Builder leaves subcontractors unpaid
The company, which has some 90 active building permits in Charlotte County, has apparently been placed in financial limbo after many of its subcontractors -- who claim they haven't been paid for some $1 million in work -- filed liens against the homebuyers.

Builder leaves subcontractors unpaid

Tradesmen say they're owed more than $1 million

Imagine hiring a dozen crews to build at least two dozen homes and then running out of money before you can pay them for their services, and you can imagine the mess that Construction Compliance Inc. faces.

The company, which has some 90 active building permits in Charlotte County, has apparently been placed in financial limbo after many of its subcontractors -- who claim they haven't been paid for some $1 million in work -- filed liens against the homebuyers.

At least one bank involved in financing CCI's home construction projects has ceased releasing cash advances on the work on at least one of the homes.

Meanwhile, work appears to be slowing to a standstill on many of CCI's unfinished homes located in Rotonda Sands.

"I'm literally in the dark," said CCI subcontractor Joel Deriso, the owner of Arcadia's Other Side Sod corporation. "I know that I'm being cheated out of a lot of money. I know that there are a lot of people like me."

Deriso said he wants the problem exposed so more subcontractors don't lose in the months ahead.

Deriso said he's owed some $28,000 for sod he installed for CCI at some two-dozen homes in Rotonda Sands and North Port.

Deriso said he's made 20 phone calls this week, trying to find out what Charlotte County or the Florida Department of Business and Professional Regulation can do to protect the unpaid contractors.

He's also been calling other subcontractors to rally them to file complaints.

"We are fighting battles separately, but we are losing the war," he said.

Homebuyers, however, may wind being the ones to pay the price.

Under Florida law, subcontractors can file liens against the properties where they performed work for a general contractor.

The liens give the subcontractors the right to force the property into foreclosure after one year if they don't receive payment.

The law requires subcontractors to first file notices to property owners warning them they could place liens on their properties if their general contractors don't pay them. That notice must be filed within 45 days after the subcontractor commence the work.

If the notice isn't filed within the deadline, the lien may be invalid.

Deriso said he first became savvy to the need to file liens after the Jade Homes company went out of business last summer.

"Jade Homes owes me $30,000," he said. "Buddy, I was gun shy."

Last summer, CCI began "stretching out" its payments on his invoices so that he was getting paid for jobs performed 60 days earlier, he said. After a while, his CCI account hit nearly $100,000 in arrears, he said.

Deriso said he complained to the company, which subsequently paid down the debt to $28,000.

In November, Deriso received a notice from an attorney for Coast Bank of Bradenton. The notice stated that the bank had decided to cease disbursing funds from a construction loan for work on one of CCI's house projects.

The attorney's notice provided no explanation, and neither has CCI, he said.

CCI president Jessie Battles, did not return phone calls to his office in St. Petersburg for comment this week. An attempt to contact Cary Cash, an attorney for a St. Petersburg firm representing Coast Bank, also was unsuccessful.

At least one of the unpaid subcontractors remains hopeful that CCI will straighten out its financial problems, complete the houses and pay the subcontractors.

"One side of me wants to expose them, but at the same time, that wouldn't reflect well on the industry as a whole," said Michael Jemison, manager of Tarpon Construction. He said his company is owed some $170,000, much of it for foundation work on CCI's house projects.

He added that the bank is holding funds that were earmarked to pay for Tarpon's work.

"So, we have a little bit of confidence there is the money to finish the homes," he said. "There's still hope."

The amounts claimed in the liens add up to substantial funds.

Jodfer Land Service, which provided land clearing and fill dirt for some 64 houses, has filed liens totaling more than $300,000.

Kimal Lumber supplied $182,000 worth of building materials at 29 homes.

Beckman Concrete and Masonry filed some two-dozen liens totaling some $220,000.

Residential Drywall also filed a dozen liens totaling some $98,000.

And Miller Brothers Contracting, a septic system installer, filed a dozen liens totaling more than $90,000.

"It's a sad situation," said Gary Reger, manager of Seacoast Supply, which has liens against properties in CCI deals. "We're kind of setting there holding the bag, too."

Bob McEnroe, owner of Gulfcoast Construction Supply, a stucco supplier, said he has filed 25 liens against 25 houses for services rendered that went unpaid.

"It's quite a lot of money," he said, declining to elaborate.

Deriso said he has become frustrated by the responses of government agencies to the problem.

A Charlotte County license investigator told him subcontractors should file lawsuits in order to obtain court judgments against the contractor before lodging complaints.

Erin Mullen-Travis, manager of licensing for the county's building construction services, said the county has no complaints filed against CCI to date.

"Nobody in my office has really heard of CCI," she said.

The county can use the liens as evidence in prosecuting contractors on license violations, she said. But the county must be able to prove the contractors received the money from their loans or customers to pay for the subcontractor's work.

Gathering such proof can be onerous, she said.

Those who may have filed their liens too late still have a chance to recover their losses, she added. But those subcontractors should first file lawsuits and obtain judgments against CCI.

That would allow the county to order CCI to pay off the judgment within 30 days or face a hearing before the county's building board.

The board could take away the company's county permitting privileges, Mullen-Travis said. However, because CCI operates under a state license, the company could move to another county, she said.

"That wouldn't get these guys paid," she said.

So, the unpaid subcontractors should also file complaints with the state Department of Business and Professional Regulation, which can demand restitution, she said.

"Nobody is truly out of luck," she said.

By GREG MARTIN  Staff Writer
http://www.sun-herald.com/Newsstory.cfm?pubdate=011407&story=tp6np14&folder=NewsArchive2