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Housing Slump Dries Up Fund For Florida Contractors' Victims

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By STEVE ANDREWS | News Channel 8

Published: October 9, 2008

CLEARWATER - Susan Stephens hired TransFlorida Corp. to build a sunroom on her Clearwater home.

Now she finds herself without the sunroom or the safety net the state is supposed to provide when construction projects such as this go south.

"All the protections that were there didn't do us any good," Stephens said.

The safety net, known as the Florida Homeowners Construction Recovery Fund, disappeared with the decline in its funding source - building permits.

"In an abundance of caution, the department wanted to make sure that we didn't process claims when money may not be available to pay out those claims," said Jenn Meale, spokeswoman with the state Department of Business and Professional Regulation.

Lawmakers created the fund in 1993. The money comes primarily from a surcharge on building permits. It is used to reimburse victims who suffer financial damages at the hands of licensed contractors.

The state doled out more than $3 million in the past year through the Construction Recovery Fund, Meale said. That payout paired with the dwindling number of building permits left a little more than $4,000 in the pot, so the program was suspended.

The action leaves on hold 453 customers who filed claims with the fund.

"Our understanding, and even from the packet that we got from TransFlorida, is that that was there in case they didn't follow through on their promise," Stephens said.

TransFlorida didn't come close to following through.

Stephens paid the Rockledge company $6,700 in July 2006. The money was a 50 percent down payment for a glass-enclosed sunroom.

After a long series of delays, Stephens says, TransFlorida stopped returning her telephone calls.

"We've gotten nothing," she said.

Others had the same experience.

The Department of Business and Professional Regulation received more than 100 complaints against TransFlorida from across Florida. The company operated under the general contractor's license of its president, Geoffrey Gill.

The state's Construction Industry Licensing Board revoked Gill's license in February, and the company went out of business.

In September, the state began notifying people, including TransFlorida customers, that their claims for money from the Construction Recovery Fund are on hold.

A letter from the Construction Licensing Board said, "The slowdown in the economy caused the money generated by the surcharge to drop by more than 4 million dollars."

The Department of Business and Professional Regulation is holding discussions with Gov. Charlie Crist to come up with solutions, Meale said.

"We've lost faith not only in TransFlorida but in that recovery system," Stephens said. "I can't see, with what's going on now in this state, any money ever being stockpiled enough to give it back to us."

Reporter Steve Andrews can be reached at (813) 221-5779 or sandrews@wfla.com.

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