{"id":906143,"date":"2026-09-22T16:34:43","date_gmt":"2026-09-22T22:34:43","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=906143"},"modified":"2026-09-22T16:34:46","modified_gmt":"2026-09-22T22:34:46","slug":"payment-disputes-new-florida-law-adds-licensing-risk","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/payment-disputes-new-florida-law-adds-licensing-risk\/","title":{"rendered":"New Florida Law Adds\u00a0Licensing Risk to Contractor\/Subcontractor Payment Disputes"},"content":{"rendered":"\n<p>Brett J. Moritz and Ali Heyat | <a href=\"https:\/\/www.pecklaw.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Peckar &amp; Abramson<\/a><\/p>\n\n\n\n<p>Effective July 1, 2026, Florida\u2019s newly enacted Section 489.1295 of the Florida Statutes, titled \u201cProhibition Against Nonpayment,\u201d requires licensed contractors to timely compensate subcontractors and suppliers for labor, services, or materials. Enacted as part of Senate Bill 290 (Ch. 2026-3, Laws of Fla.), the statute adds a new basis for instituting disciplinary proceedings against a contractor\u2019s license if a payment is knowingly or willfully withheld.<\/p>\n\n\n\n<p>While this is not a sweeping overhaul of Florida construction payment laws by any means, contractors should be aware that <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/game-changer-subcontractors-payment-disputes\/\">nonpayment disputes<\/a> with subcontractors and suppliers may carry potential licensing consequences.<\/p>\n\n\n\n<p><strong>What the New Law Requires<\/strong><\/p>\n\n\n\n<p>Specifically, Section 489.1295 provides that a licensed contractor must compensate a subcontractor or supplier, unless there is a bona fide dispute regarding the amount due, either:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Within 45 days after receiving payment for the subcontractor\u2019s or supplier\u2019s work or materials; or<\/li>\n\n\n\n<li>In accordance with the terms of the contract for such labor, services, or materials.<\/li>\n<\/ol>\n\n\n\n<p>A licensed contractor who knowingly or willfully violates this section is subject to disciplinary proceedings under Section 489.129, Fla. Stat. Available sanctions include fines up to $10,000 per violation, required restitution, probation, suspension, or revocation of the contractor\u2019s license.<\/p>\n\n\n\n<p><strong>Why It May Be Less Alarming Than It Sounds<\/strong><\/p>\n\n\n\n<p>The statute includes two important carve-outs that significantly limit its reach:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Bona Fide Dispute Exception.<\/strong>\u00a0The contractor\u2019s obligation to pay does not apply where a \u201cbona fide dispute\u201d exists regarding the amount due. Although the statute does not define \u201cbona fide dispute,\u201d contractors should treat the phrase as referring to a genuine, good-faith dispute over whether the amount is actually owed. In practical terms, that means the withholding should be tied to a real issue, such as defective or incomplete work, disputed change orders, back charges, missing closeout or lien documentation, or another contract-based reason for withholding payment. To establish this defense, contractors should carefully document the dispute when it arises, including the specific amount being withheld, explain the basis for the withholding, and continue paying any undisputed amounts on time.<\/li>\n\n\n\n<li><strong>Contract Terms Control.<\/strong>\u00a0The statute also provides that payment must be made either within \u201c45 days after receiving payment\u201d or \u201cin accordance with the terms of the contract.\u201d The language of the statute now means that contract language will be extremely important, especially as it relates to any \u201cpay-when-paid\u201d and \u201cpay-if-paid\u201d provisions. A pay-when-paid clause typically means that a subcontractor will be paid within a \u201creasonable time\u201d from completion of its work on the project, while a true pay-if-paid clause contemplates owner payment as a strict condition that must occur before the contractor is obligated to pay the subcontractor or supplier. Under Florida law, risk-shifting payment language generally must be clear, unambiguous, and consistent with the contract documents. The new statute does not appear to eliminate properly drafted payment conditions, but it gives contractors a new reason to make sure payment timing, withholding rights, dispute procedures, and cure requirements are stated clearly. If the subcontract is silent or unclear, contractors may face greater risk that the statute\u2019s 45-day timing rule will control.<\/li>\n<\/ul>\n\n\n\n<p><strong>Best Practices for Contractors<\/strong><\/p>\n\n\n\n<p>Although this statute includes some carve-outs for contractors, contractors should use this opportunity to review their current practices and contract documents to ensure they are protected.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Review subcontract payment clauses<\/strong>\u00a0to confirm that pay-if-paid or pay-when-paid language is clear, unambiguous, and consistent with prime contract terms. We also recommend reviewing withholding language to ensure these provisions provide adequate assurances in the event of non-performance.<\/li>\n\n\n\n<li><strong>Document bona fide disputes in writing<\/strong>\u00a0at the time they arise, identifying the amount withheld, the reason, and the contractual basis. Vague or after-the-fact justifications will look less like good-faith disputes. We recommend including the exact \u201cbona fide dispute\u201d language from the statute in any letters or other correspondence with subcontractors and suppliers.<\/li>\n\n\n\n<li><strong>Track owner payments against subcontractor obligations<\/strong>\u00a0so your accounting records can demonstrate when funds were received and when downstream payments were made.<\/li>\n\n\n\n<li><strong>Train project managers<\/strong>\u00a0that withholding subcontractor or supplier payments after receiving owner funds now carries potential licensing exposure, not just contract risk.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 801.641.8304, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brett J. Moritz and Ali Heyat | Peckar &amp; Abramson Effective July 1, 2026, Florida\u2019s newly enacted Section 489.1295 of the Florida Statutes, titled \u201cProhibition Against Nonpayment,\u201d requires licensed contractors to timely compensate subcontractors and suppliers for labor, services, or materials. Enacted as part of Senate Bill 290 (Ch. 2026-3, Laws of Fla.), the statute&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/payment-disputes-new-florida-law-adds-licensing-risk\/\">Continue reading <span class=\"screen-reader-text\">New Florida Law Adds\u00a0Licensing Risk to Contractor\/Subcontractor Payment Disputes<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,12,94,9802],"class_list":["post-906143","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-construction","tag-florida","tag-payment-disputes","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Florida Law Adds\u00a0Licensing Risk to Contractor\/Subcontractor Payment Disputes - Advise &amp; 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