What Documents Must a Florida Contractor Maintain?
Construction is a document intensive activity. Projects can generate thousands of pages of contracts, emails, plans, specifications, submittals, shop drawings, change orders and work directives. All of these documents help the parties communicate the expectation of the project and reflect the parties’ intent. There is an underlying public policy that documents generated during a construction project be maintained. Many times, a contractor will “lose” or “destroy” project records prematurely, thus making make it more difficult to determine the directions and instruction given to project participants. It also makes it more challenging to defend against a payment dispute or defective construction claim. Litigation considerations aside, if a Florida licensed contractor fails to keep certain records, it can result in contractor discipline through the DBPR. Overall, this post will cover the requirements of Florida contractors to maintain business and financial records.
The statute on this requirement is very clear. Section 489.124, Florida Statutes provides that all contractors who are registered or certified under Chapter 489 must maintain complete business and financial records for the immediately preceding 3 years.
The business and financial records to be maintained are listed in the statute as:
- Minutes of corporate meetings
- Business contacts
- Telephone records
- Insurance policies
- Letters of complaint
- Notices received from government entities
- Bank statements
- Canceled checks
- Records of accounts receivable and payable
- Financial statements
- Loan documents
- Tax returns
- All other business and financial records the contractor maintains in the regular course of business.
It is a little peculiar that the requirement to maintain contractor records is only limited to 3 years. Additionally, given that the statute of limitations on construction projects is 4 years and the statute of repose is 10 years, it makes more policy sense to have the document management requirements mirror the limitations period. This is especially true since most of the documents created in modern day projects are of an electronic or digital nature. Moreover, the days of old musky storage units and overly hot warehouses of boxes are slowing dwindling.
The last requirement to maintain all other business and financial records in the “regular course of business” has not received any judicial interpretation. However, the plain language of the requirement would indicate this refers to all project documents. Contractors are in the “business” of construction and project documents would be a business record created in the regular course. Furthermore, if a contractor prematurely disposes of business records, it may subject him or her to adverse jury instructions and discipline on the construction license. Proper document retention policies are important, not only to protect against a claim of improper destruction but also to meet the requirements of the construction licensing statutes.
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