How to Structure Remodel Payments in Florida

How a Florida Remodel Payment Plan Is Built

A sound Florida remodel payment plan has three parts: a deposit kept within the statutory limit, a sequence of progress draws each released against a completed and inspected milestone, and a final retainage withheld until the job passes its closing inspection. Money follows verified work; it never runs ahead of it. The mistake most homeowners make is paying on a calendar instead of on progress.

What separates Florida from a simple "pay-as-you-go" arrangement is its construction lien law. Under Chapter 713 of the Florida Statutes, a subcontractor or supplier you never hired can record a lien against your home if they are not paid — even after you have paid your general contractor in full. So a Florida payment plan is not only about pacing cash to progress; it is about making sure every dollar that leaves your hands buys a signed release of lien rights in return.

The sections below build the plan piece by piece — the deposit, the draw schedule, the two kinds of lien release, the double-payment trap, and the final retainage — then assemble them into a step-by-step workflow you can hand to your contractor before the first payment.

The Deposit and What the Law Triggers

A deposit is the first payment, made to reserve the crew and order materials before work starts. In Florida there is no hard cap on the percentage, but Florida Statutes section 489.126 attaches duties the moment a deposit crosses 10% of the contract price — which is why a deposit in that neighborhood is a sensible ceiling for most remodels.

The 10% threshold and the clock it starts

When a contractor collects an initial payment greater than 10% of the contract on a residential improvement, F.S. 489.126 requires them to apply for any necessary permits within 30 days of that payment and to begin work within 90 days of the permits being issued. Miss those windows without just cause or a written extension, and the contractor is in violation.

Why a large deposit is a red flag

A contractor who asks for a large up-front share is asking you to fund risk that should sit with them. A right-sized deposit covers genuine mobilization and no more. The first real draw should arrive only after measurable work is in place.

• Permit application. The fee and labor to pull the permits your scope requires.
• Initial materials. Long-lead or custom items a supplier needs ordered before the crew arrives.
• Crew reservation. Securing a start date on the contractor’s calendar.

If a requested deposit clearly exceeds those mobilization costs, treat the excess as a financing request — and negotiate it down into the first inspected draw instead.

Mobilization deposit

A modest first payment that funds the permit application and initial material orders. Keeping it near or under the 10% mark sidesteps the heavier obligations and penalties that attach above it.

Misapplication of funds

Under F.S. 489.126, a contractor who takes deposit money and fails to perform, or diverts construction funds, can face criminal liability — a debt that survives bankruptcy. The statute exists precisely because oversized deposits invite abuse.

Treat the deposit as the smallest payment in the schedule, not the largest. Everything after it should be earned against work you can stand in front of and see.

Building the Draw Schedule

A draw schedule is the heart of the plan: a written list of payments, each tied to a defined, completed, and — where a permit applies — inspected stage of the remodel. Each line states what must be finished before the draw is released, so the payment is a receipt for progress rather than a bet on it.

Anchor every draw to an inspected milestone

The strongest draw schedules release money on the same beats the building department uses. Permitted work in Florida moves through milestone inspections — foundation, rough-in, and final among them — governed by the building code. Aligning a draw to a passed inspection means a third party has verified the stage before you fund it.

Typical milestone draws for a remodel

• Demolition and rough-in. Released after framing changes, plumbing, and electrical rough-in pass their inspections.
• Substrate and close-in. Released after the slab is moisture-tested and prepped, and walls are closed and inspected.
• Finishes. Released as cabinetry, tile, and flooring are installed and visibly complete.
• Substantial completion. Released when the space is usable and the punch list is short and written down.

The exact milestones vary with scope, but the principle does not: no draw is released for a stage until that stage is finished and, where applicable, inspected. Our crews schedule work around these inspection points, and the permit and inspection timeline shows how the building-department calendar sets the rhythm.

Front-load the work, back-load the cash

A common failure is a schedule that pays out faster than the work is completed. By the project’s midpoint, the cumulative cash released should trail the cumulative work in place — never lead it. If a draw would leave you having paid for more than is built, the draw is too large or too early.

