Business and Legal Insights

For years, Florida contractors have understood that failing to pay a subcontractor could result in a construction lien dispute or a breach of contract action. Beginning July 1, 2026, however, the stakes became significantly higher.

With the enactment of section 489.1295, Florida Statutes, the Legislature has transformed certain payment disputes from purely private matters into issues that may also affect a contractor’s professional license.

Section 489.1295, Florida Statutes, now requires a licensed contractor to compensate a subcontractor or supplier for services, labor, or materials, unless there is a bona fide dispute regarding the amount due, either (a) within 45 days after receiving payment for the work performed or materials supplied by the subcontractor or supplier, or (b) in accordance with the terms of the contract for such services, labor, or materials.

A licensed contractor who knowingly or willfully violates this section is subject to disciplinary proceedings under section 489.129, Florida Statutes.

Why This Matters

This statute changes the risk analysis for every licensed contractor doing business in Florida. Contractors must now consider potential licensing consequences in addition to contractual liability when making decisions.

If a licensed contractor intends to rely on the statute’s bona fide dispute exception, the facts supporting that decision should be documented carefully and contemporaneously. Additionally, contractors should review the payment terms in their contracts to confirm what timing controls, and they should calendar when payment is received for the relevant scope of work so the 45-day statutory deadline (or any contract-specific deadline) is not missed.

Shutts & Bowen’s attorneys are experienced in breach of contract actions and related construction disputes. Please contact a Shutts Construction attorney if you have questions related to a legal matter.