Title: Homeowners' Construction Recovery Fund

Summary: Revising the surcharge funding calculation; requiring Division II contractors to participate in the Homeowners' Construction Recovery Fund; revising the eligibility conditions for recovery; revising the notice to residential property owners regarding recovery from the fund; revising the limits for payments for claims; providing limits for claims made for Division II claims, etc.

Full Text:
An act relating to the Homeowners  Construction Recovery Fund; amending s. 489.140, F.S.; revising the surcharge funding calculation; amending s. 489.1401, F.S.; requiring Division II contractors to participate in the fund; amending s. 489.1402, F.S.; revising definitions and removing obsolete definitions; amending s. 489.141, F.S.; revising the eligibility conditions for recovery; amending s. 489.1425, F.S.; revising the notice to residential property owners regarding recovery from the fund; amending s. 489.143, F.S.; revising the limits for payments for claims; providing limits for claims made for Division II claims; removing obsolete provisions; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Section 489.140, Florida Statutes, is amended to read: 489.140 Florida Homeowners  Construction Recovery Fund. There is created the Florida Homeowners  Construction Recovery Fund as a separate account in the Professional Regulation Trust Fund. The recovery fund is shall be funded out of the receipts deposited in the Professional Regulation Trust Fund from the one-half cent per square foot surcharge on building permits collected and disbursed pursuant to s. 468.631. Section 2. Subsection (3) of section 489.1401, Florida Statutes, is amended to read: 489.1401 Legislative intent.  (3) It is the intent of the Legislature that Division I and Division II contractors set apart funds for the specific objective of participating in the fund. Section 3. Section 489.1402, Florida Statutes, is amended to read: 489.1402 Homeowners  Construction Recovery Fund; definitions.  (1)  The following definitions apply to ss. 489.140-489.144: (1) (a)  Arbitration  means alternative dispute resolution entered into between a claimant and a contractor either pursuant to a construction contract that contains a mandatory arbitration clause or through any binding arbitration under the Florida Arbitration Code. (2) (b)  Board  means the Construction Industry Licensing Board. (3) (c)  Claimant  means a homeowner. (4) (d)  Contractor  means a Division I or Division II contractor performing services described in s. 489.105 (3)(a)-(q) 489.105 (3)(a)-(c).(5) (e)  Court of competent jurisdiction  means a civil or criminal court in the State of Florida, or a bankruptcy court. (6) (f)  Homeowner  means the owner of an owner-occupied residence, including a trustee based upon a trust instrument granting a person a beneficial interest for life in the residence. (7) (g)  Licensee  means a contractor, financially responsible officer, or business organization licensed under this part at the time the violation was committed. (8) (h)  Notice  means service as described in s. 455.275. (9) (i)  Residence  means a single-family residence or an individual residential condominium or cooperative unit or a residential building containing not more than two residential units in which the owner contracting for the improvement is residing or will reside months or more each calendar year upon completion of the improvement. (10) (j)  Recovery fund  means the Florida Homeowners  Construction Recovery Fund. (11) (k)  Same transaction  means a contract, or a any series of contracts, between a claimant and a contractor or qualified business, when such contract or contracts involve the same property or contiguous properties and are entered into either at one time or serially. (12) (l)  Valid and current license,  for the purpose of s. 489.141(2)(d), means a any license issued pursuant to this part to a licensee, including a license in an active, inactive, delinquent, or suspended status. (2) The following definitions apply to claims made prior to July 1, 2007, when the contract was executed and the violation occurred on or before January 1, 2005. (a) Claimant  means a natural person. (b) Licensee  means a contractor, financially responsible officer, or business organization licensed under this part at the time the violation was committed. Section 4. Subsection (2) of section 489.141, Florida Statutes, is amended to read: 489.141 Conditions for recovery; eligibility.  (2) A claimant is not qualified to make a claim for recovery from the recovery fund, if: (a) The claimant is the spouse of the judgment debtor or licensee or a personal representative of such spouse; (b) The claimant is a licensee who acted as the contractor in the transaction that which is the subject of the claim; (c) The claim is based upon a construction contract in which the licensee was acting with respect to the property owned or controlled by the licensee; (d) The claim is based upon a construction contract in which the contractor did not hold a valid and current license at the time of the construction contract; or (e) The claimant was associated in a business relationship with the licensee other than the contract at issue.; (f) The claimant has suffered damages as the result of making improper payments to a contractor as defined in part I of chapter 713; or (g) The claimant has contracted with a licensee to perform a scope of work described in s. 489.105 (3)(d)-(p). Section 5. Section 489.1425, Florida Statutes, is amended to read: 489.1425 Duty of contractor to notify residential property owner of recovery fund.  (1)  Each Any agreement or contract for repair, restoration, improvement, or construction to residential real property must contain a written statement explaining the consumer s rights under the recovery fund, except where the value of all labor and materials does not exceed $2,500. The written statement must be substantially in the following form: FLORIDA HOMEOWNERS  CONSTRUCTION RECOVERY FUND (For contracts that exceed $2,500) PAYMENT,UP TO A LIMITED AMOUNT, MAY BE AVAILABLE FROM THE FLORIDA HOMEOWNERS  CONSTRUCTION RECOVERY FUND IF YOU LOSE MONEY ON A PROJECT PERFORMED UNDER CONTRACT, WHERE THE LOSS RESULTS FROM SPECIFIED VIOLATIONS OF FLORIDA LAW BY A LICENSED CONTRACTOR,WHERE THE VALUE OF ALL LABOR AND MATERIALS EXCEEDS $2,500, AND WHERE A CLAIMANT HAS MET EACH OF THE CONDITIONS PRESCRIBED IN SECTION 489.141,FLORIDA STATUTES. PAYMENT CANNOT BE GUARANTEED.FOR INFORMATION ABOUT THE RECOVERY FUND AND FILING A CLAIM, CONTACT THE FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD AT THE FOLLOWING TELEPHONE NUMBER AND ADDRESS: (contractor s signature and date) (homeowner s signature and date) The statement must shall be immediately followed by the board s address and telephone number as established by board rule. (2)(a) Upon finding a first violation of subsection (1), the board may fine the contractor up to $500, and the moneys must be deposited into the recovery fund. (b) Upon finding a second or subsequent violation of subsection (1), the board shall fine the contractor $1,000 per violation, and the moneys must be deposited into the recovery fund. Section 6. Subsections (2) and (5) of section 489.143, Florida Statutes, are amended to read: 489.143 Payment from the fund.  (2)  A Any claimant who meets all of the conditions prescribed in s. 489.141 may apply to the board to cause payment to be made to a claimant from the recovery fund in an amount equal to the judgment, award, or restitution order or $25,000, whichever is less, or an amount equal to the unsatisfied portion of such person s judgment, award, or restitution order, but only to the extent and amount of actual damages suffered by the claimant. Payment from the fund for other costs related to or pursuant to civil proceedings such as postjudgment interest, attorney attorney s fees, court costs, medical damages, and punitive damages is prohibited. The recovery fund is not obligated to pay a any judgment, award, or restitution order, or any portion thereof, which is not expressly based on one of the grounds for recovery set forth in s. 489.141. Beginning January 1, 2005, for each contract entered after July 1, 2004, payment from the recovery fund is shall be subject to a $50,000 maximum payment for each Division I claim.Beginning January 1, 2014, for each contract entered into on or after July 1, 2013, payment from the recovery fund is subject to a $25,000 maximum payment for each Division II claim. (5) Payments for claims against a any one licensee may shall not exceed, in the aggregate, $100,000 annually, up to a total aggregate cap of $500,000 for each Division I licensee and up to a total aggregate cap of $250,000 for each Division II licensee.For a any claim approved by the board which is in excess of the annual cap per licensee,the amount in excess of $100,000 up to the total aggregate cap per licensee of $250,000 is eligible for payment in the next and succeeding fiscal years, but only after all claims for the then-current calendar year have been paid. Payments may not exceed the aggregate annual or per claimant limits under law. Beginning January 1, 2005, for each contract entered into after July 1, 2004, payment from the recovery fund is subject only to a total aggregate cap of $500,000. Section 7. This act shall take effect July 1, 2013.