Q: In the state of FL, what is the maximum late payment interest charges a contractor can charge a client for not paying on
In the state of Florida, what is the maximum late payment interest charges a contractor can charge a client for not paying on time? On top of the interest charges can a contractor add a fixed late payment monthly fee? Example 2% late payment fee penalty plus $100.00 per month
A:
Unfortunately, as with many issues regarding construction contracts, many of the rights and remedies are derived from the written terms and conditions of the agreement itself, rather from any statutory or regulatory authority. In very general terms, Florida law provides that no combination of interest and late fees should exceed the statutory usury limits, however, the usury law provides for a number of exceptions (most notably banks, credit cards issuers, and other lenders) and varying remedies, including preventing the contractor from collecting the entire amount due under the agreement or the entirety of interest amount.
If this question is being posted by a homeowner, you may be able to receive guidance on this consumer defense issue from your local Legal Aid organization. If posted by a contractor, it would be prudent to have experienced construction/business counsel review your standard contractual terms as the risks from running afoul of usury laws can be very severe indeed.
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