Florida’s Right to Rescind: When Can You Terminate a Construction Contract
When the exciting construction project you envisioned isn’t unfolding as planned, you need to know your options for backing out of the contract. However, how can you terminate a contract if you’ve already signed an agreement? Fortunately, Florida law provides homeowners the right to rescind certain construction projects, which allows you to terminate the contract within three business days. Below, our Orlando construction lawyer discusses how Florida’s right to rescind law works and when it can be used to back out of a construction contract.
What’s Florida’s Right to Rescind Law?
Florida Statute 520.72 gives homeowners and contractors the right to cancel contracts for specific construction or home improvement projects as long as they provide a cancellation notice by midnight on the third business day after the contract is signed. This law applies to projects valued over $500 to be completed by a licensed and insured contractor, finance seller, or home improvement seller.
What is Required to Enact Your Right to Rescind?
According to the law, contractors and home improvement sellers must notify you of your right to rescind when you sign the contract. This notice must be provided for eligible projects by a finance or home improvement seller, including mortgage lenders, licensed contractors, or handymen (as long as the person completed at least two projects totaling over $500 within the past calendar year). To enact your right to rescind, you must first have a legally binding contract with a licensed finance or home improvement seller. The agreement must specify the scope of work, project cost, and payment and completion timelines. When executing your right to rescind, you must provide the contractor with a written notice of your intent (such as email, fax, or text) to cancel by midnight on the third business day after signing the contract. You must also send a written notice through registered mail. After giving this notice, you’re not responsible for damages and materials for that project.
When Can You Envoke Your Right to Rescind?
Only certain home improvement projects and home loans qualify for the right to rescind. A home improvement project must be a repair, replacement, alteration, addition, conversion, or modernization of any land or building that is a single-family residence. Home Equity Loans, Home Equity Lines of Credit (HELOC), mortgage refinances, and reverse mortgages also qualify for the right to rescind. Your construction lawyer in Orlando can help determine whether your contract allows for the right to rescind.
What Doesn’t Qualify for the Right to Rescind?
New home construction and new home purchase loans do not qualify for the right to rescind. New home warranty claims are also ineligible. You also don’t qualify for the right to rescind if your initial contract wasn’t in writing and the contractor wasn’t licensed. If the contractor isn’t licensed, you can immediately terminate the contract without giving an official warning or notice.
How Many Days Do You Have to Rescind a Construction Contract?
You can invoke your right to rescind until midnight on the third business day after you signed the contract. Federal holidays and weekends don’t count toward the deadline. For example, if you signed a home improvement contract on Thursday, you can cancel the contract until 11:59 pm on Tuesday. However, it’s important to have an Orlando construction lawyer review your contract to ensure you enact your right to rescind legally.
How to Terminate a Contract After the Right of Rescind Period Ends
You may still be able to back out of a construction contract even after the right to rescind period ends. You can terminate a contract if the contractor fails to complete the agreed-upon work, doesn’t complete the project fully, or engages in fraud. However, these circumstances can be complex and confusing, so it’s essential to contact an Orlando construction lawyer to help you determine your options to get out of a contract after the cancellation period ends.
For Contractors: How to Protect Your Business From Right to Rescind
Customers can cancel construction projects for eligible projects if they follow the correct procedures to enact their right to rescind. The best way to ensure your project moves forward as expected is to create legally binding contracts so the customer is aware of all aspects of the project, including their right to rescind as required by Florida law. It’s vital to have an experienced Orlando construction lawyer review your work contracts to ensure your business is protected.
Terminate a Construction Contract with Boutty Law Firm: Construction Attorneys in Orlando
Orlando construction lawyer Benjamin Shane Boutty has over 20 years of experience in the construction industry. He now helps contractors and homeowners throughout Florida with complex construction-related legal issues, such as the right to rescind, drafting contracts, removing property liens, and settling construction disputes. Call our new office location in Sanford at 407-622-1395 or schedule a free online consultation to see how we can help you navigate the legal issues surrounding your construction project.
