Withholding Payment From a Contractor in Florida: What Owners Need to Know

Short Answer: Withholding Payment for Defective Work in Florida

Payment disputes over construction work often turn on what the contract says and what the project records show. Whether a specific withholding holds up depends on the facts, the contract terms and the documents you can produce.

Withholding is not automatically safe. A contractor can answer with a lien claim, a written demand or a lawsuit, even when you believe the work is defective. This guide covers what counts as a documented defect, how contractors respond, the deadlines that matter, how to protect your property, how to keep your own claims alive, and the mistakes that weaken an owner’s position.

Ayala Law PA focuses on construction litigation and contract disputes, including contractor and subcontractor disputes and lien foreclosure matters, in Florida courts and arbitration. Eduardo A. Maura is the responsible lawyer for this page.

What Counts as a Documented Defect

A documented defect is work that does not match the written contract, the plans, the specifications, permit requirements or accepted building practice, and you can prove it. Vague complaints rarely carry much weight. Specific, dated proof does.

Useful evidence includes dated photos and video, written notices sent to the contractor, inspection reports from licensed inspectors or engineers, permit inspection records, change orders, and text or email exchanges. Keep the originals and note when and how each item was created.

Separate three problems. A defect is work done wrong. Incomplete work is work not yet finished. A scope or price disagreement is a dispute over what the contract required or what it costs. Each leads to a different argument, so label them separately in your notices.

Keep the holdback proportionate. Tie the amount you hold back to a written repair estimate for each documented item, not to the full balance for unrelated issues. The Florida Department of Business and Professional Regulation publishes contractor licensing requirements, which matter when a contractor’s license is in question.

How a Contractor May Respond: Lien Claims and Lawsuits

Unpaid balances on construction projects can lead to disputes over the amount owed, and the contract terms and facts shape how those disputes proceed. A recorded lien can make a sale or refinance harder until the claim is resolved.

Pull copies of every notice to owner, the notice of commencement and any recorded documents. They show who may have lien rights on your project.

A contractor may also file a breach of contract suit for the balance, interest and other damages the contract and Florida law allow. Some contractors add an account stated argument. Under the Florida Supreme Court’s Ham decision, an account stated claim needs an agreement on past transactions, a fixed amount due and a promise to pay it. Be careful with written balance statements you sign or send.

Protecting the Property While the Dispute Is Pending

The most useful protection is a clean paper trail and a close review of any recorded lien. Start by reading the lien claim for its form, timing and amount, measured against Chapter 713. A claim that does not meet the statute’s requirements may be challenged.

Send a written notice that names each defect, the contract provision it breaches, the amount you withheld and the correction you request. Give the contractor a clear, dated chance to fix the work. Send it by a method that proves delivery, and keep the proof.

Keep all communication in writing. Verbal promises to “take care of it” are hard to prove later. Calendar every date the dispute triggers, from notice dates to any lien or lawsuit deadline, and keep one log in one place.

Preserving a Counterclaim for Defective Work

An owner who withholds payment may hold its own claims, such as breach of contract or the cost to correct defective work. You can raise these as a counterclaim when the contractor sues first.

Deadlines matter. Under § 95.11, an action founded on the design, planning, or construction of an improvement to real property must be commenced within 4 years after the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date of abandonment of construction if not completed, whichever date is earliest (subject to the statute’s latent-defect rule); in any event, the action must be commenced within 7 years after that date. Fla. Stat. § 95.11 reads: “(b) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date of abandonment of construction if not completed, whichever date is earliest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence.” That period is measured from whichever comes first: the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date construction was abandoned if it was never completed. Fla. Stat. § 95.11 reads: “(b) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date of abandonment of construction if not completed, whichever date is earliest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence.” With a latent defect, the clock starts when the defect was or should have been discovered. Fla. Stat. § 95.11 reads: “(b) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date the authority having jurisdiction issues a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, or the date of abandonment of construction if not completed, whichever date is earliest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence.” Suit must still be filed within seven years of that certificate or abandonment date.

Repairing completed work does not extend that period, for work within the scope of a permit and certificate. Counterclaims have their own window. Counterclaims, cross-claims and third-party claims that arise out of the conduct, transaction or occurrence set out in a pleading may be commenced up to one year after that pleading is served, even if they would otherwise be time barred.

Don’t assume a short contract deadline controls. Under § 95.03, a contract clause that sets a shorter period than the statute is void. Also check for an attorney’s fee clause. Under § 57.105, where a contract entered into on or after October 1, 1988 allows attorney’s fees to a party required to enforce it, a court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. Florida law generally enforces written arbitration agreements under § 682.02. If your contract calls for AAA arbitration, the American Arbitration Association construction rules cover filing, hearings and fees.

Common Mistakes That Weaken an Owner’s Position

Four mistakes can weaken an owner’s position in these disputes.

First, withholding the entire balance when only part of the work is documented as defective. That can invite a counterclaim and make the withholding look unreasonable.

Second, signing a final payment or release without checking it against your defect list. A release can end claims you still have, so review it first.

Third, ignoring a recorded lien or a notice until a deadline is close. Lien and lawsuit timelines run on their own schedule, not on when you feel ready.

Fourth, relying on verbal assurances. The Florida Supreme Court in St. Joe Corp. v. McIver explained that an oral contract still needs offer, acceptance, consideration and sufficient specification of essential terms. Put every fix and every promise in writing, and give the contractor a documented chance to correct the work before you take further steps.

Next Steps and Talking With Ayala Law PA

Start with four steps: gather your documents, send a clear written notice of defects, track every lien and filing deadline, and protect the property if a lien is recorded. Each step builds the record you may need later.

Ayala Law PA focuses on business litigation, including construction and contract disputes. The firm’s only office is at 1646 W Snow Ave, Tampa, Florida. Businesses in Tampa, Hillsborough County, Brandon and Riverview can contact the firm’s Tampa office to discuss a commercial or construction dispute. Eduardo A. Maura is the responsible lawyer for this page.

Under § 90.408, offers made to settle a disputed claim generally cannot be used to prove liability or the claim’s value. Talk through any partial payment proposal with that rule in mind.

Frequently Asked Questions

How long do I have to sue a contractor for defective work in Florida?