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Failure to Pay for Work Completed on Real Property May Be A Crime

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With the increase in sinkhole claims in the State of Florida there has been a rise in the payment of insurance proceeds intended to cover work being completed to improve or repair real property (land). As a result, there has also been a rise in instances where individuals have received funds from an insurance company but have nonetheless failed to pay those hard working individuals who provide improvements or repairs to their land. Under Real Property Florida law, it is a crime, under certain circumstances, for a person to refuse to pay the individuals and companies that provide work on these properties. Accordingly, those who perform such work should be aware of their rights under both civil and criminal law and under which circumstances it is appropriate to seek the intervention of law enforcement in payment disputes.

Fla. Stat. 713.345 indicates that it is a felony for a person to receive any payment for the improvement of real property if the person receiving the funds fails to apply such portion of any payment to the payment of all amounts then due and owing for services and labor which were performed on the improvement or for materials which were furnished for the improvement prior to that person’s receipt of payment. Any person who knowingly and intentionally fails to apply such a payment in accordance with the statute is guilty of the crime of misapplication of construction funds. Fla. Stat. 713.345 furthermore provides that a permissive inference that a person knowingly and intentionally committed the crime of misapplication of construction funds exists when all of the following circumstances have all been met: 1) a valid lien has been recorded against the property of an owner for labor, services or materials; 2) the person who ordered the labor, services, or materials has received sufficient funds to pay for such labor, services, or materials; and 3) the person has failed, for a period of at least 45 days from receipt of the funds, to remit sufficient funds to pay for such labor, services, or materials, except for: a) instances where funds are withheld pursuant to a bona fide dispute regarding the amount due for materials, services or labor; or b) withholding payment is undertaken in accordance with the terms of a contract.

At The Hogan Law Firm, we have experienced Real Property law attorneys who can advise you about your rights and responsibilities when there is a dispute regarding payment for construction work. If you have a question regarding such an issue, please contact one of our conveniently located offices to schedule a consultation.