Lien Releases, Decoded

A lien release (or waiver) is a signed statement in which a contractor, subcontractor, or supplier gives up the right to lien your property for work already paid. Florida recognizes a specific set of statutory forms, and the differences between them decide whether your money is actually protected.

Conditional vs unconditional

A conditional waiver becomes effective only when the payment it references actually clears; an unconditional waiver is binding the instant it is signed, whether or not the check ever clears. Florida Statutes section 713.20 publishes the statutory waiver forms, and the default statutory form is unconditional.

How to sequence the two

Collect a conditional waiver before you hand over a draw — it protects the payee if the check bounces while protecting you the moment it clears. Then collect an unconditional waiver after the payment has cleared, as your permanent proof the lien right for that work is gone. Never sign or accept an unconditional release before money has actually moved.

Partial vs final

The other axis is scope. A partial lien release (also called a progress release) waives lien rights only for the work covered by that specific draw, leaving future work lienable. A final lien release waives the payee’s entire lien right for the whole job and is exchanged only for the last payment.

One hard limit applies to all four: under section 713.20, a lien right cannot be waived in advance. A release is valid only to the extent of labor, services, or materials already furnished — a blanket "I waive all future liens" clause is unenforceable in Florida.

Why a Paid Owner Still Gets Liened

This is the trap the rest of the plan is built to defeat. In Florida, a subcontractor or supplier you never hired — someone not in privity with you — can lien your home if your general contractor takes your money and fails to pay them. Paying your contractor in full does not, by itself, protect you.

The Notice to Owner and the 45-day clock

A party not in privity preserves its lien right by serving a NTO on you. Under Florida Statutes section 713.06, that notice must reach you no later than 45 days after the sender first furnishes labor, services, or materials. Every NTO you receive is a name you must clear before your money is safe.

The proper-payments defense

Section 713.06 gives owners a "proper payments" defense — but it is conditional. To use it, you must obtain a signed lien release from every subcontractor and supplier who served a Notice to Owner, each time you make a payment. Pay your general contractor without collecting those releases, and the payment may not count as "proper," leaving your home exposed to the very people you indirectly already paid.

The defense is only as strong as your paperwork. A homeowner who keeps a clean file of conditional-then-unconditional releases from the contractor and from every NTO sender is the homeowner who does not pay twice; our guide to fighting a Florida lien walks through using those records as a defense.

The Final Payment and Retainage

Retainage is the portion of each draw — commonly a single-digit percentage — you hold back and pay only at the end, plus a meaningful final payment released against the closing inspection. It is your leverage to get the punch list finished and the lien window closed before the last dollar leaves.

How large the final payment should be

The final payment should be large enough that the contractor has a real incentive to return and finish the details — not a token. A common structure withholds retainage from every draw so the accumulated holdback, combined with the final milestone draw, leaves a balance worth coming back for. The exact share belongs in your written contract.

Hold the balance to the certificate of occupancy

Release the final payment only after the work passes its final inspection — and, on permitted scopes that require one, after the jurisdiction issues a CO or certificate of completion. That document is independent proof the job met code, and it is the natural trigger for the last check and the final unconditional release.

Mind the 90-day lien clock

Under Florida Statutes section 713.08, a claimant has 90 days from final furnishing to record a Claim of Lien. Florida courts have held that punch-list items, cleanup, and warranty work do not extend that clock — the deadline runs from the last substantial work. Lining the final unconditional releases up with that window is what closes the book on the job.

The Payment Workflow, Step by Step

Here is the whole plan assembled into a repeatable sequence. Put it in writing before the first payment and run every draw through it. The contract itself must carry the statutory lien warning — on direct contracts above the statutory threshold for one-to-four-unit dwellings, Florida Statutes section 713.015 requires it in 12-point boldface.

Run every Florida remodel through these six steps and the double-payment trap closes on its own. A licensed contractor who builds this discipline in is doing more than collecting money — our general contracting team ties each draw to an inspected milestone, our permit handling keeps those inspections on schedule, and on larger jobs the same workflow governs every whole-home renovation we run. The goal is simple: you should always be able to point to finished, inspected work behind every dollar you have paid.