Can Florida Contractors Collect Deposits Before Pulling a Permit?

Yes, but once the deposit crosses a specific threshold, Florida law puts you on a tight clock.

Florida Statute 489.126 doesn’t prohibit collecting a deposit before pulling a permit. What it does is set mandatory deadlines that kick in the moment an initial payment exceeds 10 percent of the contract price on a residential job. Miss those deadlines without just cause and you may be looking at more than a licensing issue. Florida law allows violations of §489.126 to be prosecuted as theft.

What the 10 percent threshold triggers

When a contractor receives, as initial payment, money totaling more than 10 percent of the contract price for repair, restoration, improvement, or construction to residential real property, two deadlines start running:

30 days to apply for permits. From the date payment is received, the contractor has 30 days to apply for all permits required for the work. If the work doesn’t require a permit under applicable codes, this deadline doesn’t apply.

90 days to start work. Once all required permits are issued, the contractor has 90 days to start work.

Both deadlines apply unless the contractor has just cause for the delay, or the homeowner agrees in writing to a longer timeline.

The mid-project rule

The statute doesn’t only apply to the initial deposit. Under §489.126(3), a contractor who has received money in excess of the value of work performed cannot fail to perform any work for any 90-day period without just cause. A job that stalls mid-project, while the contractor is holding more money than work has been done, carries the same theft exposure as a job that never started.

What “just cause” means in practice

The statute gives contractors a just cause defense, but it’s not a blank check. If a homeowner sends a written demand via certified mail to the address listed in the contract, for permit application, work to start, or a refund, and the contractor fails to comply within 30 days of receiving that demand, it can be inferred that just cause does not exist.

Document everything. Permit application submissions, correspondence with the building department, reasons for any delays. If a dispute arises, the paper trail is what separates just cause from a criminal inference.

The criminal exposure

Violating §489.126 isn’t a licensing issue. It’s theft. The statute routes violations directly to Florida Statute 812.014, and the penalties scale with the amount received:

One thing the statute makes explicit: intending to return the money is not a defense. If the deadlines are missed and a demand goes unanswered, intent doesn’t matter.

This applies to unlicensed contractors too

§489.126 defines “contractor” to include any person performing or promising to perform construction work — without regard to whether that person holds a license. An unlicensed person who collects a deposit and doesn’t pull permits or start work on time faces the same criminal exposure as a licensed contractor.

What this means for how you structure deposits

Florida law doesn’t cap the deposit amount on residential work. What the law controls is what happens after the money is collected. The 10 percent threshold in §489.126 is the trigger point for the permit and work deadlines. How you structure your payment schedule relative to that threshold is a question worth discussing with a construction attorney before you land on a standard approach.

Either way, keep a clear record of when payments were received, when permits were applied for, and when work started. Good documentation can become critical if a dispute ever arises.

This article is for general informational purposes only and does not constitute legal advice. Requirements can change. Consult a qualified attorney for guidance specific to your situation.