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New legislation that the Florida lawmakers passed and Governor Ron DeSantis approved earlier this year addresses payments by contractors to their subcontractors. The law, which will take effect on July 1, 2026, establishes prohibitions against nonpayment.
Florida Statutes Section 489.1295 now reads:
(1) A licensed contractor must compensate a subcontractor or supplier, unless there is a bona fide dispute regarding the amount due, if any, for services, labor, or materials:
(a) Within 45 days after receiving payment for the services 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.
(2) A licensed contractor who knowingly or willfully violates this section is subject to disciplinary proceedings as provided in s. 489.129.
Section 489.1295 directly affects the pay when paid provisions in subcontract agreements for private construction projects. Such pay when paid provisions require the contractor to pay the subcontractor within a certain number of days from the receipt of payment from the owner. This new law establishes that if the subcontract is silent on the timing for payment to the subcontractor, then the 45-day period will govern. As a result, contractors and subcontractors should review current pay when paid provisions in their subcontract agreements to ensure compliance with Section 489.1295 and include a specific timing aspect.
In addition, Chapter 489 does not define what constitutes a bona fide dispute. For the parties to protect their financial interests and avoid litigation and claims of lien, the parties should define bona fide dispute in the subcontract agreement and include formal written notice procedures to such effect as well as specific actions to cure the bona fide dispute. Grounds for a bona fide dispute may include defective work not remedied by the subcontractor or failure of the subcontractor to make payment to suppliers for labor, materials, or equipment. Notwithstanding the foregoing, the contractor should continue to pay all undisputed amounts due to the subcontractor.
In conclusion, Section 489.1295 establishes new express statutory rights protecting subcontractors. Accordingly, Section 489.1295 should reduce the number of claims of lien recorded by subcontractors. Overall, the Florida Legislature has extended the protections of prompt payment to subcontractors for private construction projects similar to its actions codified in Chapter 218 for government construction projects.