Thursday, December 03, 2015

Report: State Contractors' Ripoff Reimbursement Fund Leaving Some Fleeced Homeowners Feeling Victimized Again

In Orlando, Florida, WPTV-TV Channel 9 reports:
  • A state recovery fund to help victims of bad contractors has left many homeowners feeling like victims all over again.

    Action 9 found dozens of claims from three years ago have never been paid, and the owners said they proved that they qualify for recovery money.

    Cynthia Brady discovered her new home's defective slab was sinking. The family sued the contractor and won a $50,000 settlement, but the contractor never paid.

    Brady sent a claim to Florida's Construction Recovery Fund,(1) which is supposed to cover some homeowner losses to bad contractors. Three years later, her claim is still pending.

    "I did not expect to be treated this way," said Brady. She said the Department of Business and Professional Regulation kept asking for documents it already had. "It was just one final insult after a series of hurts and insults," said Brady.

    Don Whittemore filed a $17,000 claim after his contractor walked off the job. He said there has not been an answer from the state since 2012. "It doesn't work. We don't know where the money's going, but we didn't see any of it," said Whittemore.

    Action 9 reviewed state records and found many bad-contractor victims have been fighting for recovery fund money for years. Ninety-four homeowners who filed claims in 2012 are still waiting, which is more than the 83 homeowners the state has paid.

    Attorney Paul SanGiovanni said he is not surprised by the delays and angry homeowners involving a state-run program.

    "The amount of funding to pay those claims is so small, the funding to pay the people to process these claims is so small, these people actually end up being victimized a second time," said SanGiovanni.

    Recovery fund money comes from a fraction of each permit fee, and the state says it has $5 million to pay out this year. Also, it says another dozen claims will be processed next month.

    "Did it protect you?" asked Action 9's Todd Ulrich.

    "No. It made it worse," replied Whittemore.

    Florida's Recovery Fund already cut back on what homeowners could recover. It reduced the top payout from $50,000 to $25,000. Five years ago, it dropped victims of bad roofers and pool contractors from the program.

    In a response, the department wrote: "Regarding the pending claims, it’s important to keep in mind that the timeframe for processing recovery fund claims depends on the circumstances of the claim and the amount of time it takes to receive all necessary documents from the claimant to complete the recovery fund claim file. There may be instances in which the claimant has not responded to requests for additional documentation, in which case the claim remains in the pending status. There is no longer a backlog of completed claims awaiting payment; the FAQs are in the process of being updated. At this time, once a claim file is completed, Recovery Fund staff submits the files to the next available Construction Industry Licensing Board meeting for review and possible approval."
Source: Action 9 investigates state recovery fund meant to help homeowners.
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(1) For more on The Florida Homeowners’ Construction Recovery Fund, see Frequently Asked Questions.

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