evade the protections embodied in §47.025.^[123]

2) Statute of Limitations and Statute of Repose: There is a four-year statute of limitations on actions “founded on the design, planning, or construction of an improvement to real property.”^[124] For latent defects, the four year period “runs from the time the defect is discovered or should have been discovered,” until it bumps up against the seven (formerly, 10)^[125] year limitation imposed by Florida’s statute of repose.^[126] This limitation acts as an absolute bar to claims arising from construction defects, and requires that an “action must be commenced within seven years after the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date of abandonment of construction if not completed, whichever date is earliest.”^[127]

There used to be strategic advantage in filing suit at the end of the final year because the limitation would preclude defendants from bringing counterclaims, cross-claims, or third-party actions, but the legislature put an end to that on July 1, 2018, when it added language that extended the period for such claims by a year after the pleading to which they relate.^[128]

The legislature also addressed the question of whether a 558 notice constituted an “action.” In one case, owners discovered a defect near the end of the limitation period and served notice on the contractor in accordance with Ch. 558. The contractor waited until the limitation time had expired and then informed the owners that it would not cure the alleged defect.^[129] The contractor then won on summary judgment, only to have appellate court hold that serving the 558 notice constituted an “action” and that the owners’ lawsuit was, therefore, not time barred.^[130] Before the Florida Supreme Court could hear the matter,^[131] the legislature stepped in and, in July of 2019, added language to §558.004 that explicitly states that a 558 notice does not serve to toll the statute of repose.

Conclusion

Any system of controls is subject to updates and revisions, and the statutes affecting Florida construction are no exception. Florida law requires the code to be updated every three years, based on a review of the “most current updates of the International Building Code, the International Fuel Gas Code, the International Existing Building Code, the International Mechanical Code, the International Plumbing Code, and the International Residential Code.. . and the National Electrical Code, which is copyrighted and published by the National Fire Protection Association.”^[132] The latest version, the 2023 code, went into effect on December 31, 2023.^[133] Any local jurisdiction may make technical amendments to the code, but they must be more stringent than the code, and the local government must provide a fiscal impact statement,^[134] in keeping with the code’s dual emphasis on safety and affordability.^[135]

Similarly, the statutes themselves are also regularly amended, albeit not on a specified schedule as with the code. Chapter 713 was recently amended to increase the threshold contract amount for a notice of commencement from $2,500 to $5,000,^[136] to require notarized signatures on liens satisfactions,^[137] and to allow prevailing party fees on a lien action, even if that lien has been transferred to security.^[138] The statute of repose was recently reduced from 10 years to seven,^[139] and §718’s 2023 amendments include milestone inspections and strategic reserve requirements in response to the Surfside Champlain Towers South condominium collapse.^[140] The ability of local jurisdictions to require licenses for work that does not correspond to the activities of a contractor as such are defined in Ch. 489 has been phased out.^[141] Accordingly, there can no longer be local licensing requirements for non-structural interior remodeling, cabinetry, handyman services, and painting.