A Florida subcontractor agreement is a written contract between a general contractor and a specialty or trade subcontractor that has to do more than describe the work: it has to line up with a dense set of Florida statutes governing lien rights, prompt payment, retainage, workers’ compensation, indemnification caps, and construction-defect procedures. Miss a deadline the statute imposes, or leave out a clause the statute requires, and a provision that reads fine on paper can be unenforceable, or worse, expose the contractor above to liability the subcontract was supposed to shift downstream.
What follows is what the agreement needs to cover, and the Florida rules that shape each piece.
Scope of Work and Change Orders
Identify both parties by full legal name and address, then describe the work in enough detail that neither side can later argue about what was included. Spell out labor, materials, and equipment. Set firm start and completion dates with milestones for major phases. If a prime contract governs the project, incorporate it by reference so the subcontractor is bound to the same specifications and deadlines the owner imposed on the general contractor.
Change orders need their own clause. Any change in scope, price, or schedule should require a written amendment signed by authorized representatives before the changed work begins. Say who can approve changes, what documentation supports added costs, and what happens if work proceeds without a signed order. Written notice deadlines matter here: many contracts require the subcontractor to request a change order within a fixed window after the triggering condition, and missing that window can forfeit the right to extra pay.
Payment Terms and Prompt Payment
State the price structure plainly, whether lump sum, unit price, or time and materials. Set the payment schedule, the documentation required with each pay application, and the process for disputing an invoice.
On private projects, Florida’s prompt payment law puts real teeth behind these terms. Once the subcontractor is entitled to payment under the contract, has submitted a proper request, and the contractor above has been paid, the money is due. If it isn’t paid within 14 days, interest accrues at the rate set by Florida law plus an additional 12 percent per year.1Online Sunshine. Florida Code 715.12 – Prompt Payment
Public projects with local government entities run on a stricter clock. Payment is generally due within 20 to 25 business days after the government receives the request, depending on whether an agent must approve it first. Late payments accrue interest at 2 percent per month or the contract rate, whichever is higher.2Online Sunshine. Florida Code 218.735 – Timely Payment for Purchases of Construction Services
Retainage
Retainage is the portion of each progress payment held back until the project is complete. On private work, 10 percent is standard, and the parties can negotiate a different figure because Florida sets no statutory cap for private projects. Specify the percentage, the conditions that trigger release, and whether the rate steps down after a certain completion threshold.
Public projects are capped. Florida limits retainage to 5 percent of each progress payment on public construction contracts over $200,000.3Online Sunshine. Florida Code 255.078 – Retainage Retainage a contractor receives from a public entity that’s attributable to a specific subcontractor’s work has to be passed through promptly.
Separately, Florida’s lien law requires the owner to hold the final payment under the direct contract until the contractor delivers a final affidavit listing all unpaid lienors.4Online Sunshine. Florida Code 713.06 – Liens of Persons Not in Privity With Owner The subcontract should address how this statutory retention interacts with contractual retainage so the two don’t collide at closeout.
Lien Rights and Notice to Owner
Chapter 713 is the backbone of subcontractor payment protection in Florida. A subcontractor who isn’t in direct contract with the owner can lien the property for unpaid work, but only by following strict notice rules.
The 45-Day Notice to Owner
Before perfecting a lien, the subcontractor must serve a Notice to Owner identifying itself, the property, and the work or materials being furnished. The notice must be served before work starts or no later than 45 days after first providing labor, services, or materials. Missing that window is a complete defense to enforcing the lien.4Online Sunshine. Florida Code 713.06 – Liens of Persons Not in Privity With Owner Good subcontract language pushes the subcontractor to serve the notice as soon as work begins rather than run down the clock.
The 90-Day Claim of Lien
If payment doesn’t come, the claim of lien itself must be recorded no later than 90 days after the subcontractor last furnishes labor, services, or materials.5Online Sunshine. Florida Code 713.08 – Claim of Lien Both deadlines are hard cutoffs. A contractor who pays a subcontractor that never served a proper Notice to Owner can still face liability from other lienors on the project, so tracking notice compliance protects everyone in the chain.
