Florida Contractor Deposits: What Happens When You Collect More Than 10% Up Front?

Florida doesn’t cap how much a contractor can collect as a deposit. There’s no $1,000 limit, no 10% ceiling, no maximum. A contractor can legally ask for 50% up front if the homeowner agrees.

But once that deposit exceeds 10% of the contract price, the law starts the clock.

Is a deposit and down payment the same thing?

Contractors often use the terms “deposit” and “down payment” interchangeably, and in most residential construction contracts they refer to the same thing: money collected before work begins. Whatever you call it, Florida Statute 489.126 doesn’t care about the label. It cares about the amount.

What Florida Statute 489.126 Actually Says

The statutory language is direct. Once a contractor receives an initial payment that exceeds 10% of the contract price, Florida Statute 489.126 applies. Specifically, under § 489.126(2)(a), a contractor who receives as initial payment money totaling more than 10 percent of the contract price for repair, restoration, improvement, or construction to residential real property must:

• Apply for all necessary permits within 30 days of receiving the payment
• Start work within 90 days of permits being issued

Miss either deadline without just cause or a written agreement from the homeowner extending the timeline, and the contractor may be subject to prosecution for theft under Florida law. Not a contract dispute. Theft. The statute was designed to prevent contractors from collecting large upfront payments and then failing to obtain permits or begin work.

Why Many Florida Contractors Still Collect More Than 10%

Materials often need to be ordered before work begins. Cabinets, windows, trusses, roofing materials, HVAC equipment, and custom products frequently require significant deposits from suppliers before a job kicks off.

Florida law doesn’t prohibit larger contractor down payments. It simply requires contractors who collect them to move the project forward within the timelines established by FS 489.126. A 30% deposit on a custom kitchen isn’t illegal. Missing the permit deadline after collecting it is.

The 10% Threshold in Practice

Florida’s 10% figure isn’t a deposit cap. It’s a trigger. Below it, no statutory obligations attach to the construction deposit. Above it, the clock starts when the contractor receives the payment.

On a $40,000 kitchen remodel, a $4,000 deposit sits right at the threshold. $4,001 and the permit and start deadlines apply. On a $200,000 addition, a $20,000 deposit crosses it immediately.

There’s no fixed dollar amount that avoids the statute. The threshold is always based on the total contract price.

The Permit Deadline

Thirty days from the date payment is received. Not thirty days from when the contract is signed. From when the money lands.

If the job doesn’t require permits under applicable codes, this deadline doesn’t apply. Most residential work does.

The Start-Work Deadline

Ninety days from the date permits are issued. The clock on this one doesn’t start until permits come through, but it runs regardless of how backed up your schedule is.

A contractor who collects a large upfront payment in January, gets permits in February, and hasn’t broken ground by May has a problem.

Just Cause and Written Extensions

The statute carves out two ways to avoid liability for missing the deadlines. First, just cause: a legitimate reason for the delay that a court would accept. Second, a written agreement with the homeowner extending the timeframe.

The written agreement is the only one you control. Get it before the deadline, not after. A homeowner who agrees verbally to wait longer provides no protection once they decide they want their money back.

What Happens When the Law Is Violated

A contractor who takes a deposit over 10% and misses the permit or start-work deadlines without just cause or written extension may be subject to prosecution for theft under Florida Statute 489.126(4). The statute applies to every contractor who performs or promises to perform covered work. Unlicensed contractors are not exempt.

Structuring Deposits to Protect Yourself

A large up-front payment on a residential job is a legal commitment to perform on a specific timeline, not just a financial arrangement.

• Keep initial deposits at or below 10% of the contract price unless you’re ready to apply for permits within 30 days
• If you need more than 10% up front for materials or mobilization, get a written agreement with the homeowner extending the permit and start deadlines
• Tie subsequent payments to completed milestones, not arbitrary dates
• Put every payment term in writing before work begins

Cinderblock lets Florida contractors set up milestone-based payment schedules on estimates and invoices before they go out. Your deposit amount and payment terms are spelled out on every job, every time.

This article is for general informational purposes only and does not constitute legal advice. Licensing and registration requirements can change. Verify current requirements directly with the Florida Department of Business and Professional Regulation or consult a licensed attorney.