Should Florida's CFO step in to help Ian-battered homeowners escape contractor liens?

A Fort Myers couple whose townhome was significantly damaged by Hurricane Ian faced a lien on their home by the very company that their homeowner's association called for help, all because their insurance carrier took nearly ten months to pay a claim.

Insurance company Heritage Property & Casualty ignored the $2 million emergency claim on townhome community Parkwoods VI for months, and Panama City-based repair company SouthernCAT grew impatient. Communications between the homeowner's association and its members show the repair company placed a lien on all the townhomes in February of 2023 at roughly $30,000 apiece.

This stressed homeowners Sara Alvarez and Justin Jackson for months, as they wondered how they would pay it off and how it would affect the future sale of their property.

While Alvarez and Jackson's problem was solved by calling the press, many residents recovering from Hurricane Ian have found themselves facing legal threats to their property as their insurers deny, lowball or slow-walk their claims.

As a result, some contractors, roofers and repair companies have begun filing liens on the very homes they repaired just to get paid. This leaves homeowners in an unenviable position –– one where they could see their home foreclosed on if the insurer they paid faithfully doesn't come through.

Data shows Hurricane Ian survivors are disproportionately affected by these liens, which experts say is thanks to a combination of high levels of repair and rebuilding in counties hit hard by the Category 4 storm. Experts in the legal, political and construction industries say the state is the only one who can step in –– and that it isn't doing enough to help its customers battle the insurance industry.

Florida's Chief Financial Officer Jimmy Patronis is the state's best chance to make this right, said former Florida CFO Alex Sink.

"He's supposed to be advocating on behalf of property owners and insured people in this state," said Sink. "It seems right now there's not a lot of accountability."

‘What do you do if your roof is leaking?’

Sink said the preponderance of liens by contractors likely led back to insurance claims not being paid on a timely basis. That can go badly for a claimant if they front the initial payment for repairs, only to find months later that their insurer is denying or lowballing the claim, she said.

But homeowners often have no other option than to begin the work before the claim is processed, she said. Claims can take months to be paid out, but damage to their home must be dealt with in the immediate.

"What do you do if your roof is leaking?" asked Sink. "You can't sit around and wait for an insurance company, so you fork out your own money or get a contractor to come along and fix it and you're left a lien on your home."

A lien on a property indicates the homeowners owes the lien grantee money, and must be paid off before the property can be sold or refinanced. Ultimately, if a homeowner does not make good on a lien, their property can be foreclosed on.

"The homeowner’s paid the premiums and is hoping for the protection of their policy," said Fort Myers-based personal injury lawyer Michael McQuagge, who routinely represents clients against insurance carriers. McQuagge added that the contractors typically just want to get paid.

"As you start to see the buck pass around the triangle, we’re right back at the insurance company not paying," he said. "Everybody gets screwed in the process."

On Sept. 28, 2022, Hurricane Ian chewed through Southwest Florida. It brought with it winds of nearly 150 miles per hour and up to 15 feet of seawater in some parts, killing 156, smashing countless houses to matchsticks and destroying infrastructure.

The National Hurricane Center’s April report on Hurricane Ian concluded it was the costliest hurricane to hit Florida, estimating Ian did $113 billion in total damage in the southeastern states, with $109 billion of that in Florida alone.

The News-Press/Naples Daily News analyzed county lien records in Charlotte, Lee and Collier counties between Jan. 1 and Aug. 22 in 2022 and 2023, as well as four counties of similar population size: Pinellas, Santa Rosa, Lake and Marion counties. This particular time frame was selected because insurers typically have 90 days to pay out a policy claim; Jan. 1 sits just outside the 90-day mark post-Ian.

Following examination, a reporter found lien filings have exploded in counties hardest-hit by Hurricane Ian, disproportionately so.

Comparing filings for January to August of 2022 to the same time period in 2023, new liens in Lee County skyrocketed by more than 80% and by 164% in Charlotte County. In Collier, they increased by 33% over the same period, bringing the total from 1,158 to 2,064.

