How the two contract types share risk on a remodel or addition, and the Florida rules that apply to both. Updated October 2026.
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Choose a fixed-price contract once the scope is defined: drawings, finishes and allowances written down, so the contractor carries the risk of its own estimate and you know the number. Choose cost-plus, actual cost plus an agreed fee, only when the scope genuinely can't be defined yet, such as an older house with unknown conditions, and insist on a budget estimate and open books. Under either one, Florida's deposit, contract-notice and Notice of Commencement rules apply.
| Fixed price | Cost-plus (cost + fee) | |
|---|---|---|
| Price | One agreed price for the defined scope | Actual costs of labor and materials plus a fixed fee or percentage |
| Who carries estimating risk | The contractor | You |
| Budget certainty | High, if the scope is complete | Low until the work is done; a budget estimate helps |
| Transparency | You see the price, not the contractor's costs | You see invoices and receipts |
| Changes | Priced as written change orders | Added at cost plus the fee |
| Suits | Additions, ADUs, kitchens and bathrooms with complete drawings and selections | Work with unknown conditions or a scope that will be decided as it goes |
A fixed price works when the scope is written down completely: the drawings, the specifications, the fixtures and finishes or clear allowances for them, and what happens to things found behind walls. The contractor prices that scope and carries the risk if its estimate was low. You get a number to plan around and a written change-order process for anything you add.
Most residential projects can be scoped this way after a site visit: a room addition, a kitchen or bathroom remodel, a screen enclosure. Read the allowances closely. A low fixed price with small allowances for cabinets, tile or fixtures can end up costing more than a higher price with realistic ones.
Cost-plus fits when nobody can price the job honestly up front: an older house where the structure, wiring or plumbing behind the walls is unknown, insurance-related repairs whose extent appears as demolition proceeds, or a project you want to shape as it goes. You pay the actual costs plus the contractor's fee, and you see the invoices.
The risk is yours, so protect it. Ask for a budget estimate and a not-to-exceed figure where possible, agree how the fee is calculated and what counts as cost, require regular cost reports with receipts, and keep the right to approve any change before the work is done.
Whichever contract you choose, ask for an estimate that itemises the scope, shows permit and inspection fees separately, lists the allowances and the assumptions, and comes with a written schedule that includes the permit review for your address. Our written estimates follow a site visit and are itemised, with permit and inspection fees shown separately; an estimate like that is the easiest way to compare contractors on the same scope. Our planning ranges by service are on each service page, for example room additions and kitchens.
An allowance is a placeholder amount in a contract for something not yet chosen, such as cabinets, tile, plumbing fixtures, lighting or appliances. If your selection costs more than the allowance, the difference is added; if it costs less, the difference is credited. Allowances let a contract be signed before every selection is made.
They are also where fixed prices quietly change. Compare allowances line by line between estimates: a contractor with low allowances can look cheaper and end up costing more. Ask what each allowance assumes, for example a stock cabinet line or a specific tile price per square foot, and make the selections early enough that the numbers are real.
Sources (primary sources, checked 2026-10-16): F.S. 489.126 · F.S. 489.1425 · F.S. 713.015 · F.S. 713.135 · F.S. 489.119 · DBPR. This page explains rules in general terms; it is not legal advice, and the building department for your address has the final word.
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