2023 is poised to be a year full of changes for contractors working in Florida, regardless of the type of work you are performing. There are important changes to laws affecting contracting and licensing that take effect in 2023 or complete implementation in 2023. Here are the three most critical changes contractors should be aware of and what they can do to prepare for them.
Local Licensing Goes Away (Mostly)
Last year, Florida’s legislature passed a law that eliminates nearly all local licenses, and expressly reserves contractor licensing to the state. You can read my original article on it with all the details by clicking here. Under the statute, local licenses are eliminated effective July 1, 2023. The biggest impact will be for contractors who do not have a state license and do not need one for their work. The biggest challenge will be figuring out how your local municipality is managing this change. Some are taking the position that licenses will be required to pull permits, while others are not. Some are taking the position that they can still enforce various local licensing ordinances, while others are not. I anticipate there will be multiple legal challenges as the final implementation of the statute is rolled out. But in the meantime, you should consult with your local building departments and licensing boards to see how they plan to finalize the rollout of the statute.
Assignment of Benefits Agreements Go Away (Mostly)
Very recently, the state of Florida passed a law eliminating the ability of homeowners to assign insurance benefits to a contractor in exchange for repairs being made to their home unless the relevant policy was issued between July 1, 2019 and January 1, 2023. Assignment agreements for policies outside that timeline are unenforceable. You can read my full write up on the statute by clicking here. You can also read my broader write up on what the last two years of statutory changes mean for assignment agreements for contractors in general by clicking here. Contractors who rely on payments from insurance carriers and those who use assignment agreements need to be fully prepared to comply with this new statute.
Preparing for Further Economic Slow Downs
It feels like people have been saying the economy was going to fall off a cliff since 2019. And while things have slowed down recently, COVID-19 and massive supply chain issues didn’t seem to fully derail it. Regardless, as we head into 2023, with more warnings of economic uncertainty, its a good time to (1) make sure you are sending notices to owner early and often, and (2) updating your contracts to make sure you are as protected as possible in the event a project goes sideways. Sending a notice to owner on a project early is critical, because while you may be sending it when times are good and the project is going well, by the time something takes a downturn, it may be too late and you will have no lien rights. Annually reviewing and updating your contracts is a good habit to be in under any circumstances, and economic uncertainty is definitely a good opportunity to clean things up. If you have questions about either one of these things, or need to get your staff up to speed on managing notices to owner and liens properly, please don’t hesitate to reach out.
Hopefully 2023 continues to be another great year for Florida and its construction industry!