MURDOCK — Beth Piper said she paid $170,000 to Matt Harden and Stephen Dukes of H.D. Custom Homes for a home in South Gulf Cove that the builder never finished.
Piper was one of a handful of customers who said she was ripped off by Englewood builders, both of whom were recently arrested. Dukes and Harden each face 13 charges that include multiple counts of misapplication of construction funds and one count each of fraud.
Piper was one of several former HD Homes customers who attended a workshop Thursday designed to fight contractor fraud.
After the three-hour workshop, held at the Charlotte County Administration Center in Murdock, about 50 representatives from statewide agencies participated in the first-ever meeting of the Contractor/Construction Fraud Task Force. Amira Fox, State Attorney for the 20th Circuit, created the task force.
Piper asked Fox why the public couldn’t attend or at least one of the “victims” of contractor fraud wasn’t invited on the task force meeting? Piper said customers have insights on the frustrating process and lack of enforcement mechanisms when using a licensed contractor to build a home.
Fox explained some ongoing criminal cases would be discussed during the first closed task force meeting. She said future meetings may offer public participation, or a portion could be to the public. She said any suggestions at the morning workshop could be brought to taskforce for consideration.
Another HD Custom customer asked why the banks weren’t mentioned during the contractor fraud workshop, adding some banks pay subcontractors and the contractor without verifying completed work.
Charlotte County Commissioner Chairman Bill Truex, who owns Truex Preferred Construction, led the morning panel. Truex, who is also a building contractor, said he had to take an oath Wednesday to the bank that he completed the work on a recently built home.
A few customers complained that the county, the sheriff’s office and some state agencies gave them the run-around when they first filed complaints about their builder taking money and not completing their homes. They said the standard answer is it’s considered a “civil matter.” Some said they didn’t know where to turn to next. Only later were criminal charges filed.
Charlotte County Sheriff Bill Prummell told the group it takes time to verify each document including subpoenas of bank records when trying to build a case against a fraudulent contractor.
Fox, who is in charge of prosecuting the fraud cases, said until this year, providing contractor fraud was extremely challenging. A new law pushed by State Rep. Mike Grant has vastly improved the fight. The new law makes it easier for law enforcement and prosecutors to file charges against contractors who accept payment and don’t quickly start work or obtain permits and communicate with customers.
“It was hard to prove that the contractor committed theft because we couldn’t prove they had the intent to take the money at the time they actually took it from the customer,” Fox said of the law without the addition, added last year.
Some tools she said government can use include identity theft and the Racketeer Influenced and Corrupt Organizations Act, known as RICO, to prove a pattern of organized crime.
Truex said customers should read and understand everything in a home construction contract.
Tips included not using estimates or proposals in the contract. All contracts should be signed by both parties. Customers should get a copy of the contractor’s license and certificate of insurance.
Customers should check the county website for liens against the general contractor and any sub contractors. The website also lists all permits and the status of each one pulled by a contractor.
Truex said it’s important to check if a contractor has the proper amount of insurance to build the home. The homebuyer should also verify if the contractor has worker’s compensation and liability insurance, he said.
Homeowners were told oral contracts are extremely difficult to prosecute. Even change orders should be done in writing and not through emails or verbally. Contracts can include a delay-for-damages clause and what those damages are if there’s a delay.
A new-home contract should include the scope of work, when it’s estimated to be complete. However, a common misconception is the estimated time is not a deadline.
Customers should schedule about three hours for a walk-through for workmanship. The punch list with required fixes should be a part of the contract and include the ability to address issues in the punch list if something isn’t done properly.
Several in the panel reiterated that contracts should be done in writing and verbal contracts are hard to prosecute. Anything not in the agreement is not part of the contract.
It’s suggested hiring an attorney to write or review a new-construction contract including all change orders. While an attorney may cost hundreds of dollars to review the contract, not having that protection could later cost hundreds of thousands.
During public comment, some complained about liens against their newly built homes from contractors who didn’t pay subcontractors. They said the system works against homeowners, who end up paying twice.
Property owners were told to sign up for property fraud alerts through a free Charlotte County program. An email is sent to property owners whenever a document is recorded in Charlotte County Clerk or Comptroller’s offices. If a lien is in dispute, the property owner should immediately contact the county.
Fox promised customers that the task force would work on combating construction fraud. They may also discuss elder abuses, including unscrupulous restoration businesses who prey on customers through fraudulent roofing and bogus insurance claims.