Lien Waivers and Releases
The agreement should require the subcontractor to execute a partial waiver with each progress payment and a final waiver when the last payment is made. Florida law provides statutory forms for both, and no party can require a waiver that differs from those forms.6Online Sunshine. Florida Code 713.20 – Waiver and Release of Liens Custom waiver forms that try to reach beyond the statute are a common drafting mistake.
Two protections are built in: a subcontractor cannot waive lien rights in advance, and a waiver given in exchange for a check can be conditioned on the check actually clearing.6Online Sunshine. Florida Code 713.20 – Waiver and Release of Liens Any clause attempting a blanket advance waiver is unenforceable.
Pay-If-Paid and Pay-When-Paid Clauses
A few words in this clause can flip who bears the risk when an owner doesn’t pay.
A pay-if-paid clause makes the owner’s payment to the contractor a condition that must occur before the subcontractor is owed anything. Florida courts enforce these, but only when the language is unmistakably clear that the parties intended to shift the risk of owner nonpayment to the subcontractor. Using “condition precedent” and explicitly stating that the subcontractor assumes that risk is how the clause holds up.
Vague language, or language that just ties timing to when the contractor gets paid, is treated as a pay-when-paid clause. That’s a different result: the contractor must pay within a reasonable time regardless of whether the owner ever pays. Florida has no statute specifically addressing enforceability of these clauses; the distinction comes from case law, including the Florida Supreme Court’s decision in DEC Electric, Inc. v. Raphael Construction Corp., which held that ambiguous conditional payment language sets only a reasonable time for payment rather than eliminating the payment obligation.
Even a valid pay-if-paid clause cannot eliminate the subcontractor’s right to file a lien or claim against a payment bond. Those rights exist under statute and cannot be waived in advance.6Online Sunshine. Florida Code 713.20 – Waiver and Release of Liens
Workers’ Compensation and Insurance
Florida’s workers’ compensation rules are stricter for construction than for other industries. A construction employer with even one employee must carry coverage, versus a four-employee threshold in non-construction industries.7Online Sunshine. Florida Code 440.02 – Definitions If a subcontractor fails to carry coverage, the general contractor becomes liable for workers’ comp benefits to the subcontractor’s employees and can pursue the subcontractor for everything paid, plus interest.8Florida Senate. Florida Code 440.10 – Liability for Compensation
There’s a narrow exception. Corporate officers and LLC members who own at least 10 percent of the company can apply for a construction industry exemption. No more than three officers per corporation or affiliated group can hold one at a time. The contractor should verify each exemption by pulling a copy of the certificate or confirming it through the Division of Workers’ Compensation database.8Florida Senate. Florida Code 440.10 – Liability for Compensation
Beyond workers’ comp, the agreement should require general liability coverage at specified limits, name the general contractor and property owner as additional insureds, and require certificates of insurance before mobilization.
Indemnification: Get the Dollar Cap Right
Florida imposes hard limits on indemnification in construction contracts. Any indemnification provision is void and unenforceable unless the contract contains a monetary limitation on the indemnification that bears a reasonable commercial relationship to the contract value. For parties in direct contract with the owner, that cap cannot be less than $1 million per occurrence unless both sides agree otherwise.9Florida Senate. Florida Code 725.06 – Construction Contracts; Limitation on Indemnification
A clause missing the required cap isn’t just partially limited; it’s entirely unenforceable. The statute also blocks indemnifying a party for damages caused by its own gross negligence, willful misconduct, or statutory violations, unless those damages actually resulted from the subcontractor’s own actions.9Florida Senate. Florida Code 725.06 – Construction Contracts; Limitation on Indemnification
Public construction contracts follow a different standard: indemnification is limited to liability caused by the indemnifying party’s own negligence, recklessness, or intentional wrongdoing.9Florida Senate. Florida Code 725.06 – Construction Contracts; Limitation on Indemnification
Licensing and Worker Classification
Contractor Licensing
Florida requires state certification or registration for contracting work but carves out an exception for subcontractors working under a licensed contractor’s supervision. The work must fall within the scope of the supervising contractor’s license, and that contractor takes responsibility for it. The exception does not extend to specialty trades: electrical, plumbing, roofing, mechanical, and air conditioning work all require the subcontractor’s own license.10Online Sunshine. Florida Code 489.113 – Qualifications for Practice; Restrictions
In fact, a general contractor must subcontract specialty trade work unless the contractor holds a license in that specific trade category.10Online Sunshine. Florida Code 489.113 – Qualifications for Practice; Restrictions The subcontract should require proof of all applicable licenses before the subcontractor mobilizes.