In Pinellas and Santa Rosa counties, which are comparable in population size to Lee and Charlotte, lien filings increased slightly at 2% and 8%, respectively, according to county records. However, both Lake and Marion counties, which have populations similar in size to Collier County, saw increases of roughly 30% in lien filings -- possibly due to new construction, one expert source said.

Homeowner, contractors all in 'the same boat'

Steve Cona is the president and CEO of the Florida Gulf Coast chapter of national construction industry trade association Associated Builders & Contractors. He's worked for the association for over 16 years. In his opinion, the lien increases are the result of "a perfect storm."

The numbers did not surprise Cona.

"You have owners waiting on insurance companies to pay out and you'll see a potential increase in liens," said Cona. Cona noted that Florida is in a period of growth, which can further increase nonpayment claims as supply chain issues escalate the price of materials and labor.

"For contractors, liening a property is the only way to recoup the revenue for the work that they've done," Cona said. "It is their only recourse.

"The contractors put up a lot of their resources, materials and supplies to build these projects. They're on the line to pay for materials and subs."

Just under 5,500 liens were filed in Lee County between January and Aug. 22, with a handful of construction, roofing or repair companies responsible for larger chunks of the aforementioned liens. Some of these companies tallied up hundreds of liens on their customers' homes.

During the same time period last year, just 3,007 liens were filed in Lee County. That number increased by 82% from 2022 to 2023, thanks to Ian. In Charlotte County, lien filings rose 1,190 to 3,144, while Collier saw lien filings grow by a third.

While McQuagge agreed with Cona, saying contractors are "in the same boat as the insured," he noted not all liens filed are good liens, and homeowners can fight them. He advised homeowners facing a potential lien on their property engage an attorney, who could potentially provide more assistance.

Still, McQuagge said, at the end of the day, the state is the primary entity with a procedure to force insurers to pay out on claims.

Which construction companies are filing the most liens in Lee County?

Round numbers were easily obtained from Charlotte and Collier counties, but data from Lee was more easily broken down, making it simple to identify which contractors were filing liens within the county.

More than two dozen construction, repair, home loan and restoration companies have filed more than 20 liens since January. They are:

• Access Restoration Services (21)

• All Repair And Restoration LLC (30)

• Allstate Construction Roofing Inc (150)

• Apex SWFL (48)

• Citrus Contracting (29)

• Coast 2 Coast Restoration LLC (34)

• Consolidated Electrical Distributors Inc (20)

• Consumer Contracting Services LLC (28)

• Douglass Restoration Inc (33)

• Elo Roofing Inc (39)

• Epic Roofing & Exteriors LLC (28)

• Florida Green Finance Authority / Renew Financial Group LLC (82)

• Florida PACE Funding Agency (200)

• Florida Roof Specialists Inc (64)

• Fred Griffing Builder LLC (22)

• Home Damage Doctor LLC (74)

• Honc Industries Inc, including Honc Marine Contracting (62)

• Ianuzzi Construction Co. Inc (22)

• JES Inc (29)

• Joe Taylor Restoration (50)

• Kalina Christopher J / Watermark Redevelopment LLC (20)

• One Stop Restoration of FL LLC (14)

• Performance Roofing (22)

• Rapid Response Team LLC (27)

• Rapid Restoration Recovery Inc (22)

• Raymond Building Supply LLC (22)

• Restoration X LLC (36)

• Reynolds Ventures Inc / Wrightway Emergency Services (26)

• Smyrna Ready Mix Concrete LLC (24)

• SouthernCAT Inc (29)

• SRS Distribution Inc. / Suncoast Roofers Supply (168)

• Thomco of Florida LLC (25)

• Total Home Roofing (50)

• Zeus Restoration LLC / Reynolds Ventures Inc (22)

This article originally appeared on Fort Myers News-Press: Low Ian claims payments have pushed contractors to file liens against SWFL homeowners