ARTICLE COURTESY OF THE St. Petersburg Times

By DAN DEWITT
Posted June 4, 2006

BROOKSVILLE - Jeff Price, who hired Central Harbor Homes Corp. to build a new house two years ago, tells a familiar story of unfinished work and escalating costs.

His house west of Brooksville was saddled with liens from unpaid contractors, he said, and ultimately cost him about $60,000 more than he had planned to pay.

Central Harbor of New Port Richey and two other troubled builders, Coral Bay Construction Co. and Designer Homes Inc., both of Spring Hill, have together left more than 200 Hernando County customers in similar circumstances.

The companies have fallen far behind schedule or failed to start work after accepting payments from customers. They have left contractors and suppliers unpaid. They have left home buyers to pay off liens or, as projects dragged on, stuck with additional interest and rental payments.

Yet the county Development Department has neither fined the companies nor stripped their rights to pull permits in Hernando. And two weeks ago, it indefinitely put off plans to fine Designer Homes for failing to pay off liens and repair flawed construction, said Development director Grant Tolbert.

"The department's primary goal ... is to attain compliance through working with the contractors and owners to find a resolution in the best interest of all parties," Tolbert wrote in response to a Times question about this decision.

"Any fines assessed through the citation process are secondary to this goal."

But Price and other buyers say this approach means builders don't have to worry about being punished for fleecing customers. And because the state has been similarly slow to discipline contractors, few public records are available to warn potential buyers away from these builders.

"If they had shut them down a year ago, you wouldn't have half as many complaints," Price said.

Of the Development Department's four investigators, he said, "What's the point of having them if they don't do anything?"

Tolbert said the investigators have spent thousands of hours fielding complaints and working with builders to resolve them.

"We try to respond to citizens' complaints. That's what we do," Tolbert said.

This approach has been successful, he said, or at least more successful than disciplinary actions that might force companies to go into bankruptcy - and to abandon their existing jobs.

Designer, which has 20 active permits for single-family homes in the county, has finished four of them since the beginning of the year. Central Harbor, which has received or applied for permits for 32 unfinished houses, has completed 10 of them since Jan. 1, said Tolbert, who added that both companies are nearing completion on several other homes.

Officials from Designer and Coral Bay have said they don't deserve to be punished because they didn't intentionally bilk anyone. They said they took on more work than they could handle, especially with rising costs of labor and supplies. Officials from Central Harbor could not be reached for comment.

Even if Tolbert wanted to discipline builders, he said, state law limits his right to do so. Until recently, contractors were commonly required to hold both state and local licenses. The Florida Homebuilders Association objected to this system, which it called "two-tiered licensing," Tolbert said.

Throughout the 1990s, "there was a constant assault on local governments by the state building association," Tolbert said.

As a result, he said, state law now requires residential contractors to hold only state licenses, which only the state Department of Business and Professional Regulation can revoke or suspend.

For the county Development Department to strip a contractors' right to pull permits in the county, Tolbert said, it must prove its case to the county Board of Construction and Regulation, which is made up mostly of other contractors.

Tolbert's office can initiate civil action to levy fines against builders, as it planned to do with Designer. But it cannot subpoena records that are often necessary to prove builders intentionally defrauded buyers.

The Sheriff's Office, which does have this power, is investigating criminal complaints against Central Harbor and Coral Bay, said spokeswoman Deputy Donna Black. The agency recently dropped several cases against Designer, after conferring with the State Attorney's Office, because investigators were unable to prove the company had intentionally defrauded customers.

Jerry Wilson, the chief of the regulation department's complaint bureau, said local governments still have substantial power.

He also disputed one of Tolbert's contentions - that the state can overrule the county's decision to fine a contractor or revoke permitting facilities.

But he acknowledged that most of the regulation is left to his agency, which has caught almost as much criticism as the Development Department for its failure to take action against the contractors in Hernando.

Robert Alberti, a Coral Bay customer from Spring Hill, said he filed a complaint with the state several weeks ago. He has seen no results from this action and noted that the license of Coral Bay president Steve Bartlett shows no indication of his recent troubles.

"It seems like all you're doing is filling out paperwork, and that's it," Alberti said. "It doesn't seem that anybody does anything."

Other customers said they doubted the agency has enough resources to adequately investigate the complaints.

Wilson said it does. Eight investigators work out of the Tampa office, which covers seven counties, including Hillsborough and Pinellas; they are responsible for regulating nearly every licensed professional in the state, from barbers to real estate brokers. But they focus most of their time on the building industry, which generates about 80 percent of the office's complaints, Wilson said.

Department spokeswoman Meg Shannon said the state must find probable cause for complaints - and have this confirmed by a state board that regulates builders - before it can post them on its Web site. It has recently done so for one complaint filed against Steve Penna, who holds the contractors license for Central Harbor.

This complaint, for financial mismanagement and abandoning a project, was filed in July of last year. The Department of Business and Professional Regulation posted it on the Web site last month.

"So we're moving through the process," Shannon said. "We have to take care to investigate property. If it's not done properly, and we can't take action, that doesn't help anybody."

Tolbert has an idea that might remedy the recurring Florida problem of builders leaving buyers with unfinished homes or extra bills.

Builders must take out performance bonds, which insure their work, when they do government projects. They should be required to do the same when they build single-family homes, he said.

"It's very, very simple," Tolbert said.

Tim Stoops, president of the Hernando Builders Association, said that would make jobs far more complicated and expensive.

"It would put a lot of people out of business if they made that a requirement," he said.

But he and Tolbert agreed on one point. Buyers should be far more careful when choosing a builder and signing a contract.

Tolbert said builders must provide lien releases from contractors for every phase of construction if the buyers or lending institutions request them. Tolbert said he has been stunned to see how often buyers have neglected to do so.

State law requires builders to begin work within a set time after permits are issued. Tolbert knows of several cases where buyers have waived those requirements in their contracts. And one trend has made the current rash of problems with contractors especially expensive: Buyers seem willing to put up a far larger percentage of the total payment before any work is completed.

"In the mid 1990s, people might lose $7,000 or $10,000," Tolbert said.

"Now we're seeing people out $30,000 to $50,000."

Charley Everly, retired Sarasota County building official, agreed that buyers need to be more careful and advocated hiring a lawyer to review contracts for new houses.

"Building a building of any kind is a huge financial commitment for the average person. ... Amateurs who don't have professionals helping them, they are just sucker bait."