By Trent Cotney, Adams and Reese, LLP.
One of the most important things for any contractor or supplier to remember during hurricane repairs is the Florida-specific, price gouging laws. Florida Statute 501.610, commonly referred to as the Price Gouging Statute, states that during a declared state of emergency the rental or sale of essential commodities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency is unlawful. The statute defines a “commodity” as “any goods, services, materials, merchandise, supplies, equipment, resources, or other article of commerce, and includes, without limitation, food, water, ice, chemicals, petroleum products, and lumber necessary for consumption or use as a direct result of the emergency” Inflated prices on the rental or sale of the commodities is unlawful unless the increase in the amount charged is attributable to additional costs incurred in connection with the sale of the commodity.
With regard to the construction industry, the Price Gouging Statute would apply to a roof that was damaged as a result of a hurricane during a declared state of emergency. Decking, underlayment, shingles, and other materials used when repairing the roof would be subject to the Price Gouging Statute, and it would be unlawful to increase the price of the materials by an amount that grossly exceeds the average price of the commodity during the 30 days prior to the declared state of emergency. The same would hold true for truss repair, drywall replacement and interior restoration. In its definition of commodities, the statute specifically mentions lumber and encompasses other materials used as a direct result of the emergency.
The definition also refers to services and resources, which would likely entail a restriction on grossly increasing prices for the labor portion of the roof repair. In a civil suit filed by the attorney general as a result of statewide investigations into price gouging, Sun State Trees & Property Maintenance, Inc., the complainant stated that the removal of a tree that damaged one man’s roof was subject to the Price Gouging Statute. After the man complained of the cost of removal, Sun State offered to complete the job for a third of their original offer. This is an example of a service relating to the repair of a roof subjected to the Price Gouging Statute.
Despite these restrictions on increasing prices, the Price Gouging Statute seems to understand that increased prices can affect more than just consumers. Contractors can use things like increased mobilization costs to justify increased prices during a state of emergency. Therefore, so long as contractors are able to show that increased prices reflected the increase in costs, they can avoid hefty civil and criminal penalties.
Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.
Trent Cotney is a partner and Construction Team Leader at the law firm of Adams and Reese, LLP as well as General Counsel for NRCA. For more information, contact the author at 813-579-3278 or go to firstname.lastname@example.org.
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