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COVER STORY: Home Building
Left in the Lurch
Florida has one of the highest foreclosure rates in the nation. But the downturn in the residential housing market has left plenty of other problems in its wake, including increasing numbers of construction defects.
In another Great Bay case, Lenore Mascar says a primary reason she and her husband, Ray, decided to move to Port St. Lucie from Boca Raton was “to stay within our budget and retire comfortably without getting in over our heads.” They contracted with Great Bay for a modest, $151,000 home. The builder took a total of $70,000 in bank draws out of the Mascars’ construction loan but didn’t use it to pay subcontractors, who had completed about half of the Mascars’ house when Great Bay shut its doors. Dozens of liens poured in as the Mascars struggled to finish the home with the help of a new contractor. Total costs have stretched to more than $250,000.
 WORRIES AND TEARS: Lenore Mascar and her now-deceased husband, Ray, hired Great Bay Homes to build a modest, $151,000 retirement home in Port St. Lucie. Great Bay took $70,000 from the Mascars, didn’t pay its subcontractors, then it shut down. The couple found another contractor to finish the house. Costs have ballooned to $250,000 — and some liens are still outstanding. Mascar has had to return to work. “I haven’t spent one night in the house that I haven’t cried my eyes out with worry.” [Photo: Jeffrey Camp] |
Among the many sources of Mascar’s frustration are her bankers, who released large draws to the contractor without ensuring that he used the money to pay the tradesmen working on the Mascars’ home [see related article "The Banks' Role."].
As is common in large lien law cases, Great Bay consumers asked police and prosecutors to launch a criminal investigation. “As far as I’m concerned, it was a crime to take our money and not use it to build our house,” says Mascar.
Florida law, in fact, carries felony-level punishments for contractors who intentionally misapply construction funds. But proving intent is tricky, and many law enforcement officials consider it a civil matter, not a crime, when a contractor takes a down payment or makes hefty bank draws from a customer’s construction loan, does little to no work and abandons the job. Criminal prosecutors tend to leave abandonment cases in the hands of prosecutors for state agencies like the Department of Business and Professional Regulation. Officials there can do little more than take away a contractor’s license and encourage victims to apply for relief through the state’s Construction Recovery Fund, which can provide limited compensation for homeowners who’ve been harmed financially by a contractor.
