Monday, March 10, 2008

Column: Check contractor before entering building contract

Column: Check contractor before entering building contract



Edward Paucek
Publication Date: 03/09/08

It saddened me greatly to read "Revoke Florida's Mechanics Lien Law" in the Letters to the Editor on Feb. 20. It was about the financial nightmare of a neighbor of the writer and the unwarranted burden and stress caused by a contractor who did not finish the project or pay his subcontractors. Liens were filed against the homeowner's property. The owner had to pay them plus legal fees and had to complete the improvements already paid for to the contractor thus incurring additional costs, interest and delaying the project.

I'm not sure the writer's suggestion of bonding all construction would be the answer. That would put another layer of cost for insurance bonding which ultimately is borne by the owner.

The banking and insurance industries have substantial clout in the Legislature and have massaged our laws with various degrees of success, not necessarily in the consumer's best interest.

However, before the advent of the current lien laws the situation was 10 times worse.

When a contractor pays his or her state licensing fees they contribute to a state recovery fund. A property owner can petition the Department of Professional Regulation (DBPR) to file a complaint.

If a contractor is found negligent, recovery to the injured property owner will be awarded. Unfortunately the maximum amount is capped at $25,000. This amount should be increased. We have asked the DPBR to work on an increase.

I wish that we had a better system to ensure that unscrupulous contractors could be eliminated from our ranks as they hurt our livelihood and give our industry a black eye.

We at the St. Johns Builders Council face these issues every day and try hard to stand a cut above the fray. Our contractors and subcontractors (associates members) hold ourselves accountable to the public and encourage anyone who is building to contact us for references. We are your local folks.

Any substantive improvement to or new construction on all property requires a building permit.

A "Notice of Commencement" signed by the property owner notarized and recorded in the public records must be completed prior to the first inspection.

This ensures all parties that they know who the owner is and if they do any improvement to the property they have 45 days from the date they commence work to send a "Notice to Owner" to the property owner.

If they do not, the owner is not held responsible for the debt. If they do, the owner has a responsibility to obtain a release from the subcontractor.

If your contractor does not give the owner this document, it's a big red flag. Don't pay. Get the facts and make sure the subcontractor or supplier is paid.

Financial responsibility begins at home. We must work with what we have. The old adage of "Trust but Verify" still makes the most sense.

Improving your home or building anew is a serious business. If you have financing, request your lender become more involved in this process. You may incur an additional management cost but its well worth it. Your lender then has more financial culpability.

If you are paying cash to make your improvements, use a title company to disburse your money to the contractor, subcontractors or suppliers.

All reputable contractors will welcome being paid by this third party. If they object, you don't want them.

There are many other ways we can help you safely build or improve your home. We urge everyone to contact our offices or the St. Johns County Building Department for help.

Building your home or adding to it is a serious undertaking but with a little homework it should be a wholesome and rewarding experience.

Edward Paucek is chairman of the St. Johns Builders Council.


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