Protecting Yourself Against Pool Builder Fraud

Pool builder fraud and bankruptcy is a growing problem in Florida communities. Recently, in Port St. Lucie, the owners of one pool construction company were criminally charged for scamming almost 150 customers out of at least $2 million. Unfortunately, additional companies are being exposed for this type of activity and there will be more.

This type of scam, in which the pool builder takes an upfront deposit without planning to complete construction, can swindle homeowners out of thousands of dollars. In some cases, homeowners have liens placed on their homes by unpaid subcontractors in the aftermath of pool builder fraud. There are also cases of pool contractors that have found themselves behind the 8-ball due to rising prices of materials and labor. They are unable to satisfy the requirements of the contract – and the same consequences to the homeowner can apply and without much recourse.

If you hired a pool construction company that has since gone bankrupt, there are steps that you can take to resolve the situation.

What To Do If Your Pool Construction Company Goes Under

If your pool contractor doesn’t complete work on your home pool, you’ll need to file a complaint with the city building department. If the contractor was licensed with the state, you’ll also need to file a complaint with the Florida Department of Business and Professional Regulation (DBPR). Additionally, you’ll need to report the case to local law enforcement so that officers can further investigate the case.

If the pool builder is filing for bankruptcy, ensure that you’re listed as a creditor on the bankruptcy petition. If your name is on the petition, the court will inform you of case developments.

Homeowners may be faced with liens on their property. In these cases, you may have to pay for the same work twice to have the liens lifted by the subcontractor. To avoid this in the future, request a Release of Lien document from the construction company upon payment.

For future work on the unfinished pool, acquire any permits and drawings from the previous builder. Unfortunately, there’s a chance that the company didn’t obtain permits or finalize designs. Additionally, you’ll likely have to start over with a new pool company to finish construction. Though it may go without saying, select your next pool builder with caution!

How To Protect Yourself Against Pool Contractor Scams

As a homeowner, we recommend protecting yourself against pool builder fraud in any way that you can. Here are our top tips:

• Do your research.

Before paying a dime to a pool construction company, thoroughly verify the builder’s reputability. First, check the company’s references, online reviews, and building and permitting history. Then, take the time to visit the builder’s office and speak with multiple company representatives and others about the pool construction process.

We recommend talking not only to the sales representative, but also representatives from the construction and accounting departments. Speaking with several team members will give you insight into how the company operates and whether or not it’s an established, well-run organization.

Asking your local building departments also provides valuable insight. Permits and many other documents are often public information and can be reviewed. Have permits been issued? What is the status of the permits and construction progress? Has the company successfully completed other pools? If a pool contractor has several projects in various phases, that is a good sign. If a pool contractor has all of its projects in the same stage, that may be a red flag.

• Ask to view a portfolio.

Established pool builders will be able to show you an expansive portfolio upon request. Ask questions about the portfolio images, ensuring that the builder can answer any query about past projects. Do some additional research to make sure the images showed to you are actually the builder’s work – sometimes, unscrupulous builders will ‘borrow’ the photographs of other pool builders and pass the work off as their own.

• Payment should align with progress.

If payments to a pool builder aren’t aligning with the amount of work that’s being done, it’s a red flag. Keep a close eye on the progress of your home pool, ensuring that the progress aligns with payment milestones. A 10% commencement deposit prior to starting any work is common – so is setting up milestones and escrow accounts. For example, if the builder proposes a commencement deposit and then the first milestone of ‘gunite shell’ then the 2nd payment should not be released to the contractor until the gunite shell is complete.

• Proof of Progress.

Asking for proof of progress and completion can also add protection and further vet the professional status of the pool builder. As work is complete, do a review – or even consider hiring an independent party to evaluate the work – to be sure the work is actually done. This can can also include confirming payments to subcontractors and materials suppliers have been made for the work completed.

• Be wary of unbelievable deals.

Don’t hesitate to speak to several local pool builders to determine the general price range for your home pool project. If a pool company offers you a deal that’s dramatically lower than other options in the area, there’s often a reason for the gap. As a rule of thumb, if a deal seems too good to be true, it probably is.

A home pool is a large investment. Take your time in finding a pool builder that you wholeheartedly trust to protect yourself against fraud.