Independent Contractor Status
The agreement should establish the subcontractor as an independent business, not an employee. The IRS evaluates behavioral control, financial control, and the nature of the relationship.11Internal Revenue Service. Independent Contractor (Self-Employed) or Employee? No single factor decides it, but the more control the general contractor exercises over the subcontractor’s methods, schedule, and tools, the more the relationship looks like employment. Misclassification triggers back taxes, penalties, and unpaid-benefit liability.
Warranties and Construction-Defect Liability
Warranty Provisions
Require the subcontractor to warrant its work and materials as free from defects and conforming to the contract documents for a stated period. One year after substantial completion is the industry standard. Specify how the subcontractor must respond to defect claims, the timeline for beginning repairs, and who bears remediation costs.
Statute of Limitations and Repose
Florida gives an owner or contractor four years to sue over a construction defect, measured from the certificate of occupancy or certificate of completion. For hidden defects that aren’t immediately discoverable, the clock starts when the defect is found or should have been found through reasonable diligence. The absolute outer limit is seven years from the certificate of occupancy or completion.12Online Sunshine. Florida Code 95.11 – Limitations Other Than for the Recovery of Real Property A subcontractor’s exposure isn’t permanent, but it runs well past any typical one-year warranty.
Presuit Notice Under Chapter 558
Before suing over a construction defect, the claimant must serve written notice on the responsible contractor or subcontractor at least 60 days in advance. After receiving notice, the subcontractor has 30 days to inspect and 45 days to respond with an offer to repair, a settlement offer, or a written refusal to act.13Online Sunshine. Florida Code 558 – Construction Defects The subcontract should reference these requirements and set out how the parties will cooperate during the presuit period.
Dispute Resolution
Set out how disputes get resolved before anyone files suit. A tiered clause is common: direct negotiation first, mediation next, then binding arbitration or litigation. Mediation resolves most construction disputes faster and cheaper than a courtroom fight and is a standard mandatory first step in Florida subcontracts.
A binding arbitration clause waives the right to a jury trial, and arbitration awards are very hard to overturn on appeal. If arbitration is chosen, specify the governing rules, arbitrator selection, cost allocation, and venue. If the parties prefer to litigate, identify the Florida county where any lawsuit must be filed.
Termination and Force Majeure
Termination for Cause and for Convenience
Termination for cause lets either party end the contract when the other commits a material breach: abandoning the work, failing to pay, delivering consistently defective work. Before termination takes effect, the breaching party should get written notice and a defined cure period.
Termination for convenience lets the general contractor end the contract without any breach by the subcontractor. These clauses are enforceable in Florida, but the agreement must clearly set out how the subcontractor gets paid for work completed, materials purchased, and reasonable costs incurred through the termination date. Without that formula, a convenience termination invites a drawn-out payment fight.
Force Majeure
A force majeure clause excuses delays from events outside either party’s control: hurricanes, floods, government-ordered shutdowns, labor strikes not caused by the contractor. Given Florida’s hurricane exposure, the clause carries more weight here than in most states. Require prompt written notice of a qualifying event, define what qualifies, and state whether the timeline extends automatically or requires a formal change order. Without this provision, a subcontractor unable to perform because of a natural disaster can still face breach-of-contract claims.
Contract Execution
Authorized representatives of both parties must sign for the agreement to be enforceable. For a corporate or LLC subcontractor, the signer needs actual authority to bind the company. Date the agreement and, ideally, notarize it, though Florida does not require notarization for a construction contract to be valid. Each party should keep a fully executed original. Documents incorporated by reference, such as the prime contract, specifications, or insurance requirements, should be attached or identified specifically enough that both sides know what they’re agreeing to.
One boundary worth noting: for direct contracts between an owner and a contractor on residential projects of up to four units valued over $2,500, Florida requires a specific lien-law disclosure printed in bold, capitalized, 12-point type.14Florida Senate. Florida Code 713.015 – Mandatory Provisions for Direct Contracts That requirement runs to the prime contract rather than the subcontract, but a defective prime contract creates downstream problems for everyone on the project, so verify it’s been handled correctly upstream before signing on.